Contemporary issues facing Singapore airlines limited.

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Contemporary issues facing Singapore airlines limited.

Singapore airline (SIA) is an international company that offers flight services. It is owned by the government of Singapore but the public also has a stake in the company through ownership of shares. Its forerunner was the Malayan airways in 1947 which operated commercial flights linking Singapore and Kuala Lumpur (John and Williams, 2012, 189). The name changed to Malaysian Airways and later Malaysian-Singapore airlines. In the year 1972 the mother company, Malaysian-Singapore airline was split forming Malaysia Airlines and Singapore Airlines. The airline offers both freight and passenger services to its customers. Singapore airline operates its main hub at the Changi airport.

The company has sixty two major destinations around the world in not less than thirty five countries. It mainly serves Africa, Asia, North America, Europe, pacific region and Middle East countries. The company has two subsidiaries that are the Silkair and the Singapore airlines cargo. Silkair manages flights to secondary cities which have a lesser capacity. Singapore airline cargo on the other hand manages cargo services offered by the mother company. It operates a fleet of airplanes including the airbus A380 which is currently the biggest passenger aircraft in the world (John and Williams, 2012, 190).

The airline is not only involved in offering flight services but also aircraft handling and engineering services. It is also a major shareholder in the virgin Atlantic, an airline in the United Kingdom. The company is characterized by efficient and excellent services to its customers. This has ensured its continued success in the flight industry. Its efforts have not gone unrewarded. The Singapore airline has won various awards including the Best Global Airline and the Best International Airline awards for several years (Shaw, 2011, 178). Its quality of service has ensured its survival in the flight services business and has earned it a lot of revenue. The company has hired more than thirty thousand workers and earns revenue of not less than three hundred million US dollars per annum.

Despite the continued success, the Singapore airline faces a batch of upcoming issues. These issues have yielded a tough working environment and reduced the capability of this company. However, various measures have been put in place to curb these issues and hence enhance on their performance. These contemporary issues are as discussed below.

One of the major issues of concern is management of this vast company. With its operation in different countries, the airline company has faced various managerial constraints. Speaking in a session, Future of tourism Asia, the executive vice president of the Singapore Airliner, Mak Swee Wah spoke of volatility and turbulence of the current world as one of the problems faced by the airline industry (. Various economic constraints in the world have repeatedly affected the airline’s performance. Despite the growth of the tourism and travel industry in Asia, where the company has majored its operations, the continued hike in fuel prices have increased the running costs (Dempsey and Gessell, 2006, 875). Economic challenges in the world which includes the economic crisis in Europe, the nuclear disaster in Japan, deteriorating economic growth in china and India have had a negative impact to the Singapore airline. Security issues are also a major threat to the airline industry (John and Williams, 2012, 193). The world has experienced a rise in cases of terror activities. This has resulted to added costs to the SIA as it has forced them to employ more sophisticated security methods.

The second contemporary issue is the upcoming legal issues. Various government regulations in Singapore and global rules pertaining to the airline industry have acted as a hindrance to their internal and international operations. Flight restrictions imposed on this airline by some countries which restrict the time and number of flights made has been a major setback. The rules also limit the number of destinations the airline covers. The lesser the number of destinations covered the lesser the profits and opportunities (Saxena, 2011, 674). Internally, the government of Singapore has enacted various laws which are affecting the internal operations of the SIA. Singapore being a geographically small country has to regulate the operations in the aviation industry to eliminate monopoly and maximize on revenues (Shaw, 2011, 247). These regulations have seen the Singapore airline experience a series of flight restrictions which have made the working environment unfriendly. The Australian government in a cabinet meeting of February 2006 failed to grant Singapore the fifth freedom of air which would have allowed them to access freely the Australian airspace (Wensveen, 2011, 343). This decision was meant to protect Australia’s Qantas airline from increased competition.

Infrastructure is another contemporary issue that is affecting the Airline. The company has channeled numerous funds towards acquiring the state of art equipment like airbuses. However, these purchases have confronted them with the issue of capacity in the airports. The modern flight equipment acquired requires modern infrastructural systems to go along with them (Gerant, 2007, 118). Some of the acquired aircrafts are calling for construction of new and modern radar stations and rehabilitation of the existing ones. The jumbo aircrafts require expanded runways and terminals.

The rapidly changing customers’ requirements and rapid competition yielded by existing and upcoming airlines is another contemporary issue affecting the Singapore airline. With the rise in number of airlines in the aviation industry, customers’ expectations of the quality of services provided have raised by a great deal (Gerant, 2007, 58). Competition among the various airlines has seen them better the customer service day in day out. The improvement of the services provided has opened up the mind of consumers of airline services. The competitive rivalry has resulted in both challenges and opportunities to this airline.

To overcome various hurdles on the way, the Singapore airline has embarked on a series of development strategies to ensure it thrives in the aviation industries. The Airline has joined an organization, the Star Alliance which brings together various airlines in the world. Various economies of scale have accrued to the company. The Star Alliance has enabled the Singapore airline to increase its destinations in the world. The government of Singapore has signed deregulation treaties with other countries for example with the US that is the Open Skies Treaty which allows unrestricted flight access for both countries (John and Williams, 2012, 103). Negotiations with the Australian government are also ongoing on the same.

To counter the competition from the other airlines, the Singapore airline has established a personal relationship with the customers through customer relationship management. They have also taken their level of customer service a notch higher by employing the modernized methods of service delivery. All aircrafts have four different classes. These classes are; economy, business, first and suite classes. Creation of these classes was in an effort to satisfy the travelling needs of different customers according to their financial ability (Seth and Wells, 2011, 576). The Singapore airline provides non-stop air services to its customers between Singapore and the USA. This benefits customers who require to travel in urgency or those who have less traveling time to long destinations.

Since its inception, the Singapore airline has undergone a series of developments in a bid to improve on the customer service. The company has over time been acquiring the latest technological and communication equipment in order to stay in line with the trends in the aviation industry. The airline has purchased state of art airplanes that enhance on comfort. On infrastructure, the company is expanding various structures like runways and terminals in their airports. This has played a role in increasing the capacity of the airports. A huge investment on human resources has been made by the company. The Singapore airline runs its training institute which recruits and trains staff at various levels (Shaw, 2011, 285). This ensures that their staff is competent and offers the best service to their customers. The company has strived to expand its destination coverage in all continents. Increment of destinations covered attracts more customers who require to frequently transverse numerous destinations for official or recreational purposes (John and Williams, 2012, 197).

All the measures stipulated above have been taken by this Airliner to counter the upcoming issues and ensuring it is in line with new trends in the aviation industry.

References

Dempsey, S. and Gesell, E. 2006. Airlines management. Auckland : Coast Aires publication Ltd

John, F. and Williams, G. 2012. Air transport in the 21st century. New York: Mac-Graw Hill.

Gerant, F. 2007. Management in the airline industry. London: Roultledge.

Shaw, S. 2011. Airline marketing and management. Farnham: Ashgate publishing ltd.

Seth, B. and Wells, A. 2011. Airport planning and management. New York: Mac-Graw Hill.

Saxena, R. 2010. Marketing management. New York: Mac-Graw Hill.

Wenseveen, G. 2011. Airline marketing and management. Farnham: Ashgate publishing ltd.