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SIA was officially founded in With very limited resources and no domestic market, from the very beginning, SIA sought to find ways to survive.
Through its unremitting efforts and disciplined approach, SIA has grown exponentially and became an internationally-respected airline. Despite the cutthroat competition and volatile market situation, SIA has consistently recorded positive financial growth in past years.
This indicates SIA need find ways to boost its revenue growth. Passenger traffic followed the same trend. But load factor looks fluctuating, suggesting the demand remains volatile and lags behind supply.
External environment Analysis SIA is operating in a very challenging environment as a result of uncertainty in global economy, volatile oil prices, aggressive gulf airlines, overcapacity, and fluctuating global currency movement. To do that, the PESTLE model which is widely used in business environment analyse can be applied in the following analysis.
Hence we may still expect sometimes government policy plays a big role in the development of the industry and may impact industry profitability and competition landscape. Therefore, when the airline industry is embracing the market liberalization, each player in the industry should be clearly aware of the governmental force or policy makers due to their continuous lasting influence on this industry.
For instance, because of the oil price slump in past two years, airline industry has been facing mounting pressure from government to unwind fuel surcharges. Economic Economic environment affects airline industry to a great extent because airline industry is closely linked to national, regional and international economic development.
A research conducted by the international Air Transport Association or IATA revealed that disposable incomes growth which closely follows GDP growth, is the primary demand driver for the travel by air.
On top of that, IATA forecasts passenger travel demand will continue to grow 6. As for the long term forecast, IATA projected a 3. Social Social environment also has significant impact to airline industry. Because every consumer is a social human being, whose behaviour is influenced by social norms and tacit rules of a certain group.
Studies have suggested different demographic groups tend to have different consumer behaviours. For example, millennial generation behaves quite differently from baby boomers. With millennial generation entering their peak income stage, studying their travel preferences will help airlines pinpoint their specific demand and develop appropriate product and service for them.
So categorizing different generations, studying demographic and sociological attributes are of big significance for airlines. SIA needs proactively study social environment as it may present future opportunities. Technological Technological advancements could be a double-edge sword.
On one hand, technology advancement is a major driver in improving airline efficiency, lowering operation costs, enhancing overall customer experience, personalizing customer service. On the other hand, technology could pose a threat to airlines which could change the way how we live, work and interact with people.
For example, skype web-meeting is becoming prevalent now which could potentially lower the demand for face-to-face meeting, meaning business travel demand could be subdued.
Customers do not have enough power to influence an airline to alter its business operation to suit their personal needs. Boeing and Airbus are probably the most important suppliers for airlines because these two aircraft manufacturers have dominated the commercial aircraft markets for decades.
However, with aircrafts from both companies are quite similar and with both of them seeking to acquire more orders from the global airline companies to cover their large fixed cost and to maintain their market shares, there is no reason to overestimate the bargaining power of these two suppliers.
However, a cool and hard fact is many airlines are still struggling to strive. Overcapacity and price wars are a common occurrence in the industry. There is constant fighting for territory and expansion. Major players in the industry concentrate on lowering their costs and improving service to deter new entrants.
Recent news of Alaska Airlines acquiring Virgin America and Air New Zealand wanting to ditch its Virgin Australia shareholding hints that market turmoil would be the main theme in the global airline industry in the near future. Another noticeable thing is the ostentatious gulf airlines who have been aggressively disrupting the airline industry.
Moreover, Qatar Airways launched its long-awaited flight to Sydney in the same month, which was part of its plan to double its size in Australia in Threat of New Entrants Traditionally airline industry is perceived as highly capital involved which means the entry barrier is very high.
Even now with more and more consortiums in some countries especially in Gulf Region and emerging economies like China and India, and with more and more access to affordable bank loans, financial barrier is lowered.
So overall the threat of new entrants is low. Threat of Substitutes Can you image people opting to driving or taking a high speed train to his or her destination instead of taking an airplane?
It may be likely for people who travel in short distance to do that.
Because airplane is by far the fastest and safest form of transportation available now. Therefore the threat of substitutes remains low. However, we need note, this tool was developed several decades ago when the market structure was not as volatile as today and it is more applicable for simple market structure analysis.I have added a PESTLE analysis of Singapore.
PESTLE is a business tool used to study the macro-environmental factors. PESTLE is a business tool used to study the macro-environmental factors. It is an acronym for political, economic, social, technological, legal and environmental attheheels.com://attheheels.com Published: Mon, 5 Dec This report will give an overview of the brief history and growth of Singapore Airlines Limited (SIA) throughout the years.
It will also cover the fleets, the corporate management of the company, the destinations covered by SIA, the branding and the services of SIA. · Singapore Airlines Limited - Strategy and SWOT Report, is a source of comprehensive company data and information.
The report covers the company’s structure, operation, SWOT analysis, product and service offerings and corporate actions, providing a ˚ view of the attheheels.com://attheheels.com Datamonitor's Singapore Airlines Limited - SWOT Analysis company profile is the essential source for top-level company data and information.
Singapore Airlines Limited - SWOT Analysis examines the company's key business structure and operations, history and products, and provides summary analysis of its key revenue lines and strategy. · Singapore Airlines Limited is engaged in passenger and cargo transportation.
It is the flag carrier of Singapore and operates from its hub at Changi Airport, with a attheheels.com /singapore-airlines-limited. Singapore Airlines Ltd maintained its leading position in air through stellar marketing campaigns, cutting capacity while increasing passenger load and by constantly innovating in offering the latest technology for its new products and services in-flight.