Harvard Business Publishing

The 2nd and 3rd last paragraph.

"Singapore" should be replaced by "Singapore Airlines" !

This is not just about low-cost versus premium service. It is about focus and exercising a distinctive competency. AirAsia, one of the lowest cost airlines in the world, is also doing well in this environment. And Southwest continues to lead is North American rivals. See "The Ascendance of AirAsia" case Tom Lawton and I have forthcoming in the Ivey Case collection for more on these low cost carriers and their competitive success

Singapore Airlines reflects its countries culture of being kind and courteous which positioned it well in the long haul market. By supporting the augmented product with improved setting and ancillary services they are picking up on the war weary business traveller and the more well off tourist market. I would also suggest to explore the possiblity of cross selling opportunities with a known demographic in a known enviroment for a pre-defined time period ( ensuring you don't disenfranchise a very sensetive customer profile).

Kingfisher Airlines has embarked on a similar mission in India. It loses significant amounts of money. My childhood-friend Rohit's exposition should include considerations of discounted rates of return on marketing investments. There are also differentials between countries and corporations with respect to the cost of funds that should be kept in mind. I suspect that the SIA management does not indulge in opportunity and replacement costing exercises. I recall the exhortations of Professor Tarun Gupta, who has taught both Rohit and me that the Marketing function should adopt a profitability orientation. There is no professional joy in holding customers at the costs of shareholders.

According to Vicky Karantzavelou's July 30th article "Investors recognise SIA’s inherent strengths, but also the risks going forward. SIA’s shares are down (just) 12% since the start of 2008, compared to the Singapore index's 16% fall and Cathay Pacific and Qantas, whose shares have slumped 24% and 36%, respectively this year."

I have to agree with Scott, Strong Marketing Strategies are always an unfair advantage

Professor Deshpande mentions something all airlines should adopt - measuring performance by metrics. SIA received 34 compliments per complaint for every 10,000 passengers! Not only is that a commendable statistic, but also the fact that SIA measures and acts upon it is inspiring.

Like SIA, airlines around the world tend to focus on First and Business class passengers, but unlike SIA, they forget about those packed like sardines at the back. For example, the latest United Airlines ads focus on their first class service, while the economy class passengers are being told that even free meals will be taken off the menu on international flights.

Even though 10% of the travelers up front may bring in 60% of the revenue, it's those at the back who often help form public opinion, due to the sheer numbers.

Airlines need to come up with a holistic brand strategy in which they do not ignore any particular passenger group drastically while pampering another group. It's time to wake up and smell the coffee. And for starters, just learn from SIA.

In my opinion, SIA is one of the many divisions of Singapore Inc which makes it a regional power which can dictate which routes it will open up for other airlines. Unfair competition. It has nothing to do with extra espresso. Of course business schools will not want to see it that way since there is no proof. There are theories explaining governments and companies. But there is no business theory explaining governments as companies. And why is Emirates doing well?

Granted issues of profitability and performance will always be complex. In the circumstances any explanation will always be welcome. It is in this vein that this argument must be taken. SIA indeed may have other advantages like geography in its favour, but there is no doubt the management have been able to put together excellent leadership and a good product.
All the other competitive advantages can always be imitated, but it appears SIA has something more.
Emirates may certainly benefit from geography, sitting at the crossroads of major travel routings at a time when European airlines are cutting back (between Europe and SE Asia especially Australia); and growing regions like China and India; and also Africa. The result is, from Europe, they can connect to every other continent except America. The reverse is true for some of the continents, besides the benefit of the increased wealth from petrol dollars.

You have to keep in mind that SIA does not play by the same rules as US carriers, or EU carriers for that matter. Where the West has laws governing equal opportunity and unions to protect labor, many Asian carriers, SIA included, have rules restricting their Flight Attendants' height, weight, age, gender, and appearance. That said, the clear benefactor is the customer. Singapore Airlines offers the highest quality product of any network carrier in the world, with only Emirates and a few others closing that gap.

Another significant aspect of Singapore Airlines's success that was not mentioned anywhere in this article is the safety factor. Most Singaporeans hold the belief that SIA, with one of the youngest fleets of any major airline, is the safest airline to fly. It is no coincidence that SIA not only owns its own pilot training facilities, it also trains pilots of other airlines in the region as well. It also owns its own aircraft maintenance company and has the reputation for being one of the best in the region, if not the world. Catering too. They have very successfully managed their brand image on all levels - service, safety, comfort, and luxury.

My mom and many of our relatives, who all live in Singapore, will go out of the way to fly SIA, even though it is significantly more expensive than other airlines. It may be propaganda, but most Singaporeans have been brainwashed to think that anything else is a compromise not only on comfort, but on their life. SIA has very effectively used this most basic reptilian fear factor in their marketing for optimal benefit.

I remember with amusement an occasion when my mom's maid had to return to Indonesia to visit her relatives. For economic reasons, she was put on Garuda, Indonesia's own airline. She was literally in tears out of fear for her own life when she found out she wasn't flying Singapore Airlines.

What price would anyone pay for their own personal safety?

SIA strategy sounds good to me. More importantly, it is producing results that are benefiting the airline. As someone indicated earlier they are able to build brand loyalty which is so vital in today's global economy. Many persons are now in the microwave times and are moving from here to there and everywhere to get the best deals. Despite the strong requirements of thier staff in the end the customer benefits and at the end of the day they are the ones who are most important.

AS I Solitaire member with Singapore Airlines ( more than 2M miles) I can say that one of the factors that contributes to their success is consistency in execution. They have a clear customer satisfaction strategy and it premeates down to all employees, it doens't matter which class of travel you are in.

Please hear this from a former flight attendant. After working in the airline for more than 5 years, the one core behavior trait grilled into an Singapore Airlines employee is discipline. This discipline stays with you throughout your life. A discipline to ensure execution of customer service, timely deliveries etc. This level of discipline is what is required today to consistently dedicate your resources, marketing ideas and human resources to deliver the highest level of experience for the customer. This is something that other airlines have to emulate.

As a Singaporean, who rarely traveled and always looked for cheapest flights, I recently discovered and was sold by SIA. It was not safety, expresso or smiles. It is all about human's most basic need - being treated like as a human being who have unique needs and feelings. Try any of the the other flights or airlines and then SIA - the sense of experience will stare at you.

Per share earning for Singapore Airlines (SIA) has gone down from 170.8 (2006-07) to 166.1 (2007-08)figures in Singapore Dollar. No comercial airlines in world could dare to replicate this as they may loose Shareholder credibility. In case of SIA majority shareholdings is with Temasek Holdings which is a Singapore government initiative which explain why SIA is not worried about the net earnings as there Moto is inline with Singapore Government moto of Tourism promotion in Singapore which is far more profitable then making profit with flying aircrafts.

It is clear that filling the First- and Business Class leads to more revenue then bringing Economy Class passengers on board.

Only 60 % of ticket sales in the front covers the whole flight cost and therefore it is Singapore Airline's main aim to stay competitive and build a strong global brand.

If somebody is looking for the cheapest flights, then it is probably not the right choice to fly with Singapore Airlines. There are many other carriers that can offer less service for a lower price-point.

From my opinion and in fact, Singapore Airline's is the world's leading airline and hope they can keep their market position.

I think SIA exists for a reason and that they are able to pursue for many many years successfully. It is not just the service they excel. They are redefining the aviation business within themselves.

Lets not forget in this economic climate that many companies are shipping their executives in coach. So it pays to provide that little extra service, that makes all the difference on a long haul flight.
Singapore Airlines is obviously a winner.

SIA follows N=1.
The personalized experience is pleasurable and they strive hard to make sure that everyone on the flight gets that experience.

I haven't commuted via any American Airlines lately but I was vastly surprised to notice this evil trend among Emirates, which was one of the most luxurious international airlines a decade and a half ago. The quality, quantity, courtesy and the ambiance with which they served meals, beverages, refreshments or other goodies degraded dramatically. On the top this, I found the cabin crew being somewhat disinclined towards attending passengers' needs promptly especially the ones in the Economy class. There was not even a good lounge facility provided for passengers whose waiting time for the connecting flight was more than 8 hours. But at any rate, most of the airlines are committing a most fundamental error in doing a profitable business during a downturn. Doesn't it take a simple enough analysis to recognize the fact that no matter what airlines you're traveling in, the 900 kmph average velocity and fuel rates are going to be the same more or less? So you just have to concentrate on those parameters which can make the passengers feel a tangible difference viz, pricing and luxury level. It's obvious that with skyrocketing crude prices, airlines tend to increase the airfares. But the question to be asked is, are they also "investing" more in providing luxurious hotel-like service to their passengers? An emphatic No for most of the airlines! And that's exactly where Singapore Airlines seem to be capitalizing on. As Professor Deshpande mentions, it is important not to lose sight of the importance of "marketing" and "differentiation strategies" during economic gloom. Customers always come first, pricing next! I wonder if anyone had invested in consulting McKinsey... they would have come up with all these interesting results to increase profitability like providing some sort of souvenirs/shopping coupons to the tourists and gift vouchers to businessmen or think of some retention strategies for the loyal customers or even seemingly insignificant things like increasing the baggage limit by a kg or two would make some difference.

In Columbus, Ohio, when we have heat as we’ve had plenty of this summer; it is accompanied by a moist humidity with all of the charm of a large wet dog. So, when I turned on my iPod and began my morning run, I didn’t expect that anything inspiring would penetrate the elemental pain and suffering that I was about to inflict upon myself. As the sweat on by bald head began catching small insects and my heart rate hit the 160’s, I found that I could not have been more incorrect.

While there were many aspects of Dr. Deshpande’s ideacast that I found inspiring, I was most taken with the brilliance of his conclusion that Singapore Airlines views marketing as an investment rather than an expense. This paradigm shift has allowed Singapore Airlines to weather tough economic times while still keeping their brand identity and unique product offering in tact.

I was especially drawn to this area of discussion because I think that it has applications for many areas of the business. It certainly has direct implications for me; I am an Organizational Development Executive. I have been a party to several unfortunate workforce reductions where as a knee jerk reaction to tough economic times expenses have been cut without a real strategic focus on the full implications of those cuts. However, in my current organization, where we keep expenses pretty close to the bone as a regular business practice, this has not been the case. During budget reductions this year we have found ways to reduce expenses without reducing our capacity to retain, engage, develop and attract top talent. I believe that we have done this because our top leadership views talent development as an investment rather than an expense.

As many of my friends in the talent development and marketing worlds are currently the first to be dismissed during budget reductions, I would challenge those businesses to look very closely at the assets they sell to keep their margins positive. As Dr. Deshpande has concluded, a long range view of your business might prove that not all expense lines are created equally.

In my opinion, Singapore Airlines's strategy follows the BOS (Blue Ocean Strategy)of value creation-value added for the customer.
Granted the truth that oil prices fluntuate dangerously, creating a new distinctive and positive value for your customers would make you control the competition. At this level, your customers will buy whatever the price: you keep cost stable, and then increase your revenue.
This way you are sure that your competitors woud be at your call.
All said and done, other airlines should begin to think of ways to emulate Singapore airlines and make the passenger feel like a kind irrespective of the cabin class you fly.

be a customer it has to be develop and more professional manner should increase.

SIA is a class by itself and created standard for other operator - it has not benchmarked but broken the bench. SIA has exceeded customers' expectation and innovated the competitive strategy in the difficult days of aviation industries.The appeal is in the feeling and resonsiveness for the stakeholders. The myth of cutting the operative cost for better business has been challenged by SIA.The similar trend can be seen to be operative by Emirates, Jatairways and Kingfisher arilines. But for all others it seems like a reactive strategy and all have doubts about its sustainabilty.SIA is admired and stake holders have counted its reliabilty as service provider.

Singapore airlines is investing in other airlines. so, what will happen in future means competition ?