SINGAPORE INTERNATIONAL AIRLINES 1
Singapore InternationalAirlines has been one the most treasured in the world due to itsexcellent services and experience in human resources management. Thecompany has also been a leading carrier in the Asian region with ahuge workforce. However, several changes in the industry thatemanated from the economic downturn that started in 1990, theeruption of Severe Acute Respiratory Syndrome (SARS) the war in Iraq.These reduced the number of people traveling to the Asian region andconsequently affected the profits of the company. The operation ofAir Asia in Malaysia, Australia, and Singapore has brought low-costopportunities for travelers. This has further put the management ofSIA on to the verge of applying critical decisions that have not beendesirable to the eyes of the employees and their unions.
Singapore InternationalAirlines reached its peak in 1990 by being the biggest airline inSingapore and the neighboring regions. It was also among the bestcompany in the world and passengers traveling to the Asian regionpreferred it to others for its excellent customer services and anextensive network. By the year 2003, the company had 90 aircraftsthat transported passengers to 97 destinations in 40 countries acrossthe world. The number of people visiting the Asian region reducedsignificantly due to the insecurity associated with the fightinggoing n in Iraq as well as the intensified SARS infections Singapore,China, Indonesia, and India.
The management employedseveral measures to differentiate its services from those of othercompanies. First, the companies introduced catering to its servicesand through its subsidiary companies. The Singapore Airlines TerminalServices, a subsidiary of the company operated the largest kitchen inthe world, and it had the capacity to serve and average of 45,000meals in a day. The company also invested in aircraft management andrendering their subsidiaries autonomous such that they operated asindependent ventures and they helped in maintaining high profits evenwith the continued unfavorable trend in the industry. The companyalso acquired 49% of UK-based Virgin Atlantic to leverage its routes.However, it turned to be a sour deal since there are estimations thatthe value of the stake has a depreciation of about 60%. Air Asia alsointroduced cheap transport services in the region and this hasdeprived SIA a lot of clients. Therefore, the company laid-off morethan 400 workers and 156 crew members.
If the new manager is toreinstate the business to its former glory, there are severalrecommendations that he could adopt. First, the company can expandits partnerships to viable companies. In doing so, the leader shouldfocus on making the company an active member of the Star Alliancesince only 11 out of 24 of its partners operate in Singapore. Therecent partnership with Turkish Airlines should forge the way forother partnerships. The company should also join its competitors inintroducing premium economy products in its long overhaul aircrafts.The resistance it has been exhibiting in the past should beconsidered unfavorable for the current business environment. Thecompany’s biggest markets in Australia and the United Kingdom arenow infiltrated with competitors who offer a premium product. Themanagement should focus on the corporate and upmarket leisure sectorsand make plans to offer both long and medium Hauls. Without theimplementation of an appropriate strategy, the company can continueto lose its loyal customers gradually to its competitors andconsequently affected its profit margin.