Case Study: Singapore Airlines - Reacting to Asian Crisis

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Reference no: EM132542028 , Length: word count:2000

Case Study: Singapore Airlines, Reacting to the Asian Crisis

INTRODUCTION
On September 11, 1998, Singapore Airlines (SIA) announced its biggest-ever product launch, with brand new product and services being introduced in all three classes on its Boeing 747, Airbus A340 and Boeing 777 planes. The cost of the launch was expected to be S$500 million (Approximate exchange rate, S$1.65 = US$1). Coming in the midst of the worst economic crisis experienced by several East Asian economies, the product launch was viewed with caution by many analysts. Though most analysts agreed that the move would have a positive impact in the long run, they were divided regarding the short- term impact. While arguing that it was a risky manoeuvre, Chia Cheow Ming of Tat Lee Securities in Singapore said:

"Singapore Airlines is pulling away from the pack, which is fine if it can attract wealthy Americans and Europeans willing to pay a premium for upgraded services and seating. Otherwise, Singapore Airlines will have to ea2t their loss."

Simultaneously with the product launch, SIA also announced that its earnings for the year ending March 1999 would drop significantly versus previous years. As SIA's stock price fell 8% on the day the launch was announced, many observers were left 3wondering if SIA's ambitions had got the better of its judgement. Had it abandoned its policy of prudence? Was it not aware that even its closest competitor, Cathay Pacific, was struggling in the current economic environment?

STRATEGY AND ORGANIZATION POLICIES

Singapore Airlines came into existence on October 1, 1972. Since inception, it had followed a set of consistent strategies including the following:
• Maintaining the youngest fleet of aircraft among all major carriers;
• Deploying the latest technology in in-flight & other operations;
• Pioneering customer conveniences such as free headsets, drinks in the economy class;
• Marketing campaigns emphasizing its in-flight service (the Singapore girl campaign) and young aircraft fleet;
• Building excellence in related operations such as building and maintaining airports, maintaining planes, operating kitchens and transporting cargo.

SIA also followed a series of internal organization policies;
• Rigorous recruitment and selection procedures;
• Heavy emphasis on training at all levels in the organization;
• Actively seeking customer feedback;
• Rewarding staff that provided superior customer service;
• Empowerment and total involvement of employees through creation of smaller units within the company, job rotation and extensive communication between management and employees.

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Attachment:- Case Study - Singapore Airlines.rar

Reference no: EM132542028

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