Singapore Airlines

Balancing ActHARVARD BUSINESS REVIEW – JULY AUGUST 2010

SIA Winner of Best Airlines Awards

21 times winner of World’s Best Airlines

Award from Conde Nast Traveler.

3 times winner of Skytrax’s Airline of the

Year.

Singapore Airlines Balancing Act - HBR July 2010 - Report by Rohit Singh, IIBM Patna

2

SIA is the Most Cost Effective

Operator

0

2

4

6

8

10

Singapore Airlines European Airlines US Airlines Asian Airlines

Singapore Airlines, 4.58

European Airlines, 10US Airlines, 8

Asian Airlines, 6

Cost Per Available Seat Kilometres in Cents

Cost Per Available Seat Kilometres

* Data is based on study by 2007 International Air Transport AssociationSingapore Airlines Balancing Act - HBR July 2010 - Report by Rohit Singh, IIBM Patna

3

Successfully executes Dual Strategies

SIA offers World Class Service and at the same time is a Cost

Leader.

Airlines has never posted loss since its founding in 1972.

SIA executes Dual Strategies successfully by managing:

Providing Service Excellence cost-

effectively

Innovating in both centralized and

de-centralized manner

Being a technology leader and a

follower

Achieving Standardization and

Personalization in its processes

Singapore Airlines Balancing Act - HBR July 2010 - Report by Rohit Singh, IIBM Patna

4

Achieving Service Excellence Cost-

Effectively

Singapore Airlines Balancing Act - HBR July 2010 - Report by Rohit Singh, IIBM Patna

5

SIA Spends more than its rivals in key

areas:

And it spends less, partly as a

consequence, on:

Buying new aircraft Price per aircraft

Depreciating aircraft Fuel maintenance and repair

Training Salaries

Labor costs on flights Sales and administration

Innovation Back office technologies

SIA manages its two main assets – planes and people.

Fostering both Centralized and

Decentralized Innovation

Singapore Airlines Balancing Act - HBR July 2010 - Report by Rohit Singh, IIBM Patna

6

Serial Innovator by bringing many Firsts to the Civil aviation.

Follows a 4-3-3 rule of spending: 40% on training, 30% on revising

processes and 30% on creating new products & services each year

Product Innovation Department (PID) follows a highly structured

process.

SIA fosters the idea that employees especially those in customer

facing functions must innovate if SIA is to stay ahead.

It focuses on incremental innovation in most areas because the

overall experience matters most.

Being both Technology Leader and

Follower

Singapore Airlines Balancing Act - HBR July 2010 - Report by Rohit Singh, IIBM Patna

7

Unlike many market leaders, SIA engages in small improvements

in functions that don’t touch the customer.

SIA introduced technological break through to save costs.

SIA being pragmatic innovator also withdrew services which

customer’s don’t like or cause problems.

In 2004, SIA outsourced many of its IT functions so it could focus on

its core business.

Using Standardization for Personalization

Singapore Airlines Balancing Act - HBR July 2010 - Report by Rohit Singh, IIBM Patna

8

Airlines institutionalizes personalization by creating a service

culture through recruitment, training and rewards.

Crew Members gets access to personal information viz. name,

birthday from CRM for bringing delight to customer experience.

SIA’s training programs such as Transforming Customer Service

teach cabin crews how to anticipate customer needs.

SIA carry more crew members than competitors but these crews

help the airline provide unmatched service.

The How-To of Dual Strategies

Singapore Airlines Balancing Act - HBR July 2010 - Report by Rohit Singh, IIBM Patna

9

Harness the power of your people and culture.

Make good use of technology.

Utilize the power of business ecosystems.

Make investment decisions strategically.

Q&A

Singapore Airlines Balancing Act - HBR July 2010 - Report by Rohit Singh, IIBM Patna

10