DB Forum 4
Forum 4
In the case “Singapore Airlines (SIA) we see that they continually exceed their
customer expectations, but more importantly, their own expectations were continually
challenged and met. Due to their internal procedures, policies, training and “the ‘three
pillar’ strategy of superior inflight service, the most modern fleet, and outstanding ground
service” (Jinx & Peiperl (2011), p. 536); would keep SIA at the top. With the “three
pillars” as their guide, SIA keeps the other airlines at bay. They also keep a strong
customer base through superior inflight services, modernized fleet of airlines and
outstanding service on the ground. Some of the questions we seek to answer will be the
main success of SIA, some vulnerabilities throughout their success, difficulties SIA might
incur while sustaining their top position in the airlines industry. And lastly, what do
world-class organizations need to do to improve and change continuously?
What have been SIA’s main ingredients of success? Simply put, world class
customer service, most modern fleet and excellent ground service or as they call it “the
three pillars”.
The three pillars all contributed to SIA’s undeniable prosperity. The airlines had topped
carrier profitability tables as its pre-tax profit rose from $69 million in 1983 to $1596
million in 2004/2005, despite the company’s first ever loss; $312.3 million in the first
quarter of 2003/2004.
SIA was known for their spectacular inflight services and their flight attendants were
known as the “Singapore Girl”. This advertising concept was so popular that Madame
Tussaud’s in London had decided to use their signature outfit as a brand for international
DB Forum 4
travel (Jinx & Peiperl (2011), p. 537). SIA also has the largest fleet and the most modern
fleet, including 58 Boeing 777 planes in full operation and 31 on standby, should they
need to increase their fleet.
SIA’s passenger fleet was composed of 89 aircraft. Because it frequently brought
in the latest models, the average age of SIA’s aircraft was five years and four
months and remained one of the industry’s youngest fleets.
Lastly, their ground service professed to be with you all the way, even if that meant you
wanted to split your bags up and have them delivered to multiply airports. “Attention to
service ‘on the ground’ was SIA’s most ambitious pillar, dating back to the late 80’s”
(Jinx & Peiperl (2011), p. 538). They focused on improving all areas of ground service -
reservations, ticket offices and at each airport SIA flew too. Meaning they had to rely on
other airlines for help and the station manager was held accountable at each airport. This
was definitely a very aggressive campaign, but it was successful through “Show You
Care’ through body language evidencing interest and attention, ‘Dare to Care’ and ‘Be
Service Entrepreneurs,’ which meant displaying creativity to exceed customer
expectations” (Jinx & Peiperl (2011), pgs. 538-539).
How has their success become vulnerable? First, as they seek to remain on top,
major companies will always have competition from other vendors and SIA is no
different. They had low cost carriers try to take away some of it market share through
obvious ways of lower costs for flights. However, SIA was bound and determined to
keep their high-spending business travelers with gourmet foods, vintage wine, smiling
hostesses and on-board technology, “these were the cornerstone’s of SIA’s competitive
advantage” (Jinx & Peiperl (2011), pgs. 536).
DB Forum 4
Why is it difficult to maintain a leadership position of a company like SIA and
continuously improve? Productivity and continuous change lead the way to success.
Scotti & Volta, authors of Profitability change in the global airline industry state that:
Productivity change is mainly driven by technical change becoming continuously positive
from early 1990s. Furthermore, in the last decade profitability change is mainly driven by
input price change which exhibits a similar pattern to output price change. In presence of
productivity growth, the output price increase is lower than the input price increase
suggesting that part of productivity gains are transferred from airlines to consumers.
“SIA saw that continuous service improvement was the only way to retain its supremacy.
Moreover, service had to progress while expansion continued” (Jinx & Peiperl (2011), p.
536). SIA knew that their loyal customers would continue to pay so long as SIA
continued to deliver new and improved flights. With their “three pillar” approach and
their three decades of success they were right.
What do world-class organizations need to do to improve and change
continuously? The authors of Service quality and productivity in the U.S. airline industry
state that “The airline industry faces economic challenges making it paramount that they
provide satisfactory service to customers relative to their expectations” (Choi, Lee &
Olson (2015). If we are to believe past successes and others who state that customer
service is key to success, but also have the willingness to invest in your people via
training, and innovation. Just as SIA has been successful for the past 30 decades,
DB Forum 4
open-mindedness, customer-focus approach to continuous change and exceeding
customer expectations will surely allow any organization to be successful. Also, for
Christians, we need to look to the bible for help and Proverbs 16:3 says “Commit your
work to the Lord, and your plans will be established” (NIV). Just as Christians commit
their work to the Lord, secular organizations can also commit themselves to doing what is
right, which in turn will allow them to be successful.
DB Forum 4
References
Choi, K., Lee, D., & Olson, D. L. (2015). Service quality and productivity in the U.S.
airline industry: A service quality-adjusted DEA model. Service Business, 9(1), 137-
160. doi:http://dx.doi.org.ezproxy.liberty.edu/10.1007/s11628-013-0221-y
Jick, T. D., & Peiperl, M. A. (2011). Managing change: Cases and concepts (3rd ed.).
New York, NY: Irwin/McGraw-Hill. ISBN: 9780073102740
Scotti, D., & Volta, N. (2017). Profitability change in the global airline industry.
Transportation Research Part E, 102, 1-12. doi:10.1016/j.tre.2017.03.009
Powered by TCPDF (www.tcpdf.org)
