Analysis of Singapore Airlines Limited

Analysis of Singapore Airlines Limited Air travel remains a large and rapidly growing industry. It promotes the world trade, enhances economic growth, international investment, tourism and this perhaps makes it key to the globalisation process in other industries. The airline industry has been weighed down by numerous macro-level socio-economic factors which include rise in oil price, the Tsunami case, increase in terrorism, SARS epidemic and these have been of negative influence to the profit level of the industry (Journal of Air Transport management, 2010). Singapore Airline Limited which is the worlds second biggest airline by market capitalization with its headquarters in Singapore was formed in 1947 by British interests as the Malayan Airways but became SIA in 1972 after it split from the Malaysian airline. The company along with its subsidiaries is engaged in airlines operations, airport terminal services, engineering services and other related activities with more than 30,088 employees as at March 31, 2010. The group operates in East Asia, south west pacific, Europe, the Americas, west Asia and Africa, with 66 destinations in 36 countries on 726 weekly flights with about 106 fleets (DATAMONITOR, 2010). The group which is owned by the Singapore Government through its parent company Temasek Group owns 54.5% of the company shares. The group recorded revenues of S$12,707.3 million during the financial year ended, as on march 31, 2010 with a 20.56% decrease from the previous year. Its operating profit was S$63.2 million during the 2010 fiscal year ended which was represents a 93.0% change from the previous year also. Profit attributable to equity share holders of the company was at S$216 million with a 79.7% decrease from the 2009 financial year ended.(Singapore airlines, 2010). The decrease was as a result of low demand for airline and cargo operations as a result of the economic crisis. The primary objective of this report is to analyse the airline industry, its major market players, and alliances, examine the key driving forces of change and assess the present state of the sector in relation with Singapore airline limited. Finally this report will also concentrate on the analysis of Singapore airline limited financial statements and compare its records with one of its main competitors. 1. BACKGROUND TO THE AIRLINE INDUSTRY The airline industry had total revenue of $1380.5 in 2009 which represents an annual growth rate of 2.5% between 2005 and 2009. The airline industry volume also increased its growth between 2005 and 2009 by 2.56% to get a total of $2,002.9 million passengers in 2009(DATAMONITOR, online). The global airline industry reduced in 2009 due to the global recession but from forecasts it will develop strong growth by 5% before 2014(DATAMONITOR, online). Some of the major passenger airlines include Cathay pacific, the emirates, U.S airways, Japan airlines; air France-Klm and south west airlines e.t.c. Cathay pacific won the 2009 airline of the year title in the famous world awards replacing Singapore airlines. 1.1 AIRLINE INDUSTRY MERGERS AND ALLIANCES Deresky (2006), defined strategic alliances as partnership between two or more firms that decide they can better pursue their mutual goals by combining their resources as well as their existing distinctive competitive advantages. Airline industry mergers are formed in response to the dynamic economic conditions of the aviation industry and determine cooperate aims of competitive ratios (ECONOMIC WATCH, online). This involves leasing of airplanes and purchasing airplanes as well. For instance the case of Air France takeover of Klm in 2004 by acquiring 89% of its shares has enhanced the number of flights and offers various flight options to select from. In addition to mergers, airlines are forming alliances with one another in order to achieve network size economies through code sharing as well as scale economies in the purchase of fuel and aircraft, combining forces to make purchases serves to increase the industry players bargaining power and therefore reduce supplier power. There are 3 major passenger alliances in the airline industry which are SKY TEAM founded in 2000, ONE WORLD founded in 1999 and STAR ALLIANCE founded in 1997 with 27 members and a market share of 29.3% of whom Singapore airlines joined the group in 2000 in order to broaden its flights network and to increase its competitive advantage. Thus, this has increased SIAs global presence through code sharing as their star alliance network covers 1,160 destinations in 181 countries. 2. DRIVING FORCES FOR CHANGE/ LIMITATION Key driving forces for change within an industry are external factors which cause change to the system of interest to stakeholders in that they are considered to be beyond the control of these stakeholders. Driving forces can include changes in social, technological, environmental, economic and political factors. An examination of the factors influencing an industry is a general way to begin the industry analysis and such a study is used to develop the competitive advantage of the organization to enable it defeat its rivals. (lynch, 2006:93). This is always done by the porters five forces framework analysis. The external environment has an enormous impact on the airline industry. There has been unstable time for the airline industry. It has been confronted with a market decline in international tourism in the aftermath of September 2011 terrorist attack in the united states and more recently traffic loss attributable to the war in Iraq and several terrorist activities. 2.1 Porters 5 Forces frame work on Airline industry Threat of New Entrants. Youll need to look at whether there are substantial costs to access bank loans and credit. If borrowing is cheap, then the likelihood of more airliners entering the industry is higher. The more new airlines that enter the market, the more saturated it becomes for everyone. Brand name recognition and frequent fliers point also play a role in the airline industry. An airline with a strong brand name and incentives can often lure a customer even if its prices are higher. Distribution is not easy for new entrants as there is need for establishment of online booking system, and relationships with the sales intermediaries. Power of Suppliers. The airline supply business is mainly dominated by Boeing and Airbus which has high power. Supplier power in this industry is so much that airlines have to go into contract with the suppliers of the aircraft. Constant increase in oil price also tends to boost the supplier power of the industry. In 2010 year ended, Singapore airlines reported that 33% of its cost was fuel (DATAMONITOR 2010). Another factor that boosts the supplier power has to do with the maintenance of the aircraft as a result of cost of funding staffs, mechanics for routine check on aircraft. Power of Buyers. The bargaining power of buyers in the airline industry is on the high side. There are over a hundred of airlines companies which operate in the Asian region and as a result of this, there are numerous choices for the individual to choose from and at most times would go for the low carriers. Availability of Substitutes. For regional airlines, the threat might be a little higher than international carriers. When determining this you should consider time, money, personal preference and convenience in the air travel industry. Competitive Rivalry. Highly competitive industries generally earn low returns because the cost of competition is high. This can spell disaster when times get tough in the economy. 3. SINGAPORE AIRLINES STRATEGIC POSITION. As Porter (1986, cited in Philips and Fox, 2003) stressed that, Competing internationally is a necessity rather than a matter of discretion for many firms, this states that the success of almost every international company will depend on how effectively they can compete on an international scale. This section aims to identify the current strategic posture used by Singapore airlines limited successfully, within the era of globalisation. In the airline environment, Singapore airline has always outperformed its competitors. It has never posted a loss on annual basis, has achieved substantial and superior returns compared to its industry and has received hundreds of achievements awards for its service quality. This success has been achieved by the company through the dual process of differentiation through service excellence and innovation coupled with cost leadership among its peers. Singapore airline has achieved sustainable competitive advantage and has consistently out performed its competitors through out its three and half decade history. The key success to this may be said to be the fact that it manages to navigate through two poles which most companies think are distinct. At cooperate level, Singapore airlines works with diversification. The airline group has 36 direct subsidiaries and associated companies which includes Singapore airline terminal, Singapore engineering company and Singapore airlines cargo.(Singapore airlines,2008). Its airline subsidiaries which include 100% ownership of Silk air, 49% of Tiger airways and 49% of Virgin Atlantic is said to cover the customer areas within the industry in terms of domestic and international distance. As part of its international strategy, SIA in 2000 joined the star alliance which has been noted earlier in the report. Strategies of differentiation and cost leadership have necessitated different and incompatible investments and organizational models. A strategy of differentiation implies high quality offering and significant investment in innovation, staff development and branding which results to high cost. SIA achieves these but with a low cost. The table below outlines many of elements in relation to the dual strategy of integrating elements of differentiation and cost leadership in SIA. Table 1 Elements of differentiation and cost leadership strategies at SIA Differentiation Positioning of service excellence and superior quality, brad equity(marketing strategy) Developing the Singapore girl( hr development policies) In-flight experience(young fleet, entertainment system, gourmet cuisine-operations strategy) Cultural values and practice of constant innovation and learning. Changi airport one of the worlds best(related infrastructure) Premium pricing in Singapore and in business/first class and higher load factor as differentiation indicators. Cost Leadership Young fleet (fuel efficiency, lower maintenance costs, effective fuel hedging, paying cash for planes. Labour costs compared to major competitors (16.6% vs. 30%); continuous drive for productivity, cost reduction programmes. Related diversification through efficient subsidiaries that contribute to bottom line. Cultural values; cost consciousness, obsession with reducing wastage. Innovations not only to increase differentiation but also efficiency. Changi airport as one of the most efficient(related infrastructure) L.heracleous, J.Witz. Journal of air transport management (2009) Singapore Airlines Ltd maintained its leading position in air through stellar marketing campaigns, cutting capacity while increasing passenger load and by constantly innovating in offering the latest technology for its new products and services in-flight 4. SINGAPORE AIRLINES FINANCIAL ANALYSIS IN THE LAST 5 YEARS. Singapore airline over the past 5 years has experienced growth until the 2008 economic crisis which decreased its revenue growth by 20.56%. In terms of return on assets, the airline company experienced a downturn last year. Despite this they still show a decent ability to generate profit from each asset controlled. The 2010 ROA figure which is 1.13 is lower due to the previous years economic crisis. This is also the case of ROIC which stood at 1.71 at the end of the FY 2010(Thomson one banker), showing that the allocation of resources and investments has justified Singapore airlines. From the view point of last five years; the company has experienced growth. From the gross profit margin point-of-view the company has experienced a slight increase to 14.75 over last years 12.83. 4.1 QUICK AND CURRENT RATIO OF SIA OVER THE PAST 5 YEARS SIA over the past 5 years has made an increase in its acid ration other than in 2009 when it dropped due to the global economic crisis. in the year ended march 2010, they were able to operate a ration of 1:33 which makes it able to meet current obligations using liquid assets. on the other hand, the current ratio of 1.45 as at march 2010, is acceptable. From the financial analysis it is clear to see that even though the Singapore airlines enjoyed constant growth almost in every aspect in the analysis, the year 2009 was very difficult as earlier noted due to the financial crisis but records from the FY ended march 2010 shows its on the recovery. 4.2 COMPARISON OF SIA FINANCIALS TO CATHAY PACIFIC AIRWAYS Following the financial analysis of Singapore airlines highlighted above, a brief comparison of its finances with Cathay pacific Airways with regards to Sales, Return on Assets and Return on invested capital. SIA recorded a net sale increase of 0.15% in 2009 and 20.56% decline in 2010 where as Cathay Pacific Airways recorded a net sales decline of 22.63% in 2009 financial year. On Returns on Invested Capital, SIA recorded a 1.71% growth rate in 2010 over the 6.69% growth rate in 2009 whereas Cathay Pacific recorded 7.31% growth on Return on Invested Capital. (Thomson One Banker, 2010). This record perhaps shows the effect of SIAs business strategy and its effects on competitive advantage in the airline industry. 5 SINGAPORE AIRLINES AND ITS SOCIAL RESPONSIBILITY This is concerned with company ethics and social responsibility. Singapore airlines took many activities to maintain company ethics. For instance it is the first airline in the world to fly the new Airbus A380 which is preparing for the first commercial flight of the double Decker jumbo jet from Singapore to Sidney and return. It took place in October 2007 and in a first time move, all proceeds from the sale of tickets on the first flight was donated to charity organisations. Singapore Airlines Ltd considers environmental awareness to be very important, and in 2009 introduced initiatives to reduce 550, 000 tons of carbon emissions (Singapore Airlines,2010) The companys efforts included studies on the effectiveness of carbon offsets, the maintenance of a young and modern fleet of aircraft which was environmentally efficient and the establishment of a Fuel Conservation Committee that looked into fuel efficiency, waste management and water-saving devices. SIA also took delivery of 12 new aircraft which are quieter and boast substantially lower fuel burn per-seat-kilometre and lower carbon emissions. CONCLUSION In response to the adverse business conditions within airlines, SIA planned to reduce capacity by 11% to match demand, translating to suspensions of flights on a range of routes such as to Amritsar, and use of smaller aircraft on others. Secondly, it reduced fuel surcharges on short and medium-haul segments by around 5% to 21%, with highest reduction for short haul segments in economy class, which was the most active segment in the downturn. Thirdly, it negotiated a delay of delivery for eight A380 aircraft on firm order with Airbus. Fourthly, it drastically reduced airfares and engaged in various promotional activities. This has continually kept it in top priority among its peers in the airline industry and perhaps there has been a positive forecast of the companys growth in few years time.

Personal Narrative- The Dieting Cycle Essay -- Personal Narrative, ess

It was about 1:30 AM. "Well, its time to hit the sack," I thought. I had had a really long day. I had been in school since 8 AM and I was truly exhausted. God I hated Mondays! Three classes, four hours of work, and then a night class where even the walls attempted to escape the boredom of the lectures. I wondered how I was able to do this every week. I laughed and thought, "I must have a lot of patience..." I quickly changed into my favorite pajamas - sweats and a tee- and I began to brush my teeth. As I washed my face to eliminate the dirt and grime of a hard days work, I caught myself staring into the mirror. I said to myself, "Gosh, I look horrible today." My hair seemed so dull, so bland. My face looked so pale, so white. My eyes were surrounded by a purplish blue coloring, the same coloring that I had attempted to hide that same morning with my makeup. My eye lids felt like they weighed a ton. "Damn! Mondays are really starting to wear me down. I got to start getting some rest." But that was not it, and I knew it. I lied to myself so that I would feel at ease and calm, but deep down inside I knew why I looked the way that I did. It wasn't my hectic schedule and it wasn't the lighting of the mirror. It was my relentless battle that I fought day and night with no chance of victory. As I entered my bedroom, I immediately pulled down the covers and laid my body to rest. My spine hit hard against the rings within my mattress and I was in pain. "Ouch! That hurts like hell! When am I finally going to get a mattress that is actually soft and comfortable and that doesn't dig into my back." But the mattress wasn't the problem. I had used that mattress for years and it never once gave me a problem. But now things were diff... ... was now past 2:00 AM. I had wasted more than half an hour walking to and from the kitchen debating whether or not I should or should not eat. This was ridiculous. "Tomorrow I start fresh," I said. I will eat lunch and dinner. I will start trying to get my life back together. I felt at ease and was comforted by the thoughts of living a normal life again. Deep down inside, however, I knew damn well that tomorrow would be no different than today. I knew that I would start the day worrying about how I looked and how much weight I had gained. Then I would spend the day dieting and not eating a thing. Then at night I would flip out and tell myself that I would try harder the next day to make things right. It was an endless cycle that just went on and on. I prayed that it would stop, but I feared that it was too late. I had gone too far and now there was no turning back.

My Vision Of Tomorrow Essay -- Personal Narrative Writing

Tomorrow's world will be much different and also, much better in many ways. We will have developed much better technology. We will have made huge medical advancements. The general quality of life will be much better, and living will also have become much easier. Still, nothing can ever be perfect, and in a world of the future, we will experience many complex and unavoidable problems such as depletion of resources, overpopulation, and the threat of nuclear and biological warfare. The solutions to these dilemmas will not be immediately apparent; but, we will have to overcome them. The future could hold great opportunities for many people, but we will need to work at it.   Ã‚  Ã‚  Ã‚  Ã‚  In the future, technology will have advanced so much and so fast that many new possibilities will arise. Most likely, we will enjoy interplanetary space travel frequently in the future and we may even develop communities on other planets, such as mars, or perhaps on the moon. Numerous scientists and writers have already also predicted this. Life will also be made much, much easier in the future for humans by robots, computers, and other automatons. Many simple tasks done today by humans such as cooking, cleaning, and repairing household items will be done by these machines much more quickly and efficiently and with less pollution. Almost all of the current manual labor jobs, especially in the United States, will become obsolete and robots wil...

Rotten dot Com :: essays research papers

I have to say rotten dot com is not my type of website, but it did catch my attention. Even if you are disturbed or not attracted to something, you should give it a chance. You never know what to expect especially when you see, "Rotten dot com collects images and information from many sources to present the viewer with a truly unpleasant experience" on the main page. The content of the site is different than any other website that I have seen, but the form and layout is very common among websites. Rotten dot com actually reminds of a newspaper's layout. On the main page there are several links, some on the left side, and some going down the bottom of the page. These links can be related to the subtitles of newspapers which lead you to the inside story. Being that the website is easily viewed and understandable, rotten dot com is a very well designed website. All the links show what topics can be viewed. Then after clicking on the specific link you want, a header page is opened. For example, if you click on the link "Celebrity Morgue", you will see a page with two skeletons on it, and the title overlapping them. Below the title and skeletons is a list of people who you can view dead bodies of. Under the photos of the bodies, there are brief descriptions of how each individual person died. Another one of these links is called "famous." The famous link takes you to a page similar to the Celebrity Morgue page, where there are several sub links on the page. With these links you can view rare photographs. Some of these photos contain Richard Nixon meeting Elvis Presley, and a picture of David Duchonovy almost nude, which appeared on the cover of a European magazine. Another picture is of Nancy Reagan sitting on Mr. T's lap, as he is dressed like Santa Claus. As I previously stated, the form of this website is extremely basic. It contains a lot of links to other pages, which consist of a few odd and disturbing photos. Each page contains a few cartoon pictures, which describe and are related to that specific title of the page. A nice link to click is the "mug shots" link. You can view and take a look at famous actors', criminals', and professional athletes' mug shots. Some mug shots that I think are good are Pee Wee Herman because he got arrested for masturbating, Charles Barkley because he broke a man's nose in a bar fight, and Al Pacino as young hoodlum growing up in Brooklyn.

Machiavelli’s Premise Essay

1. Do you agree with Machiavelli’s premise that if given the choice between the two, the prince is better served by being feared than loved? How does Machiavelli make the case for his position (details, modes)? Are his arguments convincing? If you took the self-analysis on high-Mach or low-Mach, what were the results, and were you surprised by your score? 2. What is the thesis of Neil Postman’s forward? Do you agree or disagree with his point of view? Provide support for your position. 1- The prince is better feared than loved, although striking a balance between the two would be best. As Machiavelli stated that the prince should do his utmost to escape hatred and too much fear would create hatred. The prince should try to balance love and fear based on his people and the situation at hand. 2- Both authors have different point of views; Orwell’s view is that we will be deprived of things by externally imposed oppression and by inflicting pain while Huxley’s view is that we will be distracted from our real goals with lust and pleasure. I agree to some extent on both points of views, except for the part that states that what we hate will ruin us. If you hate something that is bad then I don’t see anything wrong with it; I don’t think it can ruin us in any way. On the other hand I agree that lust and desire only lead to greed and other sins which corrupt us. Would time traveling be cool? Time travelling would not be cool. In fact many scientists have done a lot of research on black holes and time warps. Einstein did work on it as well as Stephen Sawking to no avail. Actually Stephen changed his theory on the black holes losing and retaining information twice. If time traveling was possible we would be open to endless opportunities and nothing would be a challenge. Life would be stale without surprises, discoveries and evolution.

Film Inception Analysis

So, the long awaited film ‘Inception', written and direction by Christopher Nolan, in which Leonardo DiCaprio stars, was finally released. And after weeks of procrastination, I finally sat down and watched it. I had heard from my friends that it was an enthralling movie, with a great plot and truly magnificent acting, but of course I had to decide for myself. The film starts with a memory, or a vision from the future, no one is quite sure. We are then quickly taken back to a time before that memory, and the characters are introduced. We first meet Dom Cobb, a slightly unstable and troubled, but undoubtedly clever, ‘dream thief.' His job, unsurprisingly, involves infiltrating the minds of people and stealing their dreams, to gain an idea of their thoughts and motives. Now at first he seems to be a rather normal man, which a rather abnormal job. However, we are soon introduced to his many flaws and weaknesses. For instance, he often warns his colleagues to never use personal feelings when in a dream, but he constantly takes around the guilt he carries. He feels guilty because his wife committed suicide, and he blames himself. He was trying to extend the idea of mere dream entering, and begin a world changing concept, inception. This means that they would have to plant an idea in someone's mind so that it grows into a feeling and they act upon this feeling, scary stuff really. He did this to his wife successfully, but he made her believe that she was in a dream however she was in reality. We are told that the only way to be released from a dream is to die in the dream, and so she kills herself to return to her ‘reality.' Dom Cobb blames himself for this and so, whenever he enters a dream, she follows him around, attempting to sabotage the whole operation. We are then acquainted with Arthur, Eames, Mr. Saito and Ariadne, and these are all accomplices of the main man. Arthur and Eames are his assistants they support him by acting as his friends or enemies inside the dream. The plot is, to say the least, baffling. Dom Cobb and his buddies decide to enter the mind of one Robert Fischer, to stop him from taking over his father's company and becoming a multimillionaire and providing energy to half the world. Mr. Saito is the man who gives them the job of planting an idea inside Robert Fischer's mind, and so he insists on going into the dream with them. They then go through different levels or phases of dreams, such as level 1, 2 and 3. Level 1 is merely a dream. Level 2 is a dream within a dream, which is confusing, and then Level 3, which is a dream within a dream within a dream, and by this point I was truly bewildered. Although the plot is extremely confusing, it is very well written. The acting is phenomenal, with a special mention going to Leonardo DiCaprio, whose performance was exceptional. It had been said that this film was one which had to be watched twice to gain the full experience and understanding of the plot, and I agree with this wholeheartedly, although it did leave me scratching my head even after the second viewing. The choice of music is also quite good and I was usually left thinking to myself that that song summed up the scene perfectly. The same has to be said with the costumes, they were generally well chosen. The suits were all immaculate, and the snow suits were also quite a nice touch. My favourite scene was definitely the one which confused me the most. The final scene is set in Leonardo DiCaprio's house. He returns, thinking that the children will run away like they normally do, but instead they run towards him. He takes a small object with him, like every other dream thief, to distinguish between dreams and reality. Dom Cobb takes a spinning top, which spins forever when he is in a dream. The viewer thinks he is in a dream, as his children are running back to him, but the spinning top ceases to spin. This, I think, is the scene that confuses many people and it is the reason that many people have to return to see it once more. I hope that ‘Inception' signifies the beginning of a new wave of futuristic films, and if it has paved the way for other similar films to arrive, then I will be glad. This film is definitely worth watching, and I would highly recommend it. While the film is slightly unrealistic in the way that they jovially jump from dream to dream, it is most certainly a film that will stick in my mind for a long time.

Celestial Seasoning

Celestial Seasonings was found by small countryside family aiming to bring natural herb benefits to the customers in 1969. Celestial’s herbal tea was sold through local stores initially. Celestial Seasonings went through major change when it was bought by Kraft Inc in 1984. Kraft brought Celestial products to new markets before selling it back to the Celestial’s old management in 1988. The selling and re-purchase of Celestial benefit the company to get into national market and exposure to wider consumer range.Throughout the decade of 90’s, company extended its product line as per market demands. As result herbal supplements, medicinal teas, herbal supplement capsules and many other products were added to celestial product range. Company had good growth till end of decade until some of its product start showing the declining trend. There are some problems relating to celestial Seasonings progress which include ethical issues, quality concerns and limited target ma rket.Celestial Seasonings makes its entire product range from natural herbs but still company cannot promise to make people healthy. It’s a product not medicine so it cannot claim for treatment of illness and claiming so raises ethical issue. Quality concern is another problem with the celestial Seasonings products. 71% people consider Celestial Seasonings products safe for health while 29% people have some concerns about safety. They think that being natural doesn’t make it safe. Herb source authenticity also raises questions about quality.Celestial Seasonings offer a wide range of product but major target market is baby boomer ladies with 35 to 54 years of age. Its tea products have high price than other tea competitors. This raises the problem of limited target market. As a solution of ethical problem, company must not make unjustified promises. Product statements can show that these can help living healthier life rather than its impression of a curing product. Qual ity can be assured by club marketing programs and virtual tours. Sustainable sourcing assurance can also help improving customers’ confidence.Club marketing programs can be launched and events can be held on farm and production locations to improve customer perception for product quality. Market development is solution to limited target market issue. New target markets can be explored. Company can go global and enter the markets where tea is a part of tradition like England, India, and Pakistan. Celestial Seasonings has kept its promise to bring natural herb benefits to the customers. Company can overcome current problems and increase its profits with market development, club marketing programs and keeping the ethical concerns.