1

2







3


Singapore International Airlines (SIA)-A Benchmark
Airline:


Over the years the Singapore International Airlines has built up a strong brand name as a
trend-setter in the aviation industry, particularly in terms of safely, innovation and service
excellence. Its focus on the differentiation of its services from other airlines has made it one
of the most successful and recognizable airline brands in the recent past. It is also an industry
bellwether for air-craft purchases. Its major shareholder being the Government of Singapore,
SIA has always received tremendous support from them. It is the parent airline of the
Singapore Airline Group of Companies. It has diversified into airline-related businesses such
as aircraft handling, engineering and catering. The Singapore girl as we know is what the
hostesses are called- is recognized as a symbol of excellence in service quality. The concept
of choice of meals in the economy class was first pioneered by the SIA. Other tangible and
intangible differentiations were first pioneered by SIA which is now copied by all major
airlines.


The Advent of Problem in the SIA:


The problem began during and after the difficult economic conditions such as the SARS
outbreak in 2003 and the Middle East crisis. The relation between the group management and
the labor unions began to sour, particularly after the wage-cuts and lay-offs of over 400
employees. It was regarded as the highest number of lay-offs in the history of SIA. It went on
for a further wage-cut and lay-offs in order to trim its operating costs. The whole incident
was being regarded as self-serving by the Unions. The full support from the SIAs major
shareholder, the Government of the Singapore was also considered by the unions as
suspicious and they did not like it a bit. They thought these excuses were used just to
downsize the number of employees.







4
Duplication of SIA differentiation strategy by other
Airlines:


Then came the copycats, the other airlines who did not waste any time in copying many of
the remarkable innovations pioneered by SIA. SIAs development as a carrier came through
their strategy of differentiation. But soon it became a norm, as a result of the other airlines
adapting the ways. The sensational additions of luxury such as choice of meals in economy
class, innovative entertainment options etc that were introduced by the SIA which became
their specialized field, no longer remained so. Main concern was the increasing competition
from International carriers headquartered in the neighboring countries, such as Thai Airways,
Cathay Pacific, Malaysian and Qantas. They duplicated some of the key features of SIAs
competitive strategy, which included recruitment, in-flight service, fleet management etc


The Operational Investments by the SIA in recent times:

To make its presence powerfully around the world, SIA in order to expand its business,
purchased 25% of Air New Zealand. But as the Air New Zealand went bankrupted, the deal
turned sour and SIA lost about $157 million. Around the year 1999, SIA bought a 49% stake
in Virgin Atlantic Airways worth $1.6 billion. By 2007, it lost 60% of its value. Many said
that the partnership was not working because of the different cultures of the respective
airlines. Mr. Chew Choon Seng the CEO of the SIA was faced with a challenging task of
determining the competitive strategy of SIA in turbulent times.




5
The Traditional Airline Industry:

Conventionally, due to the national and international regulations, the airline industry based on
the limiting effects was fragmented. Each country has its own landing rights and local
ownership requirements. The large airline companies developed domination only on their
own regional markets. Thats the best they could do even being industrys biggest airlines.
The competition was divided into each region and it was not global. The sole reason being
different countries not allowing other airlines to have their business in their countries and
only the government owned national carriers were given the autonomy to run their business
in their respective countries. Exception was the United States, where they did not allow the
national carriers to dominate rather they encouraged a fair competition among the airlines
inside their country. However the scenario eventually changed in the 1990s when the industry
began to reform as a result of the deregulation, privatization and the advent of the new
technologies.






6

The Consequences of the Reformation of the Industry:

United States deregulated its airlines in the late 1970s and as a result it has witnessed the
severe competition among the airlines in its country. Europe, soon after the creation of the
European Union, terminated the country-specific barriers and allowed free-market
competition among the carriers. As a result they also entered the world of competition of the
airline industry. In Asia, some major regions started allowing greater access to foreign
carriers. Japan took an enormous step in the process of deregulation by selling off its shares
in the then state-owned Japan Airlines and authorized All Nippon Airways to serve
international markets. On the other side of the globe, in South America, many small national
flag carriers were privatized. Countries such as Argentina, Mexico removed the anti-
competing barriers and infused considerable levels of market competition in their airline
industry. They also privatized their national carriers.
This trend gained a lot of significance and appreciation. Countries such as the European
nations were by then having discussions with the United States to operate an open
transatlantic market area where landing rights would be determined by free market forces
rather than regulatory process.The era of globalization started. Nations started having open-
skies agreements between each other. There agreements were bilateral agreements between
countries that agree to provide landing and take-off facilities for air-carriers coming from any
of the partner countries.





7
The Successful Saga of Singapore:

By the 1990s Singapore became a flourishing nation and was envied by the neighboring
countries for its triumphant achievements. Its per capita GNP increased by 32% by the 1990s.
Mr. Lee Kuan Yew, the most powerful Prime Minister in the countrys history was the very
reason for such change in the country. He was able to motivate his fellow countrymen. He
announced his intent to develop Singapore so that they could compete head to head with rival
Switzerland in terms of standard of living. He was not late to unitize the patriotic spirit of the
people. He gave emphasis on superior education standards, a controlled labor environment,
significant outlays for training and development of the people of the country. He believed
that these all helped to enhance the quality of human capital. By 2004, Singapore had the
highest rate of literacy rate in the region. Kuans vision did pretty well fit together with the
Singapores Confucian work ethic. It stressed on responsibilities over rights and placed
enormous value on attributes such as hospitality, caring and service- the biggest asset of
Singapore. Thus, as a result of all these, Singapore ranked among the best countries in terms
of human capital in 2004 and was often regarded as the friendliest place to do business with.
But with the rising of standard of living meant a higher wage. In addition to that the small
size of the local population and a very low unemployment rate, the availability of labor was
seen as a potential obstacle in the drive toward further growth. Many large companies were
already depending on a considerable number of expatriates, that is they were hinging labors
from other countries, particularly the from the neighboring countries and west in the
workforce.




8
The Tale of the Singapore Airlines: The Company:

Singapore Airlines began with the incorporation of Malayan Airlines (MAL) in the year
1947.That is it started its first commercial passenger service. In the year 1972, due to political
disagreements between Singapore and Malaysia resulted in the formation of two entities:
Singapore International Airlines (SIA) and Malaysian Airlines System. Thus we can say the
birth year of the SIA is 1972. The long association with the Malaysian counterpart proved
very useful for SIA. The crew working there gained significant flight experience by working
jointly through out the South-East Asia. Their safety records were flawless. The overall
association worked out pretty good for SIA. The SIA personnel were able to experience and
learn more about their works. In addition, they also gained crucial operating experience
which varied from flight operations to administrative importance. Following the separation,
SIA received half the combined assets. These included most of the overseas offices, the
headquarters building in Singapore and also one almost new computer reservation system. By
2003 SIA became one of the most established and popular airlines in the world. It reached
over 90 destinations in over 40 countries in Asia, Europe, North America, the Middle East,
the South-West Pacific and Africa.


SIAs subsidiary is called the Silk-Air. It covers 24 destinations in the South/Southeast
region. This was mainly publicized and promoted as an option for vacation travelers who
wanted to travel short distances between various tourist spots in the region such as Penang,
Yangon etc.

Both in terms of operational performance and its profitability history SIA was doing really
great. The record it had created was envied by the other airlines. SIA was one of the few
Asian airlines which continuously posted profit even at times of economic downturns in the
1990s in Asia. However, its short-term performance record began to decline as a result of
SARS attack in the south east region and the Middle East crisis and the global economic
conditions that had taken hold of most of its key markets. In view of all these major issues,
the company was looking for alternative courses of actions to survive in the industry





9
Ground Services:

SIA has been all along known for its ground services. They were known for giving superior
services and they did it by building a strong network of wholly owned subsidiaries and joint
ventures to offer operational support in the areas such as catering, terminal management, and
aircraft maintenance. The subsidiaries were largely managed as an autonomous entities and it
had to bid for orders from the parent company. In many of the core areas they were rated as
number one. One of the largest of the groups was The Singapore Airlines Terminal Services
(SATS). This group specialized in terminal management which includes management
services such as catering, passenger and baggage handling, and ramp operations. SATS are
one of the largest flight kitchens in the world at Changi International Airport. On average
they produce about 45000 meals a day. Some of its clients were the British Airways,
Quantas, Lufthansa and Japan Airlines. In addition to that SATS serves 70% of all airlines
that fly in to Singapore. SATS also went global by going in to joint ventures in Beijing, Hong
Kong, Chennai, Manila etc.


The Services Offered By the SIA at the Change
International Airport and Other Airports:

The SIA was one of the first airlines to introduce the electronic ticketing through its website.
Online ticket booking was allowed all over the world where the SIA had their hubs. For its
customers convenience, it introduced the automated check-in systems on certain flights and
it attracted a lot of travelers. The company adopted technologies in variety of forms, allowing
check-in via e-mail, telephone and fax. For the first-class and business-class, the SIA offered
the Silver Kris Lounge, which was an illustration of sophistication and a demonstration of
exoticness that reflected the culture of Singapore. The lounge consisted of plush armchairs,
deep-pile carpeting, aquariums, tropical gardens and paintings by the original Singapore
artists. It also comprised the top of the line business equipment such as computers, fax
services etc. It was undoubtedly one of the worlds largest and most luxurious airport
lounges.




10
The Fleet Acquisition Mode of the SIA:

The SIA started very small. When it started it just had a fleet of just 10 aircrafts and covered
22 destinations. But gradually, over the years SIAs position became stronger and stronger.
By 2003, it was operating a fleet of 97 aircrafts and most of them were capable of long-haul,
large-capacity flights. The SIA was also in the process of ordering more aircrafts and was one
of the first airline companies in the line to purchase the 500-plus passenger, double-decker
mega liner that Airbus would unveil shortly. The SIA followed a very careful and expensive
fleet acquisition policy. The policy was such that its fleet average was a little over five years
old. It was the worlds largest operator of Boeing 747-400 Mega tops, a specious aircraft
capable of long distance flights. The major difference between SIA and other airline was the
fleet age was that most of the airlines average fleet age was 14 years plus whereas SIAs one
was a little over five years. SIA was able to maintain such short average fleet age and it was a
big accomplishment and the company took this issue very seriously. Just for the aircrafts, SIA
maintained an office in Seattle, Washington in order to be near to the Boeing designers and
oversee the developments of the new additions to the SIA fleet. The advantages with newer
aircrafts were that, the aircrafts were more fuel efficient. Besides less maintenance were
required than the ones that were old. The SIA Acquired fleet of aircrafts through two ways:
By leasing and by purchasing it outright. This was done primarily during economic lulls to
acquire more new fleets, thus taking out the maximum value for its investment.






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The Significance of Fleet Selection:

SIAs Fleet selection reflected their outstanding ability to satisfy their potential customers.
They emphasized on fleet selection because the company believed that this indicated the fact
that they as an airline would provide top of the line technology, comfortable seating and a
safe trip. All of these were considered as an important feature as far as differentiation strategy
was considered. It has probably concentrated the most on the customer satisfaction as far as
the airlines were considered. The SIA always designed the interior of their aircrafts that for
all the times included the latest amenities. As we know the SIA has been one of the very first
airlines to offer personal video screen in every seat, including the economy class. The in-
flight entertainment The Kris World that it offered, delivered 22 video channels, 12 audio
stereo channels and nine Nintendo game channels at every seat, with a Dolby surround-sound
system and it was specially designed by the SIA. The First Class Cabin became a benchmark
for the industry. They had four variations in the First class and they were truly something to
look at. The first-class consisted of arm-chair seats types that converted into comfortable beds
with switches. It used the most sophisticated and expensive type of seat covers. It used
Connolly leathers for the seat covers. The seats had built-in communication devices and
inflatable air mattress. On long trips the bed linens in the first-class were changed by the
cabin-crew. It truly showed how much the SIA gave importance to customer satisfaction. All
the service wares were designed by the famous French Fashion house Givenchy. The SIA
wanted to make all its passengers feel special. Starting from the first class to the economy
class.


The Drive to be Number One in Providing Service:

SIA always was ahead in the race as far as providing services were concerned.19 years ago,
SIA introduced in-flight telephone using the advanced communications technology. SIA was
the first to introduce Dolby surround sound and personal video screens in coach. The SIA
was also started the fax services in the air. Discussions were on the way to upgrade the
communications package to allow Internet access on flight. The SIA also introduced an
entertainment system called the WISEMEN. It was available for the first class and the
business class. The specialty of this entertainment system was that it functioned like a
personal home theatre and featured a range of movies and other entertainment options that
passengers individually could choose and control.


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The Human Resource of SIA:

The SIA always respected its employees and considered them to be the most important asset
for the company. As without them there nothing would have been possible. It was for the
services provided by the employees that the company was in such an enviable position in the
industry. The SIA offered top-of-the-line services and the company was known for the
splendid services they provided. SIA turned its human assets into a remarkable source of
competitive advantage through a brilliant combination of organizational culture, training and
rituals. The main source of employees was Singapore and Malaysia. In 2003, the SIA
employed around 14000 employees worldwide. It was the highest number of recruitment by
any private organizations in Singapore. The SIA also started a Training Centre in Singapore.
Its main objective was to train the cabin crew, commercial staff, and flight crew and flight
operations personnel of SIA.

The Making of A SIA Employee:

SIA followed a synchronized recruitment and training policy which enabled them to have a
group of exceptional talents. The employees who were employed usually had to complete a
cadetship program which was like an internship program and functional experts in areas such
as computer services and finance had to go through specialist programs. The cadetship that
was offered by SIA was an on the job extensive training program. The employees had to go
through various functions in the program and this way they moved up the hierarchy. SIA was
very particular about the training and development of the employees. They would spend
almost 14 times more per employee on a Singapore average scale. The employees went
through extensive training. The company had proven controls and mentoring guidelines
which were suppose to help the employees develop their potentials in order to add more value
to the organization and help the company have more success. The employees as a result
developed a greater sense of commitment for the company. In due course, they also nurtured
a strong sense of identity and belonging and were very proud to be a part of the organization.





13
The Dissatisfaction of Employees:

In the beginning when the company announced and discussed the financial conditions of the
company and about taking initiatives like cutting down the operating cost, the employees
were very cooperative with the authority; they agreed upon the wage-cut decision in a
friendly manner and were very understanding. They believed that they were a part of the
organization and in such economic downtimes; it was a way of showing their commitment to
the organization. The incident of cut-offs during the 2002-2003 session brought a change in
the employees judgment. They started to recognize the whole situation and felt vulnerable.
Many employees who, previously have cooperated and understood the situation were publicly
expressing their concern regarding the wage-cuts and lay-offs. They viewed the whole event
as self serving, since although they gave reasons of financial crisis due to SARS attack and
middle crisis, even when the situation was under control, the organization did not take any
steps. It was difficult for the employees to trust the company. They were always worried
about their jobs, since it was the very first time that SIA has had a large number of lay-offs
and the employees suspected that their job is at risk too.

The Origin of the Specialized Employees:

The employees were recruited from worldwide. The pilots recruited, came from over fifty
countries. They were drawn to the SIA mainly because of attraction of flying the latest
equipment under professional working conditions. For this very reason they did not mind
working at a very generous level of compensation. It was very apparent as SIA gave a lot of
importance to the latest equipments and having a superb quality working conditions. The SIA
had its own flying college with facilities in Australia which focused on improving the training
efficiency and producing qualified pilots. The SIA also made this college a base for the
learning Singaporean pilots in order to meet the demands. The SIA also had a high-tech
flying facility in Singapore which had eight flight simulators to taint he pilots. All the
employees were required to go through the mandatory biennial proficiency checks. The
company believed the reason they were able to achieve the high levels of safety was because
the training centers were quite well-administered. After the training some of the pilots joined
SIA. The companys half of the pilots were expatriates. The expatriates were generally paid
more then the Singaporean pilots. As the compensation for the expatriates included variety of
expenses such as housing, travel etc.


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The Recruitment Process of the Cabin Crew:

SIA believed that the cabin crew acted as the brand ambassadors for the company. So they
had to reflect the high standards of service excellence that its passengers expected. For this
reason the complement of the cabin crew was chosen through a very rigorous selection
process. The cabin crews were hired from the south, south-east Asia region but most of them
were from Singapore. The SIAs main pool for recruitment was Singapore but this was
constrained by the shortage of labor available in Singapore market. Hiring employees from
Singapore had a lot of advantages including the fact that the fellow people were paid less than
the foreign employees. Since SIA had been one of the airlines with lower labor costs among
leading carriers, they had to have more recruitment from its own country. Failing to do so
would directly affect its operating costs as then they had to go for hiring expatriates. This fact
would also contradict with their historic branding approach, The Singaporean Girl if they
had to fit in cabin crew from other countries.
This factor was crucial as when SIA started off; it had to compete with other established
carriers. In order to differentiate itself from the rest, the company launched the Singaporean
girl as the embodiment of caring, comfortable, hospitable service. This paid off immensely as
all this Oriental mystique was then a big attraction for the western world.





15
The Image of the Singaporean Girl:

Since the Singaporean girl image was a part of their business strategy, they nurtured it very
carefully. They wanted their cabin crew to be perfect. That is why; it started off with a
rigorous selection process and ended with an extensive training. They trained them on areas
such as passenger handling, social etiquette and grooming. The SIA programs were long and
more extensive than the other carriers programs. The programs also included some
nontraditional aspects, for instance, the company went as far as making the trainees stay at
homes of the aged to gain a better knowledge on the special needs of this fast growing
passenger segment. The cabin crew adopted service-oriented behavior and followed the rules
strictly. These training programs were repeated periodically so that the crew could get
acquainted with new cabin management technologies and service standards every time they
were altered. Once they were in the fold of the organization, they learned to help each other
in order to provide the best services for the organization. For the betterment of the employees
and to become accustomed to their job, toward the end various practices such as detailed
performance reviews and feedback at all levels, career counseling and performance based
reward system were designed.
The SIA took advantage of the local labor laws and practices while recruiting cabin crew.
The male staff was hired as regular employees. However, the female employees worked on a
five year contract basis, which was renewed at best for five years. The female employees
were 60% of the total number of employees.





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Rejection of Partnership with Virgin:

Virgin was an innovative and modern company. The founder and CEO of Virgin, Sir Richard
Branson, had designed his company with an aggressive style of management. He was a bit
publicity seeker so he used to revel in periodically taking controversial public positions. For
example, when British Airways decided to retire its fleet of the supersonic Concorde jetliners,
Mr. Branson offered to pay 1 in exchange for the fleet, believing it was a fair price for
British Airways, which had been almost given the fleet for free by the British government.
After the partial purchase Branson decided to move to a new company in the Australasia
market named Virgin Blue, a company which deals with low cost services. He offered SIA to
participate in the venture of Virgin Blue, but SIA rejected the offer thought of that they had
established the market with its partial ownership with Air New Zealand. SIA took the wrong
step because when the Air New Zealand failed, they had no alternative to capitalize on
growth of the region. And surprisingly Virgin Blue was turned up with high returns in that
region. So, some believed that the swashbuckling management style of Virgin was different
from the traditional conservative style of SIA. When the Company was subjected to loss from
the adversity of the post-9/11 era, its alliance partner virgin was also going through with the
same problems that they required injection of capital. The partners had to plough in more
funds at a particularly difficult time. It remained to be seen how well the partnership would
be able to weather the sequential shocks that plagued global aviation.




17
Introducing a New Carrier in Singapore:

A group of investors in Singapore had built up a reasonable amount of money to introduce a
low cost carrier called Value Air which would be operated from Singapore. Deputy Chairman
Mr. Lim Chin Beng, the innovator of SIA had promised to give challenge in the near future.

Virgin Blue, the developed alternative of Virgin Airways had captured 30% of the domestic
Australian market within three years. For the aggressive move to dominant the market, Virgin
Blue, had control over in airports such as Sydney. Virgin Blue and Qantas eliminated the
possibility of another carrier the national flag carrier, built rivalry air service networks in that
country. Virgin Blue was also contemplating service offerings from Australia to New
Zealand and Fiji. In the very short period Virgin Blue was active in Australia and weakens
the network carrier competitors to demonstrate that how vulnerable they were to low cost
competition. Qantas was at the receiving end of this onslaught in Australia and came up
losing a significant amount of its market share. It was clear that SIA could not wish away the
imminent threat.


SIA in the Future:

Mr. Chew Choong Seng had faced challenges in competitive issues in front of him. How
should SIA be distinctive from the copycats who copy and made a great job in terms of cabin
service and amenities? What tactics could SIA do from which it separate itself from the
copycats? The amount of people who gave their best to built up SIA at the top most level,
they were now disgruntled after the salary cut offs and stuff cuts, SIA started to motivate
those people to help again to reach SIA up again like its past days. It was the time to face and
conclude the threat of low cost competition before it became a larger phenomenon. How
should the emergence of low-cost carriers be addressed? SIA is at the cross roads in its
history and the next few strategic moves would determine the rise of the best Asian Airline to
become a global player commanding the respect of the worlds largest carriers. SIA needed to
compete with the low cost competitors and its the time to pass away from their distinctive
premium approaches to rise again in this newly competitive airline business.




18









19






Being the one of the most foremost & leading top airliner in the international industry , SIA is
facing challenges from redefining strategically complication to outgrowing competition to
low cost carriers like virgin blue and air Asia coming up to the continent. Also facing
problem with the fleet accusation and management. Air New Zealands and the deal with the
virgin Atlantic also needed to be managed as it put Singapore International Airline into a
delicate position. Their significant feature were also being copied by the competitors and
fallout from SARS and Iraq war they were turmoil with extreme employee problem on
human capital side. Lay off salary cuts and cutting down operation cost are also among them
to be exact. In this moment of crisis the next few strategic movements will be the future line
for SIA.



20








21


What strategy Singapore international Airline Services should follow in front of the
confrontation of continuing differentiate itself from the copycats who seemed to be doing a
very creditable job at imitating SIA amenities, retain back the very people who had been
instrumental in helping SIA into leading airliners, becoming once again the global player in
this time of crisis?













22




SWOT analysis is a simple framework for generating strategic alternatives from a situation
analysis. It is applicable to either the corporate level or the business unit level and frequently
appears in marketing plans. Such an analysis of the strategic environment is referred to as a


23
SWOT analysis. As the internal and external environment is an important part of the strategic
planning process. Environmental factors internal to the firm usually can be classified as
strengths or weaknesses, and those external to the firm can be classified as opportunities or
threats. The SWOT analysis provides information that is helpful in matching the firm's
resources and capabilities to the competitive environment in which it operates. As such, it is
instrumental in strategy formulation and selection. The following diagram shows how a
SWOT analysis fits into an environmental scan.

Strengths
Refer to a firm's strengths are its
resources and capabilities that can be
used as a basis for developing a
competitive advantage in the
marketplace.
Weaknesses
Are the absences of certain strengths
that may hinder organization to run
successfully.
Opportunities
Refer that the external environmental
analysis may reveal certain new
opportunities for profit and growth.
Threats
Refer as changes in the external environmental that is uncontrollable also may present threats
to the firm.






24
:

Differentiation is the strategy of differentiating the firms product or services with
others. It means that the product and the service that you provide is unique and not
easy to duplicate.

SIA has established an outstanding standard on inventing and implementing new strategies in
airlines industry. It always keeps herself up-to date in the industry and introduced diverse
types of strategies, which had helped to dominate in the market for a long time. Innovation on
different sectors within airline industry has given them supremacy over other airlines as the
rest of them could not bring such a new thing simultaneously.


Obviously, diversity is a mandatory criterion in any service industry. Different strategies of
SIA that have introduced the airline customers with new era of comfort and luxury, had lead
them superior in the market. So building and implementing tactics seems a key success factor
for SIA.






25
Airlines with routes all over the world, can reach any country they want. This is surely
an advantage for any company.

SIA, due to increase its profit have reached to almost all major cities of the world. Within
2003 they covered 90 destinations in more than 40 countries in Asia, Europe, North America,
Middle East, the Southwest pacific and Africa as well. This vast expansion ensures their sky
superiority as well as their customers appetite.


Its quite impossible to make airline business profitable without expanding new routes. SIA
has realized it and take the advantages of its massive fleets. It has reached to all major
attractive cities of the world. So no matter whether it is a business trip or leisure trip
Singapore airline is ready to serve its customers needs. Long routes means more flight,
which at the end of the day will bring more profit and enhance customer satisfaction.








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High safety standard is achieved when the company does everything to protect the
customers from any harm from their product or services.

SIA has a prolonged history of keeping best safety standard. A top-notch airline needs to
regularly update and maintain its aircrafts. SIAs aircrafts are almost very modern and got
state or art technology on board. They go under safety check regularly. Moreover, SIA does
not keep older aircraft. Most of the aircrafts are a little over five years old, which is quite
unimaginable for most of the airlines.

Safety is a very vital factor upon which an airlines success depends mostly. Due to lack of a
good safety record a significant number of airlines that have invested a lot even failed to
attract considerable amount of customers. Whereas, SIA has got awards for its safety records
which naturally influenced travelers both short and long haul travelers to choose SIA. The
major thing is SIA have achieved the confidence of customers by its safety records.





High quality food means no compromise with the quality and the hygiene of the food
that the firm provide.


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Singapore airlines catering service is one of the best in the world which is included in their
terminal service knows as SATS (The Singapore Airlines Terminal Service). Its airport
known as Changi International Airport produce the meals of 45,000 people for each single
day. They serve foods for different world-renowned airlines like British Airways, Qantas, and
Lufthansa, Japan airlines and obviously for SIA.

In-flight catering is definitely a vital point for airline industry. Many other competitors of
SIA have left behind because of poor catering facility. It is well known fact that in long haul
flight customers will look for good and hygienic food, which they consider as a part of
comfort and luxury as well. So, to satisfy customers it is a must to prepare top class menus.
So adding a world class catering service on board has given SIA supremacy over other
competitors.




Airport terminal is where people can wait and process their baggage to get on the plane.

One of the biggest facilities for SIA is its terminal services like people handling efficiency
and cleanliness. No other airlines can claim that they can deliver baggage like SIA It has been
awarded for several times due to its cleanliness and ground operational procedures.
Most of the harassment occurs during baggage collection after arriving in the airport. Even
some renowned airliner cannot guarantee hassle free baggage collection for their passenger.
But SIA can offer them this unique service, which is a definite advantage for them.


High technical and engineering capability means to have skills to maintain, repair and
produce the products in the most effective and efficient way.



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Technical facilities are always very crucial factor for any airlines in todays competitive
airline industry. SIA has its own engineering company which is a subsidiary. This company
provides aircraft maintenance and engine overhauling services. It also tests the status of the
aircraft engines and many other services, which includes fueling as well. Not only for
Singapore airlines but also for many other airliners they are offering services.


Undoubtedly, technical superiority brings enormous advantages for Singapore airlines. They
are technically self-dependent whereas other airlines have to spend a significant amount of
money each and every month for routine maintenance and checkup procedures. Singapore
airlines technical department has strong tie up with reputable companies like Rolls Royce,
Pratt & Whitney and others. Working jointly with these worlds renowned companies ensure
technical supremacy and safety of Singapore airlines over its competitors.







Traditionally people go to airport to buy
tickets, but SIA provides the customer with


29
online booking system. They can go online, pay and confirm their seat in the plane.

Singapore airline has introduced the system of online booking for the customers. So, now a
days passengers need not to go to the travel agencies or anywhere else for ticket booking.
They can do it now from home just by clicking on their mouse. This kind of system has made
life more easy and dynamic. Moreover, Singapore airline has the option to bypass the queue
of passengers. They dont need to stand for reporting as they can do the necessary tasks
through online.

Customers always want to save their time and energy. Online ticket booking system and
automated check-in-systems have now helping them to reduce their travel time. They dont
need to come earlier at the airport for checking. Definitely this is a very attractive facility for
any passenger. Due to this opportunity many of the travelers blindly select SIA for any short
or long distance traveling.




Large planes are those with more seats and spaces inside the plane.

SIA has got a large fleet of diverse kind of aircrafts, which includes Boeing 747-400, which
is just more than five years old. In 2003 they had 97 aircrafts, which were capable of carrying
considerable amount of passengers for long-haul flight. SIA is the first airline that has
ordered for super jumbo jet produced by Airbus that has got double deck.

Singapore airline is providing this opportunity to the travelers, which is obviously a big
advantage for them and can attract the passengers easily.





30
On board services are offered inside the plane while travelling. When you travel in a
plane, you expect a great service from the airline company.

SIA provides some unique facilities for the passengers on-board. They are the first airline in
the world that have installed video screen on the back of each seat no matters whether it is
business class or economy class. They show many video channels, have larger amount of
stereo channels and even game channels. The leather seats they use are of top quality, which
are being used for Ferrari, Jaguar as well. Other necessary equipments are imported from top
class companies like Clad in Connolly, French fashion house, Givenchy etc.


Passengers like to pass a nice and comfortable time during their travel period. SIA has got all
necessary equipments to fulfill their needs. This usually gives supremacy over other airlines
that offer cheap flights with less quality of products on-board. People who like comfort and
luxury, certainly SIA is the top most choice for them both for short and long haul flight.








31
Pilot is the one who control and land the plane. It is the most important factor for any
airline company to have qualified pilots.

For any reputable airlines its pilot is one of the most vital factors upon whom the reputation
of the organization depends a lot. Thats why SIA has given highest priority to its pilots
development program. They do have their own aviation college for improvement in quality of
the pilots. Moreover, SIA has their own flight simulators, which ensures world-class training
for the cadets.


Better training is the key point for safety. SIAs pilots have a significant contribution on
building reputation of the SIA. Behind that their extra-ordinary training has worked as a key
factor. Unparalleled training facilities have distinguished SIA from other airlines. Even from
other airlines pilots come to learn at Singapore airlines. The unique capability of SIAs pilot
have a good demand in aviation industry which on the long run bring benefits for SIA by
establishing them as a brand name in the aviation sector.




32


Work environment is the place where the employees work. So, it is needed to be safe
and enjoyable.

For a long period Singapore airline is one of the most exciting place for working. The
environment is truly multicultural and very dynamic. It is also a suitable place for learning a
development. The recruitment and selection process is fare and free from any kind of
biasness. They do run cadetship program, which is somewhere known as Graduate
recruitment as well.


SIA has a strong policy for talent hunting. Top quality workplace and on job training has
made them first choice among all other Singaporean companies to the young generation. So
automatically SIA is getting enormous talents on their pipeline that at the end of the day are
brining significant change both on technical and operational sides. Among the employees job
satisfaction is the biggest criteria, which determines the period of existing in any
organization. Here SIA has got the biggest success as well. Their corporate atmosphere has
been able to retain the employees. So turnover rate is very low unless it is something
worldwide crucial moment or any natural disaster occurs. This has brought enormous
strength inside of SIA, as the human beings are the main assets for any organization who are
responsible for making any organization profitable and dynamic.




33



Employees need to work effective and efficiently to have a lower operating cost.

SIA as an Asian carrier has lower operating cost compared to their American and European
counterparts. It has higher labor productivity level and lower unit labor cost. Lower operating
cost is something mandatory if any company wants to gain a higher profit and want to make
their service more customers centered. The operating cost of the company is low thats why
they got the opportunity to put all their effort to up hold their service in the flight and also in
maintaining the management of the company. Without substantial amount of low cost the
higher profit is not possible at all. So, SIA would not be able to extend its business in
different horizons with commitment of better service.

With the opportunity of lower operating cost SIA has used their resource in different sectors
of their company to get more flexibility, efficiency and thus has become the hallmark in this
industry. So, it is certainly a strength.





34


Traditional airplane does not have lounge, but SIA has given this kind of service to their
customers to make them relax during the flight.

Another beneficial important strength of SIA is their large luxurious world class lounge.
During the flight all the passengers want to relax and to enjoy the flight time in a luxurious
lounge. It can give the ultimate satisfaction to the
passengers. The Singapore Airlines understand this need
of the passengers very well. SIA offers the Silver Kris
Lounge to the First class and Raffle Class (Business
class) passengers. That lounge is one of the largest and
most luxurious airport lounges in the world. They
provide various kinds of entertainment facilities to the
passengers to make them relax during the flight time.

Due to these lounge SIA is attracting new passengers every day and thats how the business
and the profit of SIA is also increasing.




35




Government surely plays an important part for any company, because government can
make or break rules.

A big drawback for Singapore airline is it does not receive any subsidies or protection from
the Government. Unlike other airline they dont get any financial support from the
Government. They are totally private organization and they have to heavily depend over their
shareholders and upon the benefit of the business.

Many airline of the world that is national flag carrier do receive subsidiaries or some
financial protection from their Government. This helps them to survive during turbulent
period. On the other hand, SIA is getting deprived from this facility. So if anything goes
wrong they have to face terrible situation. They have to cut down their workers, have to close
down some operations; they might have to close some other routes. These all will certainly
decrease the benefit level of Singapore airlines and can jeopardize its position in the aviation
industry.




36


Pilots are one of the major key players behind the success of any airlines in aviation
industry. So its very necessary that every airline have to keep a considerable amount of
budget behind the pilots.

SIA has a diverse and multicultural workplace. A considerable amount of pilots have come
from the different countries that are not native. As they are expatriates so SIA has to bear
various types of costs behind them, which are sometimes expensive.


There is a disadvantage of having expatriate pilot in any airlines. They are often expensive
and a lot of headache is involved on managing those pilots. If they form a group and go for
the strike then obviously any airline will suffer. They will be failed to maintain their
schedule, which will certainly be a strong reason for losing business. Moreover, pilots do
demand a lot of facilities for which an airline has to spend more than other employees.
Another weakness of SIA is, as these pilots are expatriates so there is always a chance that
the pilots can leave the job anytime within a short notice. SIA needs to maintain high
standard behind pilots training, as they are committed to maintain top class all the way. These
training include flight simulator training, ground training etc which are highly expensive. So,
if any pilot moves to other airlines certainly the investment they have made will be a
complete disaster.




37



Singapore airline is committed to keep the best standard in every service sectors of its
operation.

Thats why they have to invest a lot behind different equipment, training, operation
management etc. This, at the end of the day, influence over the price of the ticket that are
being taken from the passengers. Generally the cheap airlines like EasyJet, Air Asia etc. who
have been offering low cost travel are getting advantages.

As much as the low cost airliner is arriving to the industry that much SIA has been facing
competition. Obviously SIA cant decrease its price, as it cannot compromise with its quality.
But there are significant amount of passengers who always seek for low cost travel. They
dont go for luxury. They are more interested for saving their money. But unfortunately, SIA
cant get their attention due to high price than other cheap airlines. So a large chunk of people
is always out of SIAs service. And SIA is losing business due to its price



38



Business strategy is the uniqueness of any company that gives the success to that
company. As the time passes, the competitors learn the process and copy the product or
service offered by the firm.

At the early stage of operation the services of the airline was pioneer and unique but with
time it has lost its potentiality to attract the customers. The main problem with the strategy is
that SIAs competitors can easily copy them. For that reason now the company has a very
narrow path of strategy to differentiating their service from their rivals. The competitors are
narrowing down the market of the Singapore Airlines as they are attracting the passengers by
similar sorts of services. The company is at the moment to loss its credibility in the industry.
The rivals companies are easily adopting their strategies and give a hard time SIA to change
its business strategy as soon as possible.

This frequent strategy change is coming up with lots of expenses so the profitability of the
company is being hampered. SIA was pioneer in most if the areas regarding service but now
they have lost that pride.





39


High fare is one of the great weaknesses of the company. The industry is heavily
depended on the tradition of low cost flight.

All the companies are trying to minimize their operating cost so that they can charge lower
fare and attract more customers. But Singapore Airline is totally different. Their fare of the
first class cabin is comparatively higher than other similar kind of flights. Thats why they are
losing some European passengers while the rival airlines are capitalizing on their low fare
strategy.

SIA First Class cabin is the golden standard in the industry but the main fact is that they
charge more compare to their competitors like Thai Airways, Qantas, Lufthansa, and Air
New Zealand etc. who offer similar kind of services in flight and also in the airport. Thats
why higher fare of first class cabin is a major weakness of SIA. Its pulling out the business
of the company.




40


Joining a network amounted to delegating some aspects of brand management to the
collective groups of companies as that the identity of the network would transcend the
individual identities of the members.

The loss of control over some key decisions, such as scheduling and flight frequency, could
also be a challenge in the future. It also raises questions about the limitability of the core
competences. It will be very difficult for other network carriers to rise to the levels of SIAs
hallmark service standards.

It is quite likely that the brand image that SIA had so carefully nourished could be tarnished,
especially among its loyal first class and business class passengers.





41


The Singapore Airlines has spread its wings in different skies of the world. It has its
flights operating in different regions with different association and also with other
airlines. But the company has its weakness in providing domestic flights.

SIA does not offer any domestic flights, which have narrowed their market. It had a long
association with Malaysian Airlines. When they came apart, Malaysian Airlines focused on
domestic market while SIA focused on International market. But now Malaysian Airlines is
also competing with SIA. They are targeting all the potential market of the world but they are
ignoring their own domestic market. From this domestic local market other airlines
companies are earning a significant portion of their total earning.

SIA is ignoring the local possibility if earning money while venturing in different regions at
loss. This ignorance shows the strategic inefficiency and thats why its a weakness of the
SIA.




42



Singapore Airlines is considered as worlds one of the famous airlines. SIA has limited
routes compared to the other competing airlines. More they do not have an extensive
network in the United States and also in the European region.

They are mainly concentrating in some of the certain regions of Europe and also in some of
the African regions and also in some Australian regions. But the passengers from United
States and Europe are comparatively higher than other parts of the world. So, SIA is losing
money as they have established their routes in those regions. SIA is big company with lots of
potentiality but their limited route in different regions is pulling its leg from going to the top
position in the airlines industry.

SIA is not in the position to venture in all parts due to limited routes and thats why its
weakness of the company.




43


Touch technology is a great way of gaining the competitive advantage and to facilitate
the business. But when the technology used in a limited way it becomes a shortfall.

SIA introduced automated check-in system in some certain flights, not in all flights. So there
is still difficulties regarding check-in process in others flights. Due to this problem the
fruitfulness of the automated check-in system is not fully realized. The system is used in
certain flights so in flights the passengers are still facing with great problems regarding the
check- in system. Its losing the passengers so losing the market control as well.

Though SIA was the first to introduce this system but now a day where all the airlines are
introducing it, than SIA the inventor is of that system is not using that in every flight.







44


In balancing growth potential against the ability to control the alliance, SIA acquired an
8.3% equity stake in air new Zealand to cement a long partnership with the New
Zealand carrier.

Since Air New Zealand already owned 50% of Ansett Airways, SIA would have the benefit
of the additional alliances. It was expected that these moves would strengthen SIAs position
in the Australasian market that is growing rapidly. This grand design crumbled when air new
Zealands fortunes started turning sour. The government of New Zealand injected capital to
shore up the company, but this had the negative effect of diluting SIAs ownership position.

SIA was left with a sizeable loss and had to beat a hasty retreat from this initial foray to
establish control of the key Australasian routes.






45


One of the major weaknesses of SIA is their inferior service in some flight classes. The
airline has the commitment to provide superior service in all the flight classes but its
only concentrating on the high fared class where the passengers are paying more. For
this the company is losing its costly earned reputation.

SIA has established their first class cabin service as the worlds best but their services in
Raffle class (Business) and Economic class is not up the satisfactory level. People want to
travel with SIA because of their First class service but the other class has failed to attract
passengers.

Comparing the number of passengers in those classes, the people are more willing to travel in
economic or business class. So, poor service in those classes is obviously not beneficial for
SIA. Thats why its a major weakness of the company.



46


The information that is provided in the appendix part of the case is very much crucial.
If we compare the administrative salary of SIA with other competing airlines, we would
see that the salary expense of Singapore Airlines is quite high comparatively

SIA shows a signal of inefficiency in its operational areas. Because after analyzing the
Annual Staff Cost Per Employee, it reveals that SIA has a pretty high annual staff cost
compared to their other competitors such as Malaysian Airlines, Thai Airlines, Air New
Zealand, and Korean Airlines.

This is considered as a weakness because to this high administrative salary cost the profit
margin of the company is being minimized where the competitors are earning more giving les
effort.




47



Singapore And United States Had Signed For An Open Skies Agreement:

This is a new phenomenon where two or more countries make a deal to do business together.
In this deal they come to a consensus where the skies of the each country will remain open
for each other. This is known as Open sky. Under this treaty countries who will sign will be
able to land and take off their aircrafts from any of the airport of the corresponding countries.
Open sky agreement between USA and Singapore is a massive opportunity for SIA. USA is a
vast country where millions of opportunity exists. Moreover, aviation industry is not very
dynamic there though there are still some competitors are playing vital role like Virgin, Delta
airlines and of course Southwest airlines. Now they are going to land and take-off their
aircraft in USA. They can go to any city or state in USA. There are a huge number of people
living in different states who were not served before by SIA. Now this enormous market is
going to be opened in front of SIA. The people from USA had to depend on other airlines or
some low cost airlines like Southwest previously. The outstanding service of SIA will
certainly attract the luxurious people of USA. Furthermore, SIA has lot of extra facilities,
which other existing airlines in USA dont offer generally.
So, SIA has a very good opportunity in USA market.



48



SIA Can Use the Alliance Network Which Is Yet to Serve. This is another good option
for SIA to leverage their business in aviation industry. Forming alliance is a new
phenomenon in this sector that allows any airlines to tie up with other airlines and share
their common values and work under a single alliance brand.

Building alliance is a massive task but it opens more opportunity for any individual airliner.
An individual airliner sometimes faces some difficulties with various types of problems. It
might be technical, operational, and strategic and so on. Its very tough to solve those
problems lacks lonely. Sometimes its not possible to operate flights on some routes due to
operational cost though it might have prospects as well. Financial constraints most of the time
create headache as well. Forming alliance is a good solution for it where everyone works
under same umbrella. Working under an alliance will give SIA a unique opportunity to work
with other friendly airlines and would able them to reach to other different destinations in
Europe and USA, the zones that are yet to be served by SIA. This will definitely increase the
profitability margin. SIA will be
able to reach to cover up their
loses on different zones by
forming alliances with its
friendly companies. It will
help them to share profit as well
because some people might
not travel by SIA but they may
travel through one of the
airlines of the alliance.






49

The core opportunity facing SIA was the rapid growth in air transport for both passenger and
cargo. Today the globe is a much smaller place, people can move rapidly from one continent
to another in a matter of hours and more people have the disposable income to afford this.














50




SIAs Competitors Are Duplicating Its Own Corporate Strategies

It is well known that the strategies SIA adopts are world class and
effective under any circumstances. Thats why its competitors have
started to follow him blindly. For any example, online reservation
system, introducing different cabin systems, on-board entertainment facilities all these are the
brainchild of the executives of SIA. Thus SIAs policies are getting copied in a vulnerable
way among other of its competitors.


Its very tough to run business when the competitors are copying the corporate strategies
rapidly. SIAs key business strategies are getting copied thats mean SIA cant have the
profit for which they make the decisions. Its continuously making them looser and they are
going back in the competition. If business secrecy is being leaked out then obviously
its crucial for any organization and the survival will be questionable. Other airlines now
introduced music system, multiple video channels on-board which were being introduced by
SIA the first. But as those facilities are now being available on other cheap airlines even, and
so travelers are now getting interested on SIAs competitors.



51


Low cost airlines are getting a big question mark for Singapore airlines day by day. In Europe
RyneAir and EasyJet have changed the conventional system of airline business. Other big
airlines giant like British Airways, SAS, KLM etc have been struggling against them. These
cheap airlines offer very cheap flight within Europe, which is almost one tenth of traditional
fare. These bring enormous threat for traditional airlines. The advent of Air Asia in Asia
continent and Virgin Blue in Australia brought major problems for SIA in both of the
continents.

Traveling through cheap airlines is a phenomenon among the air travelers. Now a day it takes
very few amount of money to travel from one country to another country, which was
unimaginable some days ago. These low cost airlines dont offer luxurious facilities but they
do offer the minimum amount of service. Most of the customers are delighted with it no
matter whether they are getting world-class luxurious facility or multiple entertainment
channels or not. So all other facilities that SIA is offering is not getting that much value to the
customers like before. Definitely they are losing their business to the low cost airlines.

If SIA cant bring any solution then rest of the customers will blindly select these low-cost
airlines for the coming days.
.






52



There are some potential risks on getting attached with any airline alliance though it is
beneficial for some cases. First of all, any individual airline may have poor standard on safety
record, sometimes they might have poor level on service delivery or employees
performances standard are not up to the mark. So the poor performance of one member of the
alliance may effect on the reputation on overall alliance. Secondly, some of the alliance
member may run their business in parallel with other airliners that might be rival group. It
would be very vulnerable for the alliance, as it would directly impact on the business.


SIA has a very fresh and prolonged reputation on airline industry where very few airlines of
the world can dare to reach. But due to turbulent nature of the airline industry SIA is getting
forced to tie up with other airlines. If they do this and get a partner with poor performance
then certainly who are the regular passengers of SIA will not show interest to board any of
the aircraft of the alliance. These will seriously damage the reputation of SIA. Due to the
fault of one airline the whole alliance including the SIA will suffer. Side business of its
partner with rivalry group also may jeopardize the business position of SIA as well. A large
chunk of passengers may migrate to different alliance or other member of the SIAs alliance
who are getting benefited in a different way by depriving SIA. So, both ways there are threats
for Singapore airlines if they go under alliance.






53

HUMAN RESOURCE
MANAGEMENT ISSUES




54


HR Department is very essential for any organizations objective to achieve market
proficiency through competitive advantage over the other organizations. To gain competitive
edge in the industry, human resources plays a key role in helping companies dealing with a
fast-changing competitive environment and efficient and potential employees. Analyzing and
designing work, determining human resource needs, hiring effective employees, recruiting
employees for specific position, train the hired employees for efficient working, rewarding
employees, evaluating employees performance and giving them feedback, and also creating
positive work environment all of these things are HR issues. HR is important for an
organization to maintain good quality for long period and it also explain how a company can
retain good employee by giving incentives, bonuses, reward, and great compensation to
sustain its quality service. There are some of the human resources issues of Singapore
International Airlines (SIA) are given as bellows:








55


Singapore International Airlines dont have friendly relationship with the
union.



When SARS (Severe Acute Respiratory Syndrome) broke out SIA discharged over 400
employees. In the meantime, Iraq war broke out which made the situation worse. To cut
operating cost they cut the salary of senior managers, cabin and ground stuff. The normally
friendly unions had publicly expressed concern over the layoffs and salary reductions that
followed in the wake of SARS and the Iraq war. According to the union of SIA, this decision
of SIAs management was unfair. The union felt SIA has acted as uncertain. This type of
action can effect on organization productivity and the organization may face serious
dissatisfaction from the employees which is harmful for the organization.





Union is a part of the organization so without considering it, organization cant be successful.
SIA should be more careful dealing with this kind of problem and should create a friendly
relationship with union. SIA should try to be fair to its union as they have to remember
employees are a great resource of a company.






56


Singapore International Airlines have weak human resource management
and also for the SARS and Iraq incident left a negative impact in SIA
which should be dealt with capable HRM.


Human resource management of Singapore Airline is so weak and deployed that company is
made the employee come to believe that the company is using SARS and Iraq war as a
convenient excuse to downsizing in Human resource capital. In the job cuts in 2002-2003 left
a bad taste in SIA employee during the economic crisis. This disturbing issue shouldnt be
going unrecognized or unnoticed as might not be creating a problem for now, but it can
became a problem in a later on progression with time as the situation for the company
became more critical. The company is facing more decisive than the previous and if this
misunderstanding is not properly dealt with it will backfire on the company as a vital wave in
a bad situation.



This is a serious HR related problem as this became a unfriendly situation in the company
with the widespread doubt will put a negative impact on the morale of the employee in the
further role of time. And consequently this will also put down more negative impact on the
airliners passenger service and differentiation strategy. The negative impact upon the
employees never were a better thing for the company it brings more harm than that of good
even it a company like Singapore international Airlines. And to be exact this kind of situation
is first in time to be handled by SIA. They never faced this kind of situation or a problem
before so handling all this measurement can become a major problem for them as they do not
understand enough of the problem for not knowing how to deal with these before.



57


Singapore International Airlines have too many expatriate employees in
the organization.



The cabin crew employed in Singapore International Airlines call over from many ethnicities
within the Southeast Asian region. Besides, many people from the other countries are work in
Singapore like Malaysia, Japan, Korea, India, Taiwan and Indonesia. However, the pool of
available talents within Singapore is insufficient to draw from for long. Given the fact that
SIA had some of the lowest labor costs among leading carriers, this home-based cost
advantage had proven to be a critical ingredient in the success of the company. Any fall-off in
the availability of local talent could adversely affect the operating costs, especially if it
necessitated the recruitment of expatriate personnel.



Expatriate employees are generally paid much higher compensation compared to local
people. Not only is their base pay higher than those of local employees, they have to be paid
many additional benefits like housing allowance, schooling expenses for their children, travel
expenses, etc. Compensating expatriate personnel can only add to the rising costs experienced
by Singapore International Airlines. Singapore International Airlines should focus on having
more local employees than Expatriate employees to reduce the cost of the organization.





58


Singapore International Airlines have limited number of routes.



Singapore Airlines is not offering the necessary number of domestic flights. This has
narrowed their target market as well as caused their competitors to come into Singapores
domestic market. From this domestic/local market other airlines companies are earning
profits, which should have preferably been earned by Singapore Airlines itself.





Singapore Airlines need to extend its routes to get rid of losing out some easily earned profits
since it is the national flag carrier. Considering this, it is reasonable to assume that if
Singapore Airlines broke into the domestic market with flights, it would be earning more than
others since it already has consumer trust and preference engraved in its name.










59


Singapore International Airlines is facing effects of downsizing on
customer service.



We have seen that Singapore Airlines has faced a severe episode of downsizing in June 2003.
It lay off 400 of its employees and an additional 156members of its cabin crew. Along with
this, Singapore Airlines also had to cut down 22% from its management salary and also
proposed further wage cuts from its cabin and ground staff. This undoubtedly suggests that
Singapore Airlines may not be able to uphold its standard of service due to this severe
downsizing.







Singapore Airlines is facing effects of downsizing on customer service which is an HR issue.
It is obvious that a minimum level of manpower is required to provide a certain level of
quality in an airlines service. It has been evident in the past that the services provided by
Singapore Airlines is exclusive and of a higher standard that other airlines. In a situation like
this it may mean that Singapore airlines will be under threat of losing the exclusiveness in its
services.






60


Female employees are not treated equally in Singapore International
Airlines (SIA). Gender discrimination is evident in the organization.



According Equal Employment Opportunity, every employee needs to be pay fairly. Pay
equity is one of the major concepts of Human Resource Management. The pay must be equal
between both genders. Same must happen to in terms of contracts. SIA took advantage of
local labor laws and practices in staffing cabin positions. About 60% of the cabin staff was
female and it was expected that most of them would only fly for five or ten years. But the
problem is male cabin crew members were employed as regular employees. On the
other hand female crew had to work through a system of five-year renewable contracts. Only
five such contract renewals were permitted. It shows little decimation on women.



This is a Human resource related issue as this explores that all the employees in the company
are not treated equally in a great airliner such as Singapore International airlines. This shows
that SIA clearly not providing similar opportunity to the female exists in the company. Not
providing equal amount of salary among both male and female crew though both are being on
same position but are not being giving accessed to the same amount of advantages. Singapore
Airlines must hire women crew on regular basis too. If they dont do so they should expand
the contract time to five years to at least 7 to 8 years. Not only will this bring some equity
between the two genders, it will reduce some costs of the company in the long run.


61


Singapore International Airlines dont have a specific and proper
compensation plan.



The generous expatriate pilots compensation package should be clarified among the other
local pilots. So that the differentiation wont be there and understanding that comparison
compensation is properly justified among both the parties and no discrimination is doing on
mutually base pay and benefits. The training and recruitment policy in the SIA intensive, it
indeed is global in terms of recruiting pilot from the both the local Singapore pilot who server
the country for defense purpose and became the pilots for SIA and the expatriate pilots who
are served with more generous salary with pother benefits such as housing, schooling for
children and other facilities.. This should be done fairly and with extensive care so that the
compensation package that expatriate pilots are getting wont be rigorously high as pilots get
graduated from Singapore. Unbalanced salary may become an issue in case from both the
parties. SIA should make a proper adjustment among the both parties salary into a range so
that their will not going to be any dissimilarities among expatriate and local pilots.



The compensation package for pilots with the differentiated issue played a large part in the
Human resource management as it is the core issue related in terms of retaining the most
important employees in the job. Though in a case the benefits remain close to similar in a
package of compensation and benefits given to them both but the differentiation needed to be
clear among the pilots as it might make a proper problem among them. So keeping them in
the job by providing the right terms of salary is also the very jobs of HRM.


62
































63


After analyzing the case and identifying the Human Resource issues effectively in the
previous part, it is now time for recommendation to Singapore International Airlines (SIA) to
focus on some specific areas to retain their existing employees and diversified customers, to
capture new market in new or innovative ways and also to make profit by increasing their
operational efficiency for financial viability. We already knew from the case that SIA has
already established itself as one of the worlds most admired airlines. It has a superior
strategy of differentiation but recently its trimming its operating cost by downsizing its
employees. They already started to have problem with their operational management system
otherwise downsizing wont took place. So there must be some areas that should be focused
by them to sustain in the airlines market for longer period.


By focusing on Human Resource related issues we have identified in the previous part, now
we are going to recommend some solutions that will support the efforts of quality
enhancement of customer service at Singapore International Airlines. By adopting our
suggested plans we believe that it can overcome from its operational problem and by taking
the full advantage of its facilities to earn a higher profit to operate their business successfully
and also to expand its operation throughout the world. In the following one by one, at first we
will mention what are the specific problems we have identified, what is our
recommendation to solve these current problems, and why those are essential to the
company.




64

Singapore International Airlines (SIA) is minimizing their operating cost by downsizing their
employees, and unjustified salary cuts in all management levels by using SARS and Iraq War
issue.

SIA had lain off over 400 employees and 156 cabin-crews in order to trim down its
operational cost during the time of SARS and Iraq War. Senior managements salary cuts
also averaged 22% as announced, and they were planning to implement further wage cuts.
This is one of the crucial issues, as the combined affect of this action could have a serious
negative impact on employee morale and passenger service. Employees are the heart of an
organization, so, downsizing only weakens a company. There are surely other good ways to
avoid this destructive method, and here in the following recommendation we will talk about
those ways.








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Singapore International Airlines (SIA) needs a specific and proper compensation plan, by
forming a new compensation committee which will help to design a perfect and motivated
compensation policy rather than the existed demoralizing one.

To sustain in the market with the same leading position HR department of SIA Need to
change their current compensation policy of the employees which has already started to
demoralize the employees. So HR department need to form a compensation committee to
develop a successful and bold, imaginative yet practical compensation strategy to motivate all
the employees and increase the efficiency of SIAs passenger service.


Restructure the compensation philosophy:
SIA should develop or restructure a new compensation policy which will motivate the
employees more than now. They also have to survey the whole SARS and Iraq war situation
about how much it actually harmed the performance of the company. Even if it harmed the
performance, then closing several flights in the affected area, and replacing those flights with
some new locations could be a good solution.


Form a compensation committee:
HR needs to form a compensation committee to determine the existing difference of
compensation level between the employees and the existing market policy about
compensation in same position. After that they need to decide the salary level whether it will


66
offer how much above and at than industry average to motivate the employees. They also
have to restructure the benefit programs.

For the employer perspective relationship between the compensation and employee
satisfaction is a vital element. Everyone wants to be successful by increasing the efficiency
and productivity of employees. To motivate employees perfect compensation policy is the
right tool, only monetary rewards are not sufficient. Motivation can make impossible to
possible that results through non-monetary tools. So restructuring of the compensation level
of employees is the only way to sustain in long run and keep on expanding the business
beyond the border of home country.

Moreover, sacrificing human resource for minimizing operating cost is really a destructive
philosophy for any company. SIA needs to get rid of this. Downsize or lay-of will only bring
anarchy in the management, and will demotivate the entire human resource of the company.
They can always use other methods like rationing, pay-freeze, pay-cut in their very desperate
situation.

Women employees are not treated equally with male employees in Singapore International
Airlines (SIA). So, they are violating the Equal Employment Opportunity (EEO).
The term Equal Employment Opportunity (EEO) was created by the 36th President of the
United States Lyndon B. Johnson when he signed Executive Order 11246 on September 24,
1965, created to prohibit federal contractors from discriminating against employees on the
basis of race, sex, creed, religion, color, or national origin. The Executive Order also required
contractors to implement affirmative action plans to increase the participation of minorities
and women in the workplace. Pursuant to federal regulations, affirmative action plans must


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consist of an equal opportunity policy statement, an analysis of the current work force,
identification of problem areas, the establishment of goals and timetables for increasing
employment opportunities, specific action-oriented programs to address problem areas,
support for community action programs, and the establishment of an internal audit and
reporting system.

Singapore International Airlines (SIA) is violating the Equal Employment Opportunity (EEO)
in many ways. Sixty percent of their cabin crews are female and they had to work through a
five years of renewal contract and there only five such renewable contracts are permitted. On
the other hand, male cabin crews are employed as regular employees in SIA. This clearly
shows that SIA is not providing similar opportunities to the female employees in the
company thus violating the Equal Employment Opportunity (EEO).




SIA can start recruiting their male cabin crews exactly the same way they are recruiting their
female cabin crews. Then there will be no question of discrimination or violation of Equal
Employment Opportunity (EEO). Also if all jobs are on contract, then it becomes easier for
SIA to replace or shift positions easily.
In my points of view it is always best to recruit employees on contract basis just like hiring
Cricket or Soccer Coach. Then employees will be more enthusiastic to boost their
performance up, so that the contract is renewed in future. Here in the case of SIA, our
recommendation is, all cabin staffs (regardless of their demographic characteristics) should
be hired for five years renewable contract, after that depending on their performance it should
be decided that, their contract will be renewed or not. This will greatly improve the
performance and motivation level of SIA employees, so the overall performance of SIA will
be also improved.


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Also they can practice shifting or replacing their employees from one department from
another. By doing this they will conduct a job rotation, which helps employees greatly to
learn new things, and adopt with new environment.



This is the best solution because of two reasons. First reason confirms that there is absolutely
no discrimination in the employee base. The second reason is the boosted up performance
factor by pressure and job rotation. So, definitely the combine effect of this decision will help
SIA to get success quickly.



SIA is struggling with its union as the union deemed unfriendly. Without a cooperative union
its not possible for any company to achieve success in the long run.
The union of SIA is not helping its top decision makers to decide about a particular matter.
The union is confused about many things; as a result they cant trust the higher authority
properly. So, they became very unsupportive and unfriendly. If SIA fails to recover the whole
situation it will become worst day by the, and at one point the entire company will be
collapsed.


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Establishing a friendly union can always help and guide about important aspects of an
organization. So SIA should immediately fix confusions with its union, and cooperate with
them 100%.
Establishing a happy and cooperative union might be a tricky one for SIA. But the top
management of SIA should always think about the best interest of SIA, and should be ready
to sacrifice many things for the betterment of the organization. The first thing to create a
strong but friendly union is the transparency. If both parties remains enough transparent, then
no one will have any confusions in his/her mind, so no disputes will take place. The
management of SIA has to remember that, the most crucial resource of their company is not
the billion dollar aero planes; they are the employees and workers who work day and night to
uphold Singapore International Airlines as a brand. Only then the union will trust the higher
authority, and will cooperate with them for a common goal.




This is the best solution because an organization gets success easily, if its union and top
management works together by judging each-others decision and evaluating it. Moreover, if
the top management keeps a friendly relationship with the union, then more and more
employees will be motivated to work for the company. The working environment gets better
than ever, and everyone start enjoying their work.


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Singapore International Airlines (SIA) uses a lengthy, difficult, and costly method of
recruitment, training, and development program. Which we think, is not feasible at this
moment.

Though SIA has a finely tuned recruitment program, they are not using that facility properly.
Singapore has a shortage of population so they are highly dependent on other countries for
their required talents. To fulfill their requirements they recruit around 50% of their employees
from outside world. Especially in the pilot sector expatriates costs a lot. Moreover, SIA is
spending 14 times more per employee as the average Singaporean company. So, they should
be very careful about recruiting and selecting their employees otherwise, they will be
definitely fall under financial crisis during tough economical condition.



More structured but less costly recruitment system, and training programs for new comers.
Also introducing competency management and fast track will create an added advantage on
employee performance.




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We are suggesting SIA to restructure their existing processes, like- recruitment, selection,
training and development, compensation strategy, organizational structure etc. There will be
several big changes I the organizational strategies to make this plan possible. They need to
change specifically following processes at first:

Recruitment & Selection process:



The SIA has to think and plan about their recruitment process very carefully. They should try
to recruit people from inside Singapore, because that will save a lot of money. They do can
depend on expatriates but those should be preferred who lives in adjacent countries like
Malaysia, Indonesia, Thailand, or Philippines. That will save a lot of money. Selecting and
recruiting employees from Bangladesh, India or China can also be a good option as their
expected salary is comparatively lower than other job seekers. Recruitment process should be
designed in such a way that it covers the whole country first, and also the neighboring
countries. They should avoid gender discrimination at all cost during recruitments; otherwise
they will never get good employees for their organization.



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Training & Development process:

SIAs Training and Development process of employees is also not designed properly. Its
scattered all around the globe and is very difficult to coordinate. In the given case we have
found that in Australia they are providing training to their pilots. But there is no specific plan
for training them. So they would do proper planning for train them effectively. They can
always use their training facilities to train up some Singaporean potential people who will
become an asset for their company in near future. Though Singapore is very little country, it
doesnt have much population. Then again, if SIA can successfully train-up their cadets,
those cadets will become powerful managers within a very short period of time. So in this
way employees will be trained effectively in a systematic way under an effective plant.

Competency management & Fast tracking:

For a giant like SIA a more concrete system is needed to evaluate their candidates and
employees properly. So, we recommend the competency management system, by using this
system they can evaluate their each employees/candidates characteristics and can profile
them. By this way, they will easily evaluate who is better for which type of job, and how
much time it can take to get promoted to next level. Also by using competency management
they can fast track most potential employees, who are inexperienced but with a small
guidance they can even challenge their seniors in terms of performance. These people are the
future leader of any company, so they are needed to track down at early stage, so that the
company can get enough time to prepare them for future leadership positions.


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It is the best solution because it lies in the very core of a companys system. So, by changing
or upgrading these factors, an organization can get pretty good success within a very short
period of time. The only thing required here to make these plans work is, proper planning and
implementations of company strategy.


SIA is facing great competitions from some low-cost carriers in Asia. These low cost carriers
can take away a big amount of market share from SIA.

SIA is currently facing competitions from some low cost airlines like Air Asia, and Virgin
Blue. They are planning to use Singapore as a base to conduct their operations in Asia.
Though they have a very small fleet, due to their attractive fares almost all of their flights
become full. They are offering very low price to their customers, only USD$10 for a flight
from Kuala Lumpur to Penang. Where as same flight may cost 10 times more for airlines like
SIA. So, people started to rush on those low cost airlines, and the market positioning of SIA
starts to decline.




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SIA should introduce some new low-cost flights under a new sub-brand to overtake the threat
of low-cost airlines. By doing this SIA will be able to uplift their image as a more superior
airlines than that of their new sub-brand, and will be able to remove the low cost carriers
threat completely from the region.
Since low-cost carriers are targeting some top airlines like SIA, now its time for SIA to take
a sweet revenge against them. SIA shall not lower its cost to fight back these low cost
carriers. Instead under a new sub-brand SIA it will introduce some new flights to those
destinations where the low cost carriers are targeting. As a result SIA will be completely out
of the competition, and their new sub brand will compete with those low cost carriers. Since
SIA has a vast experience in the region their new sub brand will be also doing because of this
experience. Whereas, new comer low cost carriers will struggle a lot to cope-up with the new
sub brand of SIA.



This is the best solution, because it removes the threat completely. SIA is known for its
superiority in passenger servicing. If it lowers the price then it will become almost impossible
for them to sustain in the airlines market. So, we have suggested not to lowering the ticket
cost for SIA, instead introducing some low cost flights under a different name to tackle those
unwanted competitors.




75






76



In the previous section we have identified some problems that are Singapore International
Airline currently having and also recommended some suitable solutions aligned with
organizational goals respectively for each of them. And now in this part we are going to
implement whatever plans we have discussed in the previous part. Our planning and
recommendation are of no use unless they are properly implemented and utilized to the full
extent. Without implementation planning is only wastage of time, money and labor.
Therefore, effective and timely implementation of suitable plans is essential to make them
successful.


Now in this subsequent implementation section of the case solution, we have to answer some
subsequent questions regarding the implementation process following our identified problems
along with their solutions. We will discuss elaborately in this section How we would
implement our recommended plans, Who is going to implement them, Where we would
implement them and at last but not the least By when we would implement them. After
answering all these questions following the problems one by one hopefully we will be able to
implement our plan timely and effectively.


Without a sound framework and without a healthy work environment, even the best ever
plans will fail. Therefore, an appropriate organizational environment must be in place that
will foster the effectiveness of our proposed implementation plan. We have come up with
some realistic implementation plan that will foster the company to the highest extent to
achieve the highest market share not only in the local market but also globally. All those
plans are described below one by one along with their problems and proposed solutions:
Therefore, effective and timely implementation of suitable plans is essential to make them
successful.







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Singapore International Airlines (SIA) is minimizing their operating cost by downsizing their
employees, and unjustified salary cuts in all management levels by using SARS and Iraq War
issue.




Singapore International Airlines (SIA) needs a specific and proper compensation plan, by
forming a new compensation committee which will help to design a perfect and motivated
compensation policy rather than the existed demoralizing one.



Communicate the decision: Redundancy is not the only answer
The first step to the implementation of such a sensitive and important decision requires the
consent and knowledge of the employees concerned. Employees all ranks and class
absolutely detest anything related to a decrease in their pay. What the management needs to
do is to communicate their problems and justify the cause reason for such an action. If the
employees can be convinced that in the long run these steps are going to be beneficial to them
then they will co-operate with the authority more readily.



78
It is better to implement the plan first on the top management and then after a few months on
the low paid staffs to avoid any discriminatory conflicts



The junior level staffs are always more or less defensive towards pay cut or freeze or any
such measures. They suspect the company of trying to take advantage of an economic
situation to make even larger profits at the cost of their well deserved salary. What the
company can do is, introduce this plan first on the higher level management and then
gradually move down the hierarchy. In that way the lower level managers wont feel
exploited as they can well perceive it as a company emergency situation.


Issuance of a formal letter from the HR to the union and
employees



A formal letter from HR signed by the chairman and CEO should be issued which laid out the
process. Clearly mention in this letter that the Staff can earn back the salary they've sacrificed
plus a bonus should the company achieve a 50% or better income to cost ratio taken on a
month-by-month basis. Possibility of bonus for taking a cut: People taking a 15% salary cut
could get back their salary plus 7%. 20% salary sacrifice earns a salary return plus a 17%
bonus, while a 25% cut would repay salary plus a 25% bonus and so on.

Assure the employees going through pay freeze & pay cut that their money will not be lost
forever.

Assure the employees whenever and however possible that these are temporary steps to
ensure the survival of the company in hard times. As soon as the company sees the light of
success their pay and salaries will go back to the original level. These are alternative action
plan to layoff. So in a way employees are benefiting form these measures more than anybody
else.




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Legal issues should be carefully studied to ensure lawful
execution of the plan

There might be attempt to sabotage the company the law suits and other legal actions when
such sensitive decisions are implemented. The employees become resentful and thus may
wan tot attack the company. Therefore it is absolutely necessary the at all the legal angles
relating to such steps are properly explored and studied so that these actions are lawfully
executed.


Continuous review of the plan is necessary for proper and
time updates

The HR department must be always on the toes to ensure that the plan is executed with peace
and harmony throughout the organization and it does not become a source of resentment
towards the company. Also what is necessary is to assess that if the company is truly
benefiting from all these. There are certain cost associated with pay cuts and freeze related to
employee dissatisfaction and demonization. If the company is main more benefits over cost is
something the organization must review form time to time.



Every plan should be implemented by the right person, because no plan can be successful if it
is not implemented in proper manner by the right person. Minimizing operating costs without
harming human resources through rationing, pay freeze, pay cu is a big issue which cannot be
implemented easily. Before starting the process the SIA must choose the right person for the
implementation. The CEO along with the help of the top management and the HR department
must implement this plan.





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The place where the plan would be implemented is also an important issue for the SIA. They
operate all over the world. However, uniformity is a very important consideration when it
comes to such a decision. Thus it should be implemented through out the organization so that
nobody feels that other was treated more favorably.




Time is another crucial factor in the implementation process. Implementing any plan without
proper timing has no value. So the SIA must implement the plan within a specific time. They
must target a date within which they will operate. We suggest that it is done as soon as
possible. They need it for their survival in the economic crisis the world is facing today. If it
is too late the plan might not be effective anyway.





Women employees are not treated equally with male employees in Singapore International
Airlines (SIA). So, they are violating the Equal Employment Opportunity (EEO).


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SIA can start recruiting their male cabin crews exactly the same way they are recruiting their
female cabin crews. Then there will be no question of discrimination or violation of Equal
Employment Opportunity (EEO). Also if all jobs are on contract, then it becomes easier for
SIA to replace or shift positions easily.



Removing gender discrimination from the company

SIA hires the male employees as regular employees whereas the female employees are hired
on the basis o five years contract. This is an act of sexual discrimination. On the basis of your
sex the term of your employment is made. This is an unethical practice. SIA can argue that
the fitness and outlook of the Air hostesses are important criteria on the basis of which they
should be retained. However, it can be counter argued that if any individual is indeed not fit
to provide service on the flights after say five years than she can be provided a position on the
ground or on the training arena or anywhere else. It is not only to suit the company from EEO
violation but can actually help the company in many ways. These employees of five years
experience are well known with the norms of the organization and thus can use their
experience in various other positions of work for SIA. Moreover the motivational aspect of
such a step is also incredible.




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A specific unit must be established within the HR
to oversee EEO issues

HR and EEO have a long bitter history with one another. The HR department has been on
more than one occasion been harassed by the EEOC. Thus it is mandatory on todays world
to dedicate an active unit within HR which is going to oversee and handle the EEO issues
arising in the company. Gender equality is a fundamental human right and an essential
condition for achieving effective democracy. The Constitution of the International Labor
Organization (ILO) affirms that "all human beings, irrespective of race, creed or sex, have the
right to pursue both their material well-being and their spiritual development in conditions of
freedom and dignity, of economic security and equal opportunity". Countries are increasingly
committed to the promotion of equality of opportunity and treatment for women and men in
the world of work. But governments and the social partners face difficulties in making the
principles and provisions of international instruments effective in national law and practice.
They often seek information and advice from the ILO on the different approaches taken in
different parts of the world to give practical effect to gender equality principles.


Prepare a formal guideline that includes all the rules that must be complied with and the
action that would be taken on non-compliance

Every one of personnel-related actions is affected by EEO law. To prevent such violations,
it's not enough to simply know that the law forbids discrimination. You should know the
specific kinds of discrimination to avoid in your day-to-day activities with job applicants and
staff. Job involves many different personnel functions, including hiring, training, promotion,
termination, and others. Below are examples of actions taken to fulfill EEO responsibilities:


Ensure bias-free selection processes by forming diverse selection committees, evaluating
candidates on job-related criteria, and completing and maintaining necessary records such as
the Interview Data Form.


Promote accountability for EEO by ensuring that responsibilities in this area are clearly
indicated in the applicable job descriptions of managers and supervisors who report to you.


83

Evaluate the performance of supervisory staff in implementing established EEO
responsibilities.

Educate employees by participating in relevant training and education programs on campus
and encouraging subordinate staff with EEO responsibilities to do the same.

Provide reasonable accommodations such as assistive devices, job restructuring, and site
modification for disabled staff members.

Maintain a hospitable work environment; ethnic jokes and harassment of any kind should
not be tolerated.

Review all personnel activities for potential differential impacts on different groups and
unintentional bias in such personnel actions as selection, salary increases, promotion,
reclassification, layoff, corrective action, training, and termination.

Encourage and invest in staff development, ensuring that all staff have access to
opportunities.

Make sure all staff are informed of the organization's non-discrimination policy and the
procedures for resolving discrimination complaints.


Complaint Procedures must be strongly established and
promoted


Complaint Procedures

To protect all employees and prospective employees from discriminatory situations both
informal and formal complaint procedures are available. Either or both may be used.





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Informal Complaint

Most complaints, grievances and misunderstandings can be resolved satisfactorily in an
informal conference between the employee and his or her immediate supervisor.


If, however, the employee does not wish to discuss the concern with the immediate
supervisor, the employee may talk with an EEO counselor. The role of the EEO counselor is
to serve as a bridge between employees and management and to resolve EEO problems on an
informal basis.

If a matter is not resolved through consultation with an EEO counselor, an employee may
request a conference with the supervisor of the employees immediate supervisor.


Formal Complaint

If a matter is not resolved through the informal procedure, or if the complainant does not
wish to use the informal procedure, a formal complaint may be filed.

A formal complaint must be made in writing and must give the name and address of the
complainant, state the basis of the complaint and indicate whether the alleged discrimination
was based on race, color, national origin, religion, gender, age, disability, marital or veteran
status or any other legally protected status. The complaint must be submitted within 180 days
of the conduct giving rise to the complaint. A complainant will at all times be free from
reprisal.

A complaint may be filed by an employee or by an applicant for employment who believes
that discrimination in employment has been practiced against him or her or that an
employment practice has resulted or will result in discrimination in employment against him
or her. An employee, a former employee or an applicant for employment may file a
complaint of general discrimination practices, provided that the complainant shall furnish the
names of individuals who are adversely affected by those practices.




85


Every plan should be implemented by the right person, because no plan can be successful if it
is not implemented in proper manner by the right person. Removing discriminatory practices
is a big issue which cannot be implemented easily. Before starting the process the SIA must
choose the right person for the implementation. The CEO along with the help of the HR
department must implement this plan.




The place where the plan would be implemented is also an important issue for the SIA. They
operate all over the world. However, uniformity is a very important consideration when it
comes to such a decision. Thus it should be implemented throughout the organization so that
nobody feels that other was treated more favorably.



Time is another crucial factor in the implementation process. Implementing any plan without
proper timing has no value. So the SIA must implement the plan within a specific time. They
must target a date within which they will operate. We suggest that it is done as soon as
possible. They need it for their survival and good image.





86




SIA is struggling with its union as the union deemed unfriendly. Without a cooperative union
its not possible for any company to achieve success in the long run.




Establishing a friendly union can always help and guide about important aspects of an
organization. So SIA should immediately fix confusions with its union, and cooperate with
them 100%.




There should be better communication as both sides have put in more efforts to strengthen the
relationship. It is lucky to have capable union leaders in place who can represent the ground
well and represent the ground issues. On the management side, with better understanding and
more even keel relationship, they are in a better position to discuss the more difficult issues.




87
Singapore's top leaders should be arranged to meet with the representatives from the
management and unions of SIA to help iron out differences between them.

Relations between the labor unions and the group management has been testy at times,
particularly after wage cuts, retrenchments, and early retirement affected staff morale during
and after difficult economic conditions such as the SARS outbreak in 2003. Disputes have
grown so severe that they have attracted the intervention of the government. SIA should
arrange for the top government leaders to meet with both their management and the union
leaders to settle their conflict. When a powerful mediator comes to settle a dispute both the
sides feel necessary to listen to one another, a situation that is absolutely necessary for SIA
right now.


Ensuring co-operation of both parties is necessary

Both the parties must take a step forward to ensure that the co-operation is established.
Grievances lie on both sides. However, both parties must hear each other out and try to think
being in each others shoes. The management must be accountable and answerable to the
employees for all the actions taken regarding their work and compensation. And the union
must also be ready to take some steps to try to understand that some actions by the
management may seem unfavorable to them now but it is better for them in the long run. For
all these to take place, open discussions, friendly attitude and free flow of information from
the management to the labor union is necessary. There should be better communication as
both sides have put in more efforts to strengthen the relationship. It is lucky to have capable
union leaders in place that can represent the ground well and represent the ground issues. On
the management side, with better understanding and more even keel relationship, they are in a
better position to discuss the more difficult issues.




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Regular and Proper meetings must be conducted between
the management and the labor union

Peaceful negotiations are pre requisite for a successful employee-employer relationship.
There should be better communication as both sides have put in more efforts to strengthen the
relationship. It is lucky to have capable union leaders in place who can represent the ground
well and represent the ground issues. On the management side, with better understanding and
more keel relationship, they are in a better position to discuss the more difficult issues.


Election of able union leaders must be conducted

Election of the union leaders must be conducted with utter seriousness and fairness. This is
necessary because the employees must feel that they have chosen the best representative and
the person who can best reflect their demands to the management. If the process of election is
highly politicized and employees dont favor their leader with the whole heart then with time
their grievances will rise as their demands will not be pressed to the management and the
authority. Peaceful negotiations are pre requisite for a successful employee-employer
relationship. There should be better communication as both sides have put in more efforts to
strengthen the relationship. It is lucky to have capable union leaders in place who can
represent the ground well and represent the ground issues. On the management side, with
better understanding and more keel relationship, they are in a better position to discuss the
more difficult issues.
It is lucky to have capable union leaders in place who can represent the ground well and
represent the ground issues. On the management side, with better understanding and more
keel relationship, they are in a better position to discuss the more difficult issues.







89
Representatives from both parties should be invited to
the meetings of any major decision making

It is imperative that if the management makes any major decisions regarding the job or the
compensation of the employees, the decision making [process should include a representative
form the labor union. The decision making process form the very root should reflect the
needs and the demands of all the stakeholders to ensure the most correct decision is made.
Also in the case of the labor union, instead of moving to strikes or attacking the management
with a sudden demand and abrupt pressure, it is better to move in a systematic discussion
process. Whenever they encounter a problem form the very initial stage of their discussion a
representative form the management should be involved so that both the parties can come to a
common conclusion. Peaceful negotiations are pre requisite for a successful employee-
employer relationship. There should be better communication as both sides have put in more
efforts to strengthen the relationship. It is lucky to have capable union leaders in place who
can represent the ground well and represent the ground issues. On the management side, with
better understanding and more keel relationship, they are in a better position to discuss the
more difficult issues.




Labor union relationship & policy is a part of the HR issues, thus would be implemented by
the HR department itself. For solving one of the preceding problems we have already
suggested to open a HR department where every single policy under it would be reformed so
that all the activities occur in a systematic way. We all know that for implementing any plan
into the reality the person plays the vital role for its success. No plan can be successful if it is
not implemented in proper manner by the right person. Here the HR managers must change
their approach towards the labor union and also designate supervisors for keeping eyes on the
issue to figure out whether they are proceeding well or not. So finally we can say that HR
department would implement this plan with great effectiveness.



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Place is particularly very important factor for the SIA as they operate beyond its own country
border. We strongly recommend the company to develop this strategy in Singapore at their
company main office at first as soon as possible.




Time is another crucial factor in the implementation process. Implementing any plan without
proper timing has no value. So the SIA must implement the plan within a specific time. They
must target a date within which they will operate. We suggest that it is done as soon as
possible. They need it for their survival and good image.






Singapore International Airlines (SIA) uses a lengthy, difficult, and costly method of
recruitment, training, and development program. Which we think, is not feasible at this
moment.


91



More structured but less costly recruitment system, and training programs for new comers.
Also introducing competency management and fast track will create an added advantage on
employee performance.



The competencies are developed by workers in industry to reflect the work they do within
their facility. Because it is experienced workers who develop the competencies, it ensures
they are relevant and acceptable to the workplace.

Evaluation of employee competency is based on self assessment, prior learning assessment
and a subject matter expert validation of work. Training needs identified by the competency
assessment process can be fulfilled with remedial training available at all times using the CD-
ROM based training materials, available online training, or other instructor lead seminars and
training. It addresses industry-related training as well as other workplace skills, such as
communication, computer literacy and interpersonal relations.




92
A good starting point is a survey

It's not surprising that some organizations have no idea what "makes the job" in their
business. Surveying successful, competent employees is usually the best way to analyze such
situations. Communicating those results, and comparing them with the department head's
own ideas, may give you a great starting point.


What job roles do people possess? How are these roles defined? What is common among the
roles? What skills or competencies support each role? What learning events (courses,
meetings, demonstrations, on-the-job training, etc.) support and build these competencies?
How does a new hire begin their training? This may seem daunting, but defining existing job
roles is worthwhile, and brings many insights into the company's needs for competent
performance. The data from such surveys also helps to build measurable ways to determine
when employees attain needed skills, and conversely, may identify training needs that are not
yet met.


Usually, a common set of competencies runs throughout most organizations, which comes
from the human resources department. Most HR organizations require an orientation, which
may include courses and handouts about time clocks, harassment, benefits, and other
important company-wide topics. On top of these, most organizations have sales personnel
that require both technical and sales training. And specific application roles, be they cooks,
cleaners, or airplane mechanics, will need to attain both HR-required competencies and their
own job-specific competencies. Food-service organizations, for example, may define food-
related competencies for every job role, as well as non-food competencies for hosts, servers
and maintenance/repair personnel.



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Link learning events to certification requirements

Learning events allow employees to gain competencies, and need to be defined, along with
related recertification dates. It would be useless to have job roles that did not periodically
require updating, as the business needs for these roles change. You may not want to specify
recertification dates at first, but you will later need to identify and inform employees, who
possess certain job roles, that they must meet new needs and requirements. Thinking through
these tasks requires determination of business needs, so the training department must work
with all other departments that require competent personnel, to gain insights into their
important job roles, competencies, and learning events.


A strong tool of evaluation for the trainees is required
to determine the more talented ones from the bunch

The training programmes must include series of evaluation and tests for the participants to
ensure they are learning well and are becoming thorough. The tests are not only to evaluate
the effectiveness of the training but also determine which participants are better then average,
average or below average. In this way the fast learners can be directly sent to important
positions and can be invested more on. These hardcore training programmes make the
company less vulnerable to the demand of skilled employees. The company will not have to
be always dependent on the expatriates for key organizational positions. Moreover, the skill
level of the new and current employees will shoot up.




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The better performers can be posted to lucrative
positions

Evaluation of employee competency is based on self assessment, prior learning assessment
and a subject matter expert validation of work. Training needs identified by the competency
assessment process can be fulfilled with remedial training available at all times using the CD-
ROM based training materials, available online training, or other instructor lead seminars and
training. It addresses industry-related training as well as other workplace skills, such as
communication, computer literacy and interpersonal relations. The top performers can be
offered lucrative positions in the company which makes the company less volatile to any
unfortunate shortage of skilled domestic workers.

More applicants being called from the home country and neighboring country to soothe the
cost pressure of the expatriates

If more and more applicants for these training programs are called from the home country
and neighboring countries then the cost pressure exerted due to the expatriates will soothe
down significantly. SIA is highly depended on the expatriate due to shortage of labor I the
home country and also not all the employees available have the required level of skill. This is
where the training can come into use. The potential candidates form home and neighboring
countries can be trained and molded as per the needs of the company so that SIA can reduce
its dependency on foreign employees.


Introducing fast-track and competency management system for their employees is a part of
the HR issues, thus would be implemented by the HR department itself. For solving one of
the preceding problems we have suggested to open a HR department where every single
policy under it would be reformed so that all the activities occur in a systematic way. No plan
can be successful if it is not implemented in proper manner by the right person. Here the HR
managers must change their approach towards the labor union and also designate supervisors
for keeping eyes on the issue to figure out whether they are proceeding well or not. So finally
we can say that HR department would implement this plan with great effectiveness.


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Place is particularly very important factor for the SIA as they operate beyond its own country
border. We strongly recommend the company to develop this strategy in Singapore at their
company main office at first as soon as possible.




Time is another crucial factor in the implementation process. Implementing any plan without
proper timing has no value. So the SIA must implement the plan within a specific time. They
must target a date within which they will operate. We suggest that it is done as soon as
possible. They need it for their survival and good image.





SIA is facing great competitions from some low-cost carriers in Asia. These low cost carriers
can take away a big amount of market share from SIA.




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SIA should introduce some new low-cost flights under a new sub-brand to overtake the threat
of low-cost airlines. By doing this SIA will be able to uplift their image as a more superior
airlines than that of their new sub-brand, and will be able to remove the low cost carriers
threat completely from the region.


Typical low-cost carrier should include:
a single passenger class
a single type of aero plane (commonly the Airbus A319 or Boeing 737), reducing training
and servicing costs
a minimum set of optional equipment on the aeroplane, often excluding conveniences such
as ACARS, further reducing costs of acquisition and maintenance
a simple fare scheme, such as charging one-way tickets half that of round-trips,typically
fares increase as the plane fills up, which rewards early reservations.
unreserved seating (encouraging passengers to board early and quickly)
flying to cheaper, less congested secondary airports and flying early in the morning or late
in the evening to avoid air traffic delays and take advantage of lower landing fees
fast turnaround times (allowing maximum use of aircraft)
simplified routes, emphasizing point-to-point transit instead of transfers at hubs (again
enhancing aircraft use and eliminating disruption due to delayed passengers or luggage
missing connecting flights)


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Encourage the use of direct flights. Luggage is not automatically transferred from one flight
to another, even if both flights are with the same company.
generation of ancillary revenue from a variety of activities, such as a la carte features and
commission-based products
emphasis on direct sales of tickets, especially over the Internet (avoiding fees and
commissions paid to travel agents and computer reservations systems)
employees working in multiple roles, for instance flight attendants also cleaning the aircraft
or working as gate agents (limiting personnel costs)
a disinclination to handle Special Service passengers, for instance by placing a higher age
limit on unaccompanied minors than full service carriers
Aggressive fuel hedging programs
Not every low-cost carrier implements all of the above points. For example, some try to
differentiate themselves with allocated seating, while others operate more than one aircraft
type, still others will have relatively high operating costs but lower fares.
The price policy of the low cost carriers is usually very dynamic, with discounts and tickets
in promotion. Even if the advertised price may be very low, sometimes it does not include
charges & taxes.



Cost reduction is a part of the operations issues, thus would be implemented by the operations
department itself. We all know that for implementing any plan into the reality the person
plays the vital role for its success. No plan can be successful if it is not implemented in
proper manner by the right person. It will be best implemented by the CEO as per the
authorization of the directors.



98


Place is particularly very important factor for the SIA as they operate beyond its own country
border. We strongly recommend the company to develop this strategy in Singapore at their
company main office at first as soon as possible.




Time is another crucial factor in the implementation process. Implementing any plan without
proper timing has no value. So the SIA must implement the plan within a specific time. They
must target a date within which they will operate. We suggest that it is done as soon as
possible. They need it for their survival and good image.