Singapore

Airlines Case
Analysis

Submitted by,
Group 1
Ishan Ghai
Pradosh HS
Siddharth Mehta
Sumitabh Saha
Swathikrishna Vinay

Singapore Airlines: Customer Service Innovation

Singapore Airlines is a global airline operator based in Singapore and actively servicing
routes in Europe, Asia and USA. They were one of the pioneer airline companies in the world
that changed the entire inflight experience and even customized the services depending on the
location.
In the case, post September 2001, after the terrorist attacks in USA, the company had a
dilemma on whether to install the Spacebed project. This project had an investment of a
million dollars in R&D and another $100 million in its installation in 45 aircraft carriers.
According to the team, they should proceed with the implementation of the plan.
Why they should proceed with the plan

According to exhibit 1, the revenues of the company have not fallen. It has increased
by 10.3%. The net margin has increased by 3.1% and the operational revenues have
increased by 12%.
In exhibit 2 the total revenue has also increased by from 9229.7 million dollars to
8341.3 million dollars. Their fleet has just increased by 1 from 92 to 93 which implies
that the aircraft maintenance is good and in superior conditions. The number of
passengers has also increased by a big number from 13782 to 15002 passengers. The
number of staff numbers has increased from 13720 to 14254.
According to exhibit 3 the depreciation charges has decreased to -5.6. Maintenance
costs have also decreased. This implies that the company is profitable.
According to exhibit 8 they have been ranked the highest among the other competitors
both in Asia and in the world.

In conclusion they are cash rich and can proceed with the plan. This will also create a positive
impact in their service innovation sector. They can target the international business traveller.
Many companies made losses post September 2001, however Singapore airlines can utilize
this and target the fact that the airlines that were involved in the tragedy were domestic and
not international.
If we refer the article, Creating new markets through service innovation, we can see the
matrix Type of service vs Type of benefit. Singapore airlines provide a service which is
separable and the type of benefit is based on its delivery. Hence they fall in the Flexible
solutions category of the matrix. This cell describes service innovations that offer a new core
benefit and that can be consumed apart from when and where they are produced. It focuses
on a fundamental service benefit that can be experienced separately from the service provider.
Singapore airlines did just that with their spacebed innovation. They provide their consumers
with a comfort that was provided only by British airways. However Singapore airlines also
had other benefits such as gourmet cuisine, brand loyalty and a never ending perfection
towards service delivery. This was a market creating service since the competition was just 1.
Considering the fact that all other airlines were not as profitable as that of Singapore airlines,
they can leverage on their good financial strength and implement this factor fast. Most

importantly in chapter 4 of the prescribed text, firms need to improve and develop new
services to maintain a competitive edge.
There are seven mentioned changes that can be related to the Singapore airlines:
Style changes: Their flight attendants had uniforms designed by fashion designers and they
had a rigorous training school which updated them on the latest service quality. Also they had
a customized service staff depending on the kind of country they served. This was a style
change because many airlines provided a standardized service.
Modest changes: Singapore Airlines had their own surveys to analyse where the customers
were not happy and how it can be improved. They pioneered high service quality. Every year
there was a subtle change in their customer service which made it their strength.
Supplementary service innovations: They identified their key customers and always
referred them by their name when they greeted them or served their food and drinks.
Process line extensions: They recognized that there was a shift in consumer behaviour from
standard treatment to specialized treatment.
Product line extensions: They had an entertainment system on board which provided
customers 200 channels of television and music to choose from.
Major process innovations: They provided mobile alerts to passengers in case of delay and
were undeterred of any crisis in any other country in which they operated.
Major Service innovations: They developed a new core product for their executive division
with their spacebed program. This a highly visible changes at least in Asia and the travellers
in Asia. No other airline carrier in Asia had such a seat.