Evaluating the Airport Facilities Required to Meet the Operations of Premium Service Airlines - Case Study Example

RЕMIUM АIRLINЕ ОРЕRАTIОNS Name Class Unit Table of Contents Table of Contents 2 Introduction 3 Characteristics of premium airlines 3 Core business, cargo, maintenance at Singapore airlines 3 Hub and spoke network 4 Global players 5 Alliances development 5 Product differentiation 6 Services premium airline passengers expects from the airport 6 Convenient air connections 6 Lounges 7 Innovation and technology 7 Excellent customer service 8 Modern fleet 8 Wifi Access 9 Retail services 9 Business facilities 9 Conclusion 10 Digital Inforgraphic 11 References 13 Introduction Singapore Airlines is one of the world most advanced carriers. The airline which was founded in 1972 has been able to evolve from a regional airline to become one of the world’s most respected brands. The airline has the latest fleets and flies over a wide range of destinations globally in six continents. The airline is well known for their high standards in customer care (Wirtz, Jochen, and Robert, 2003 p.10-19). The airline has been a trendsetter in the industry being the first to offer free headsets, satellite inflight telephones in 1991 and a comprehensive panel of renowned chefs since 1998 among others. Singapore airlines are a member of the star alliance and its route network covers over 35 countries and 65 destinations (Aviation Knowledge, 2015). The company also operates through subsidiaries in different destinations. This report critically evaluates the airport facilities required to meet the operations of premium service airlines. Characteristics of premium airlines Core business, cargo, maintenance at Singapore airlines Singapore airlines are world largest airline based on the market capitalisation. The airline is ranked 9th based on the number of passengers carried. The airline core business is passenger transport with flights to 65 cities and 35 countries globally. Being a member of the star alliance, the airline is able to offer more destinations to the customers. Besides the airline core business which is passenger transport, Singapore airlines have cargo transportation, engineering services (maintenance) and airport terminal services. The passenger flight is the largest segment which has 91% of the operating profit. The airline offers passenger flights through its fleet as well as its subsidiary SilkAir. In addition, the airline has a 49% stake at Tiger Airways which is a budget carrier and 49% of the Virgin Atlantic. Analysing this critically shows that huge investments in passenger segment have made it the core business (Singapore Airlines, 2014). Airport terminal services are offered through the Singapore airport terminal services limited (SATS). This is the largest in-flight catering provider and is based at Singapore Changi Airport. This segment of business was able to provide 18.9% of the operating profit (Singapore Airlines, 2014). Singapore airlines cargo acts as a fully owned subsidiary of the airline. The cargo services are the third largest cargo airline globally. The cargo services have the capability to handle 8 billion ton kilometre capacity and services 18 countries. This makes the cargo handling capacity of the airline to be adequate for a premium airline. The engineering services were able to post 12.5% operating profit. This is through SIA Engineering Company which is a fully owned subsidiary. SIAEC has been providing for maintenance services and repair in Asia pacific region. The segment has the capability to serve 80 international carriers. It is important to note that SIAEC has secured a fleet management contract with virgin Australia for 7 of their Boeing -777 aircrafts (Singapore Airlines, 2014). Hub and spoke network Singapore airlines were able to take advantage of the boom in civil aviation. This led to the airline investing more in pure jet passenger aircrafts. Singapore is an originating, stopover and terminating point for airline passengers as well as cargo. Singapore airline made a strategic move and maintained a hub and spoke system which was adopted from USA. The airline also implements point to point system in selected areas which has made it possible to expand its destinations. Singapore is also a communication hub which has been used by the airline to attract customers globally. Singapore airlines use Singapore as their hub for the Asia routes. The airline works with close collaboration with the tourism board also to attract tourists. Singapore is centrally located in south East Asia which makes it possible for the airline to optimise their routes. Choosing Changi as their hub has made it possible for the airline to enjoy traffic density. Through choosing both hub-spoke and point to point network, Singapore airlines have been able to optimise fleet density and efficiency in their routes (Nitin, 2014). Global players Singapore airlines are a global player. The airline was able to advance from a regional carrier to become a global airline. The airline has the capability to serve the global market through their large fleet. The global operations for the airlines have made it possible to serve 65 cities in 35 countries globally. This is mostly in the Asia pacific region as well as Europe and North America. It is evident that the airline has been able to maintain a strong presence in the south East Asia. The airline combines short, medium and long haul flights from its hub in Singapore and point to point model (Nitin, 2014). Alliances development Singapore airlines have been a member of the star alliance member. Star alliance has over 1330 destinations in 192 countries (Singapore Airlines, 2015). This enables the customers to travels to different destinations through the alliance members. This has enabled the airline to gain coverage of a global network through interlining with the partner carriers. This has also enabled the airline to offer premium services to their customers. The airline has stake at virgin Australia group and tiger airways which allows strategic alliance (Aviation Knowledge, 2015). Product differentiation Singapore airlines are well known for the customer appeal. Among the competitors, the airline is among the lowest cost. The airline cost per available seat kilometre is low than the Asian counterparts (Heracleous, Jochen, and Nitin, 2006, p.43). The airline two points of differentiation is service and costs. These are seen as the twin elements of the airline model. The airline has been able to maintain high quality services through well planned recruitment procedures, quality training, culture, innovation which includes entertainment in all classes. To maintain low costs, the airline outsources their ticketing, payroll and other non-core services (Heracleous and Jochen, 2012, p.483). It is important to note that without service, the cost position cannot maintain customer loyalty. This would have made it hard for Singapore airline to outperform the competitors. To offer premium services, the airline have low mechanical failures, few delays, low flight cancellation (Repeatability, n.d). There is use of new aircrafts that efficient and repair ensures quality services. Customers seeking premium services prefers new airplanes. Services premium airline passengers expects from the airport Convenient air connections For the premium airline to be successful, customers must be offered convenient air connections. This makes it convenient for the passengers who wish to travel to different destinations. Singapore airlines is positioned as a premium carrier with multiple and convenient surface connections. Through use of star alliance, it becomes easy for Singapore airline to connect their customers. The airline has a strategic hub in Singapore as well as point to point network that also enhances customer connections. Thus, Singapore airlines has the capability to offer the consumer convenient air connections (Aviation Knowledge, 2015). Convenient surface connections Singapore airlines have the capability to connect their customers conveniently on the surface. This is due to fact that the airlines terminals and hubs are well connected with other transportation means. It’s thus possible for a customer to disembark the airline and connect with other forms of transport from the terminal in a convenient way. This has also been made possible through the carrier transport system and cab services from independent operators in most of the airlines. Thus Singapore airline has the capability to satisfy their customers through efficient surface connections (Aviation Knowledge, 2015). Lounges Premium airline customers prefers airline with world class lounges. This is availed by Singapore airlines where customers have access to high class facilities in the lounges. The airline ensures that their customers are well catered in the lounges which are adequately furnished. The airline ensures that the charges for the lounges are within the customers reach. This is through coming up with charges that are fair and within the industry limits. Through SilverKris lounge, it becomes easy to offer the customers a place to drink and attend business. The lounges offer world class services to their clients which enables them to enjoy premium services (Aviation Knowledge, 2015). Innovation and technology Premium airline customers are attracted to airlines which have invested in innovation and technology. Singapore airlines have been in the frontline in innovation. The airline was among the first to adopt computer technology in its operations. Use of technology can be attributed to the airline quality service which has allowed Singapore airline to become a major player in the industry. The airline has invested heavily in the engineering facilities which ensure that their airplanes are in the best condition. Customers are rarely delayed due to mechanical issues in the airline (Aviation Knowledge, 2015). Through innovation and technology, it has become possible for the airline to meet the premium airline services required. Excellent customer service Customers expect to receive excellent customer service in the airlines. Singapore airlines have been a pioneer in excellence customer service (Heracleous, Jochen and Robert, 2004, p.33-38). The airline belief in making flying enjoyable which has made it among the best inflight services in the industry. The airline was among the first to introduce free drinks and liquor, headsets among other value added services as early as 1989. The airline invested heavily in customer service and set the trend for others. The airline has a crew of 18 on 747b instead of normal 15. The airline has larger cabins with more facilities such as toilets and storage space. The airline has reclining swivel seats on their upper deck for B747. Through high class inflight service, the airline has been able to win customer loyalty (Wirtz and Robert, 2003, p.10-19). Modern fleet Singapore airlines have the latest fleet in their services. The airline has been able to be among the first in acquiring new plane models (Chong, 2012, p.112). By having the recent models of airplanes, the customers are assured of their comfort and access to modern facilities. This has been able to attract new customers and retain old customers. The airline is thus able to offer premium airline services through use of modern airplanes (Aviation Knowledge, 2015). Wifi Access Singapore airline provides the customers with free wifi access. Through airline inflight connectivity, it becomes easy for the customers to stay in touch with their friends and family. The customers can surf, tweet and send messages while on flight. Customers are able to use their phones, laptops and tablets as they would in the ground. The customers are given free access to the wireless. Through use of free wifi, customers are capable of enjoying premium services in the airport (Aviation Knowledge, 2015). Retail services The airline offers their customers shopping services at their retail outlets. Located in the three Changi terminals, customers can buy beauty products, electronics, and designer products among others. Customers who are not satisfied with the purchases at the airport are offered a 300 day chance to seek a refund. There is also a diverse range of international cuisines and dining concepts. Through the retail services customers are able to have convenience as they visit the airline. Customers can enjoy tax free shopping with less queuing. The costs of the products are low compared to major airports in Asia. This is a concept that makes the airlines to be able to offer premium services. The airline retail services enable the airline to meet the premium services needed by customers (Aviation Knowledge, 2015). Business facilities The airline offers their customers world class business facilities. The main aim is to ensure that the customers are able to conduct their business in a good environment. There are adequate spaces between each seat and customers are provided direct access to the aisle. The airline provides their customers with best experience which is in line with premium services. Customers are also given a chance to book a cook. This is a premium advance meal selection service for their customers. In the business class, customers can use inclined seats into bet to offer rest. This ensures that customers are offered comfort they deserve when utilising the premium services (Aviation Knowledge, 2015). Conclusion Singapore airlines have the capability to meet the premium services operation requirements. The airline has invested in the right infrastructure and created a strong brand image through excellent services. Critically looking at the airline facilities and services, it is evident that the airline can meet the services expected by the premium airline passengers from the airport. Digital Inforgraphic Despite the delay, Brandenburg international airport is one of the best in Europe. The high cost hub is ultramodern and has the capability to offer the customers and airlines premium services. The airport is in close proximity to berlin being just 18 kilometres south of central berlin. The airport can be used by Singapore airlines to expand their capacity and meet the needs for the premium airline passengers. The spacious design and well light spaces are appealing to the passengers as well as its proximity to amenities. The airport has been able to integrate the transport network through connecting the international and domestic flights with railroad and public transport network. This makes travelling a lot easier for the passengers. Also, all major airlines such as Lufthansa, Ryanair, and Airberlin are bundled together making air connections a lot easier. References Aviation Knowledge, “Singapore airlines,” Retrieved from (4th December 2015), http://aviationknowledge.wikidot.com/aviation:singapore-airlines Chong, Dr. "Infusing Corporate Values and Delivering Brand Promise: Singapore Airlines' Experience." (2012): 107-125. Heracleous, Loizos Th, Jochen Wirtz, and Nitin Pangarkar. Flying high in a competitive industry: cost-effective service excellence at Singapore Airlines. McGraw-Hill, 2006. Heracleous, Loizos, and Jochen Wirtz. "Strategy and Organisation at Singapore Airlines: Achieving Sustainable Advantage Through Dual Strategy." In Energy, Transport, & the Environment, pp. 479-493. Springer London, 2012. Heracleous, Loizos, Jochen Wirtz, and Robert Johnston. "Cost‐effective service excellence: lessons from Singapore Airlines." Business Strategy Review 15, no. 1 (2004): 33-38. Nitin Pangarkar, “A change of path for Singapore Airlines,” NUS, Retrieved from (4th December 2015), http://thinkbusiness.nus.edu/articles/item/260-sia-strategy Repeatability, “The dual strategy of Singapore Airlines,” Retrieved from (4th December 2015), http://www.repeatability.com/about/the-dual-strategy-of-singapore-airlines.aspx Singapore airlines, “About us: Star Alliance member airlines”, Retrieved from (4th December 2015), https://www.singaporeair.com/en_UK/about-us/psh-codeshare-psh/psh-partners/ Singapore, Airlines. "Singapore Airlines Annual Report 2013/2014." Singapore Airlines, Singapore (2014). Wirtz, Jochen, and Robert Johnston. "Singapore Airlines: what it takes to sustain service excellence-a senior management perspective." Managing Service Quality: An International Journal 13, no. 1 (2003): 10-19. Read More