Singapore International Airlines

Substance COVER LETTER4 1PROSPECTS OF ECONOMY5 1. 1Global Financial Crisis5 1. 2Oil Prices5 2PROSPECT OF AIRLINE INDUSTRY5 2. 1General Trend of the Airline Industry5 2. 2Analysis of intensity of industry6 3VALUE CHAIN7 3. 1Training of Pilots/Cabin team/Ground dealing with staff7 3. 2Branding and publicity7 3. 3Reservations and Ticketing7 3. 4Ground Operations7 3. 5In-flight Services8 3. 6Aircraft Operations8 3. 7Fleet Management and maintenance8 3. 8Customers8 4SINGAPORE AIRLINE’S COMPETITIVE ADVANTAGE8 4. 1The 4 segments of SIA’s serious strategy8 5FINANCIAL STATEMENT ANALYSIS9 5. Working Performance Analysis9 5. 2Liquidity Analysis10 5. 3Solvency Analysis10 5. 4Profitability Analysis10 5. 5Stock Prices Analysis11 5. 6Comparison with Industry Average11 6SINGAPORE AIRLINES’ NON-FINANCIAL PERFORMANCE11 6. 1Learning and Growth11 6. 3 Internal Processes12 7RECOMMENDATIONS12 8APPENDIX13 9REFERENCES32 Cover Letter To: Ms Leo, CEO From: Investment Team Subject: Investm ent Report †Singapore Airlines Ltd This report contains an investigation of Singapore Airlines Ltd (SIA) with reaction to your inquiry on attractive quality of making a genuinely huge medium-to-long haul interest in the portions of SIA. Right off the bat, an examination of the possibilities of the carrier business which SIA works in would be given to build up a superior comprehension of the business condition. The present condition of economy will likewise be one of the features as it is maybe probably the greatest worry among financial specialists. Next, the company’s esteem chain and serious techniques would likewise be introduced and dissected to legitimize if SIA can continue its development in spite of various overall difficulties, for example, the budgetary emergency and high oil costs. What's more, an investigation of the company’s past fiscal reports and particularly for the year 2007/08 would be introduced to dissect the benefit and nature of profit. For an increasingly comprehensive methodology, examination of the organization and industry utilizing non-money related execution measures would likewise be utilized to address issues where monetary measures are inadequately enlightening. Examinations with the business and principle contenders will likewise be made en route to show how they charge and if the stock cost can possibly develop among hardened rivalry in the aircraft business. Ultimately, suggestions on the allure of the venture would be given on our stand dependent on our examination. 1Prospects of Economy 1. 1Global Financial Crisis The world’s economy is as of now confronting one of the most exceedingly terrible money related dangers since the time the Great Depression in 1929. Death of US banks, for example, Lehman Brothers were because of enormous corporate obligation default which made them bring about a huge impedance misfortune. This tight credit crunch caused the ruin of the worldwide financial exchange with frightful speculators pulling back their ventures. Because of the bleak viewpoint of the overall economy, confirmation was given by the G7 as they report to divulge a 5-direct arrangement toward counter the emergency and to settle the budgetary market. 1. 2Oil Prices The carrier business was definitely hit by the soaring of flight fuel costs for as far back as one year , driving numerous organizations to build air ticket costs to cover the expanded use. Consumption is quickening at a quicker rate than income; consequently this has caused numerous aircraft organizations to endure a misfortune in working benefit. In any case, container normal unrefined petroleum costs has been on a declining pattern. â€Å"Prices fell $18. 1/b or over 14% in August, declining pointedly from the record levels came to in July,† as per OPEC Monthly Oil Market Report September 2008. 2Prospect of Airline Industry 2. 1General Trend of the Airline Industry The present circumstance in the aircraft business stays grim. It is brought about by a blend of d ebilitating traveler request, especially in the First and Business Classes, and the current dubious worldwide financial viewpoint. Payload request has additionally plunged, with a 6. 5% drop sought after for Asia-Pacific transporters in July 2008. Be that as it may, SIA has had the option to envision changes and keep on breaking new grounds. The acquirement of A380 Airbus has helped SIA accomplish considerable cost investment funds. Also, change of five Airbus A340-500 airplane into an All-Business Class set-up, and continually guaranteeing that limit best matches SIA’s request , have end up being productive for SIA alone in spite of the general debilitating traveler request. 2. 2Analysis of intensity of industry Since SIA’s generally speaking productivity is to a great extent impacted by the nearness of rivalry, we have utilized Porter’s Model of Five Forces to break down the seriousness of the business. Dangers of substitutes Throughout the years, the carrier business has gotten progressively serious with section of new contenders, for example, spending aircrafts. Thusly, a few travelers are deciding to fly spending carriers for short voyaging separations. Consequently, request from clients are turning out to be moderately value versatile, compelling a few firms to bring down their costs so as to remain serious. Purchaser Bargaining Power Buyer bartering power is expanding because of the value straightforwardness worries of clients, as they can pick which aircraft to take. In any case, on the business level, haggling power is low. Provider Bargaining Power Provider haggling power in the carrier business is high as the information required (airplane, aeronautics fuel) is exceptional and there are no comparable substitutes accessible. Contention among existing players The power of rivalry among carriers has expanded generously throughout the years as firms are narrowing the hole of the administration quality and on board conveniences. This has prompted expanding accentuation in viable cost the executives for firms. Danger of Entry There are considerable hindrances to section for the business because of the high beginning fixed cost and restrictive expertise. In any case, the passage of spending carriers presents potential dangers to the current players. Numerous organizations have reacted by purchasing partakes in firms of spending carriers. 3Value Chain 3. 1Training of Pilots/Cabin group/Ground dealing with staff SIA’s places incredible accentuation in preparing by ceaselessly sending its representatives for exhaustive and thorough preparing. To introduce simply the best assistance, SIA likewise forces tough determination trial of representatives at the enlistment stage. 3. 2Branding and exposure SIA’s spending on promoting has been static over the ongoing years. As of late, TBWA supplanted Batey organization which advanced the famous Singapore Girl . SIA receives a worldwide way to deal with promoting in the global media, keeping the Singapore Girl symbol as its portrayal of top notch administration. 3. 3Reservations and Ticketing SIA’s site permits flight schedule downloads for contraptions, for example, pocket PCs and palm best and synchronizes the information when it is revised. SIA’s tagging workplaces are situated in more than 70 nations and it works 24 hour phone reservations and administration call focuses to support its clients. The utilization of interline e-tagging permits ticket data to be put away in SIA’s made sure about database and shared among carriers on the customer’s agenda. 3. 4Ground Operations SATS handles all ground activities which incorporates things/airfreight taking care of and cover administrations. Innovation, for example, Internet registration, biometric checks and downtown registration administrations are instilled to accelerate preparing time. The use of Fully Automated Seamless Travel (FAST) incorporates three procedures including aircraft registration, pre-movement security checks and migration freedom. SIA’s reliability clients likewise have the benefit of need registration and getting a charge out of restrictive offices at its parlors. 3. 5In-flight Services Its in-trip on-request theater setup has over a thousand interest choices and office programming for travelers. Likewise, SIA additionally coordinated the full size ‘space-bed’, on-board email and internet providers in its First and Business classes. 3. 6Aircraft Operations SIA flies straightforwardly to 66 goals and has as of late expanded trips to increasingly famous goals. SIA has changed its lodges to full business class seating for its SG-NY flights and will do likewise for its SG-LA Flights. . 7Fleet Management and support SIA keeps up youthful armadas of traveler and load planes. These eco-friendly planes are on the normal age of 6-7yrs. It leases 34 out of its 126 airplane on an understanding of range 4. 7-10. 5 years with choices to sub-rent. SIAEC has additionally joined Airbus’ Maintenance Training Network, giving it access to Airbus’ most recent preparing strategies. 3. 8Customers SIA’s KrisFlyer client maintenance conspire has been viable to date and it presently centers around administrations for rich and business explorers, related to the PPS club . Singapore Airline’s Competitive Advantage Through the worth chain examination with contenders, SIA has accomplished both separation and minimal effort systems in its tasks and stands apart as an innovator in the business. 4. 1The 4 segments of SIA’s serious methodology 4. 1. 1Rigorous help plan, improvement and persistent advancement SIA’s administration improvement office continually examines for and tries out new developments. It utilizes the concentrated advancement approach which includes three-advance procedures. The compelling input channel assists with guaranteeing that any helpful proposals are embraced. Workers are likewise sent on ‘spy flights’ on competitor’s planes to report their discoveries . SIA’s nonstop advancement bolsters cost viability and it moves this edge to its clients. A few models are upgrades in seat and screen size, just as in-flight benefits, which analyzes well to its rivals . 4. 1. 2Profit and cost-cutting mindset of workers SIA’s e