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 seriousness of industry6 3VALUE CHAIN7 3. 1Training of Pilots/Cabin group/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 parts 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 allure of making a genuinely huge medium-to-long haul interest in the portions of SIA. Right off the bat, an investigation of the possibilities of the aircraft 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 systems would likewise be introduced and dissected to legitimize if SIA can continue its development in spite of various overall difficulties, for example, the money related emergency and high oil costs. What's more, an investigation of the company’s past budget summaries and particularly for the year 2007/08 would be introduced to break down the gainfulness and nature of income. For an increasingly all encompassing methodology, investigation of the organization and industry utilizing non-money related execution measures would likewise be utilized to address issues where budgetary measures are inadequately enlightening. Correlations with the business and fundamental contenders will likewise be made en route to show how they admission and if the stock cost can possibly develop among hardened rivalry in the carrier business. Ultimately, suggestions on the allure of the speculation would be given on our stand dependent on our examination. 1Prospects of Economy 1. 1Global Financial Crisis The world’s economy is at present confronting one of the most noticeably awful budgetary dangers since the time the Great Depression in 1929. Downfall of US banks, for example, Lehman Brothers were because of colossal corporate obligation default which made them bring about a huge debilitation misfortune. This tight credit crunch caused the defeat of the worldwide financial exchange with dreadful speculators pulling back their ventures. In light of the desolate viewpoint of the overall economy, confirmation was given by the G7 as they declare to uncover a 5-guide plan toward counter the emergency and to balance out the money related 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 expand air ticket costs to cover the expanded use. Use is quickening at a quicker rate than income; henceforth this has caused numerous carrier organizations to endure a misfortune in working benefit. Be that as it may, bin normal raw petroleum costs has been on a declining pattern. â€Å"Prices fell $18. 1/b or over 14% in August, declining strongly 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 hopeless. It is brought about by a blend of debilita ting traveler request, especially in the First and Business Classes, and the current dubious worldwide monetary viewpoint. Payload request has additionally plunged, with a 6. 5% drop sought after for Asia-Pacific bearers in July 2008. Nonetheless, SIA has had the option to envision changes and keep on breaking new grounds. The acquisition of A380 Airbus has helped SIA accomplish generous cost reserve funds. Furthermore, 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 regardless of the general debilitating traveler request. 2. 2Analysis of seriousness of industry Since SIA’s generally speaking gainfulness is to a great extent impacted by the nearness of rivalry, we have utilized Porter’s Model of Five Forces to break down the intensity of the business. Dangers of substitutes Throughout the years, the carrier business has gotten progressively serious with passage of new contenders, for example, spending aircrafts. Accordingly, a few travelers are deciding to fly spending aircrafts for short voyaging separations. Consequently, request from clients are turning out to be generally value versatile, driving 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 carrier to take. Be that as it may, on the business level, bartering power is low. Provider Bargaining Power Provider bartering power in the carrier business is high as the information required (airplane, avionics fuel) is one of a kind and there are no comparative substitutes accessible. Contention among existing players The force of rivalry among aircrafts has expanded considerably throughout the years as firms are narrowing the hole of the administration quality and on board conveniences. This has prompted expanding accentuation in powerful cost administration for firms. Danger of Entry There are generous hindrances to passage for the business because of the high introductory fixed cost and exclusive expertise. Be that as it may, the passage of spending aircrafts presents potential dangers to the current players. Numerous organizations have reacted by purchasing partakes in firms of spending aircrafts. 3Value Chain 3. 1Training of Pilots/Cabin group/Ground taking care of staff SIA’s places extraordinary accentuation in preparing by ceaselessly sending its representatives for thorough and thorough preparing. To introduce simply the best assistance, SIA likewise forces tough determination trial of workers at the enrollment stage. 3. 2Branding and exposure SIA’s spending on publicizing has been static over the ongoing years. As of late, TBWA supplanted Batey organization which promoted the famous Singapore Girl . SIA embraces a worldwide way to deal with publicizing 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 beat 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 aircrafts on the customer’s agenda. 3. 4Ground Operations SATS handles all ground tasks which incorporates stuff/airfreight taking care of and cover administrations. Innovation, for example, Internet registration, biometric checks and downtown registration administrations are imbued to accelerate preparing time. The use of Fully Automated Seamless Travel (FAST) coordinates three procedures including aircraft registration, pre-migration security checks and movement leeway. SIA’s reliability clients additionally have the benefit of need registration and getting a charge out of selective offices at its parlors. 3. 5In-flight Services Its in-trip on-request theater setup has over a thousand interest alternatives and office programming for travelers. Likewise, SIA additionally incorporated the full size ‘space-bed’, on-board email and internet providers in its First and Business classes. 3. 6Aircraft Operations SIA flies legitimately to 66 goals and has as of late expanded trips to progressively 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 upkeep SIA keeps up youthful armadas of traveler and payload 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 likewise joined Airbus’ Maintenan ce Training Network, giving it access to Airbus’ most recent preparing systems. 3. 8Customers SIA’s KrisFlyer client maintenance plot has been successful to date and it presently centers around administrations for rich and business voyagers, 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 procedures in its tasks and stands apart as an innovator in the business. 4. 1The 4 parts of SIA’s serious system 4. 1. 1Rigorous help plan, advancement and consistent advancement SIA’s administration improvement office continually looks into for and tries out new developments. It utilizes the unified development approach which includes three-advance procedures. The compelling criticism channel assists with guaranteeing that any helpful proposals are embraced. Representatives are likewise sent on ‘spy flights’ on competitor’s planes to report their discoveries . SIA’s consistent advancement underpins 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 thinks about well to its rivals . 4. 1. 2Profit and cost-cutting attitude of representatives SIA’s e