AERO 2410 – INDIVIDUAL ASSESMENT

Nur Azlyana Bte Ismail (s) Airline Operations 16/08/2020 Table of Contents 1 INTRODUCTION........................................................................................................................................2 1.1 Full - Service Network Carrier (FSNC)..............................................................................................2 2 BACKGROUND INFORMATION..................................................................................................................3 2.1 About Singapore Airlines.................................................................................................................3 2.2 Airline Key Performance Indicators.................................................................................................4 2.3 Airline Revenue Drivers...................................................................................................................5 2.4 Airline Cost Structure......................................................................................................................6 2.5 Airline Profit....................................................................................................................................7 2.5.1 Revenue Per Available Seat Kilometer (RASK).............................................................................7 2.5.2 Cost Per Available Seat Kilometer (CASK)....................................................................................8 2.6 World Capacity Trends.....................................................................................................................9 2.6.1 Worldwide & Regional Trends.....................................................................................................9 2.6.2 World & Regional Capacity Index..............................................................................................10 2.6.3 Global Forecast of Aircraft Fleet................................................................................................11 3 CONCLUSION..........................................................................................................................................12 4 APPENDIX...............................................................................................................................................13 5 REFERENCES...........................................................................................................................................16 Page 1 of 21 Nur Azlyana Bte Ismail (s) Airline Operations 16/08/2020 INTRODUCTION The purpose of the report is to define revenue drivers, cost structures, the importance of ancillary revenues, level of annual profitability and the key performance drivers and indicators for a major FullService Network Carrier (FSNC) with worldwide and regional trends over the period . This report uses a lot of research from websites such as IATA, the airline’s websites itself, yearly financial reports and online news coverage. This report would solely focus on Singapore Airlines, a full-service network carrier that only covers international markets, which has been recognized as a world-class travel brand for its luxurious flight experiences and what made the airline stood out from its competitors. Before indulging into the report, it is important to understand the true meaning of a Full – Service Network Carrier (FSNC) and the common services a FSNC’s airline provides. Full - Service Network Carrier (FSNC) Full-service airline business model is pursued by large carriers such as United Airlines, Lufthansa, Qantas, Singapore Airlines. Competitiveness among the airline market companies have always been high though different airline companies have different strategies in order to cope with intense competition. It is important for airlines operators to have effective competitive tools to shape their strategies such that it will continue to enable them to remain having an edge over other airlines. Generally, FSNC offers common business models, one major part of it is global network connectivity that allow carriers to connect to another through alliance agreements. This is mostly valued by business travelers because with having strong alliances, it gives the ability to route passengers via alternative flights if there is a service disruption. The higher the reliability and high last-minute seat availability, the greater the value for passengers. FSNC also provide Value Added Services and Services such as having in-flight meals for both short and long-haul flights, free non-alcoholic beverages and lounges for frequent travelers. These are additional features consumers seek and are willing to pay for because it is of value for them. Page 2 of 21 Nur Azlyana Bte Ismail (s) Airline Operations 16/08/2020 BACKGROUND INFORMATION About Singapore Airlines Formed in 1972, Singapore Airlines (SIA) became the national airline of Singapore after the separation with Malayan Airways Limited (MAL) in 1970 after Malaysia announced that it would establish their own national carrier for domestic and international flights. It then began its first operations with three flights; Bound to London, to Sydney and back to Singapore whilst signing air services agreements with Australia, New Zealand, Indonesia, Malaysia, Japan, India, Taiwan, Korea and Philippines to help pave the way for future negotiations for air traffic rights. To be known as a leader in international air travel, SIA established a marketing strategy that stressed on its commitment to passenger comfort and service which led to the formation of the airline’s distinctive group of air stewardess called “Singapore Girl” that wears customdesigned sarongs which was immediately recognized for their friendly and efficient service. In addition to the marketing campaign and accommodating to the large increase in passenger traffic, SIA constantly enlarged and renew its aircrafts to ensure it has a modern fleet which results in becoming the first airline in Southeast Asia to order jumbo jets, operat