Singapore Airlines Continuing Service Improvement

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Singapore Airlines

Continuing Service Improvement

BY TODD JICK*[pic 19]

A Customer’s Journey

Paul Denver walked up to the Singapore Airlines Raffles Class (business class) check-in counter, pushing a baggage cart piled high with multicolored pieces of luggage. The golf clubs, scuba gear, and baby stroller lay on top. Five-year-old Tamara ran alongside. Marsha Denver was behind, slowed down by toddler Janice, who insisted on walking although she could barely stand. At the counter, the Aéroports de Paris agent in her blue uniform was speaking with a passenger, her face level with a soft-colored arrangement of exotic flowers.

The Denvers moved to the counter. “Good afternoon. Flying to Singapore?” the agent asked. In fact, their itinerary was a good deal more complicated, combining business for Paul in three Asian locations with a holiday on Bali for the family. Paul, a member of several frequent-flyer programs, had already flown Singapore Airlines and had been impressed with the quality of its service. He felt confident that the airline would solve any problems that might arise on the six-leg trip that his wife and he were undertaking with their two small children.

Singapore Airlines’ Journey

Our job is not just to fly people from A to B, but to have them enjoy the flight. We’re not in the transportation business; we’re in the service business. All airlines claim this, but the big difference is not in the objectives set out by management, or in the ads developed by the marketing department: it is in the delivery of service.

We have a high reputation for service and that means that when someone flies with us, they come with high expectations. Still, we want them to come

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*Senior Lecturer in Discipline in Business, Columbia Business School

Acknowledgements

Marie Bell and Francesca Gee provided writing assistance for this case. It is based on a case that originally appeared in Managing Change, 2nd edition, by Todd Jick and Maury Peiperl.

Copyright information

© 2007-2011 by The Trustees of Columbia University in the City of New York. This case includes minor editorial changes made to the version originally published on December 11, 2007.

This case is for teaching purposes only and does not represent an endorsement or judgment of the material included.

This case cannot be used or reproduced without explicit permission from Columbia CaseWorks. To obtain permission, please visit www.gsb.columbia.edu/caseworks, or e-mail ColumbiaCaseWorks@gsb.columbia.edu

away saying “Wow! That was something out of the ordinary” (Yap Kim Wah, SIA senior VP, Products and Services Division).1

After years of continuing success, Singapore Airlines (SIA) had established itself as the leading carrier in terms of service. Countless awards—received year after year throughout the ’80s, ’90s, and into the new millennium—testified to its preeminence. In 2004 the Condé Nast Traveler’s Readers’ Choice Awards named it the world’s “best airline” for the 16th time in 17 consecutive years. Unlike many international airlines, SIA had retained its profitability—a significant feat in the face of concerns about terrorism and the spread of the SARS virus that had both impacted air travel. Indeed, in 2004 Fortune had ranked SIA second in the airline category of its World’s Most Admired Companies survey.

But SIA could not rest on its laurels. With varying degrees of success, rival carriers were emulating its dedication to excellent service to lure and retain high-spending business travelers in an increasingly competitive market. Many emphasized the gourmet  food, vintage wines, smiling hostesses, and onboard technology that were the cornerstone of SIA’s competitive advantage. Additionally, in recent years low-cost carriers had emerged. Now that a lower-priced option was available, delivery on SIA’s service promise was even more important.

SIA saw that continuous service improvement was the only way to retain its supremacy. Its management recognized that passengers, to the extent they were still willing to pay a premium for service, expected even more for their money—especially from SIA. Moreover, service had to improve while expansion continued—industry estimates suggested a 5% to 8% annual increase in revenues with a 5% increase in net profit in the years after 2003. SIA planned to achieve its goals with a “three pillar” strategy of superior in-flight service, the most modern fleet, and outstanding ground service.

ON BOARD: “INFLIGHT SERVICE OTHER AIRLINES TALK ABOUT”

From the 1970s on, SIA had seen superior service as its only possible source of competitive advantage. “We selected the two-letter airline code SQ to remind our people that an SQ flight is not just an ordinary flight, it’s a quality flight,” explained a ground services senior manager. At the outset, SIA had no domestic network and only a small customer base among Singapore’s population of two million, few of whom could afford air travel. The Singapore government made it clear that the airline had to stand on its own feet: although it was a flag carrier, it would receive no subsidies.

According to a favorite piece of company lore, in-flight service began in 1947 on the first flight of SIA’s predecessor, Malayan Airlines, when the pilot picked up a thermos flask of ice water from under his seat and passed it around to his five passengers. A few years later, the carrier was the first to offer economy-class passengers free drinks and headsets as well as a choice of high-quality meals.

The slim, impeccably groomed flight attendant in traditional Malay costume smiled at the Denver family as they entered the aircraft and quickly glanced at their boarding cards. “Good afternoon, Mrs. Denver,” she said “Let me show you to your seats.”

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