Singapore Airline Case

Singapore Airline Case

1. Evaluate the attractiveness of Indian airline market. Based on your evaluation, what will be your decision? Will you choose to enter India or not? Why?

Looking at the recent trends and growth in Indian aviation market, the industry has potential however there are some risks involved too. As per GAPA analysis, the industry has potential to grow from ninth largest in the world in terms of passenger traffic to third largest in the world by 2020. Factors like growing air connectivity, government initiatives, rapid rise in middle class, increasing levels of disposable income, growth in Indian tourism industry and greater integration of local businesses with global markets look promising for high growth in Indian airline market.

However, there are some risks involved too. The rise in fuel prices, heavy government regulations, over-taxation, and increase in aeronautical tariff are some challenges which domestic Indian airline market is facing.

Based on this evaluation, the market looks attractive and offers a potential growth. It would be a good decision to enter India where the market is still in growing stage and consolidation has not taken place yet.

2. Which business model (LCC of Full Service) will be more suitable for India operations?

Currently, low cost carrier segment in India offers better business opportunity than full service segment. However, for Singapore Airline which has positioned itself as a pioneer in customer services, entering into LCC would hamper its brand image. Also keeping in mind that the partnering group Tata has already Air Asia competing in LCC segment, an Ideal approach would be to enter in Full Service segment where the competition is less. Singapore Airline should position itself as a premium customer services provider in this segment.