2.1. Political-Legal Factors

2.1.
Political- legal factors

As pursuing to develop globally, Singapore Airlines has to consider political factors
in Singapore market and other countries as well. This consideration is seen as the
critical element for their expanding internationally strategy and decisions.
Fortunately, Singapore Airlines receives tremendous support from the Singapore
Government in terms of tax, fuel as their main shareholder is Government of
Singapore (Lacar, F. 2004). Moreover, Singapore Airlines has more advantages
than their competitors in terms of profit as the general tax for firms in Singapore
is more favorable than in other countries. For example, Delta Airlines has to be
subjected 35% corporation tax in America while British Airway as well as Japan
Airlines has to pay 30% corporation tax in England and Japan, respectively in
comparison with 20% corporation tax that Singapore Airlines pays in Singapore
(Nation Master).
Additionally, aviation government regulations must be taken into consideration
when Singapore Airlines expand their business overseas. In the past, Singapore
Airlines has withdrawn its bid for a stake in Air India as a political barrier in India.
In 2005, Singapore Airlines was very difficult to be approved by Australian
Government to invest S$12 million into the Australia market where dominant by
Qantas and United Airlines (Bandt, 2005).
In airline industry, the term airlines freedom refers to the airspace of each country
which allows for whether landing or not. The agreement of landing right is
discussed at the national level between the governments at trades meeting.
Today, skies policies are opening and continuing to be deregulated which create
more opportunities for Singapore Airlines. However, the process of reducing the
government regulations is a threat for them to maintain their business in
Singapore.
2.2. Economic factors

Economic elements which include interest rates, oil price, taxation changes,
economic growth, inflation and tariff is the most important factor affecting directly
to Airline industry. Also, the economic health of countries is influence strongly to
flight demand. Singapore Airlines has been taken advantage of economic
development in Singapore in where the more business and investment to
Singapore the bigger number of customers for them.
As targeting to serve business people, Singapore Airlines even has to concern
more about economic situation. Their financial report last year has shown the
decrease in revenue by 20.6% from 15,996.3 $billion in 2009 to 12,707.3 $billion
in 2010 as the consequence of Asian financial crisis and the recession (Singapore
Airlines, 2010). In addition, recession is seen as the main reason for decrease in
air travel. Also, it seems to be very difficult for Singapore Airlines as well as airline
firms in determining demand and costs. Moreover, Singapore Airlines has to
consider the price fluctuation such as oil price as its rising causes increasing flight
prices which might hamper Singapore Airlines’ competitive advantages in terms of
competing with budget airline firms.
By continuing consider economic factors around the world helps Singapore
Airlines has more appreciate information and right decision when they come to
other countries. For examples, as a major shareholder criticized that the deal is
unfair, Singapore Airlines was in trouble when negotiating to buy 24% stake in
China Eastern Airlines as a step of occupying Asian market.
On the other hand, the growth in Asian economics has opened more market and
created more opportunities for Singapore Airlines.
2.3. Social – cultural factors

Nowadays, along with the high travel demand, people have more choices among
airline firms when they travel or work aboard. At Singapore Airlines, as committing
to provide excellent service and safe flight, customers are expecting more and
more what they will receive in their journeys. For example, the different culture
requires the different serve such as food provided, welcome â€¦etc, that must be
considered in order to satisfy customers. Also, Singapore Airlines has to maintain
their standards to build up higher company image as “Singapore Girls” when
going business globally.
Specially, one of the most concerns for Singapore Airlines is customer’s fear of
travel due to terrorism, prestige and air accidences. In 2002, they had faced very
negative social impacts as their responsibility for the dead of 82 people and
wounds of 81 passengers after a fatal crash at Taipei International Airport.
Moreover, SARS and flu epidemic in 2009 had caused Singapore Airlines stock
index decreased by 4% and rising worries about travel overseas. Recognizing
customers’ attitudes are very important; Singapore Airlines changed all engine
motor of their aircraft A380 to retain customers after accidence occurred with the
same planes of Qantas Airlines in 2010.
To ensure their mission, they have been caring their staff in terms of social
customs by structuring their organization and providing advantage working
environment. Also, by caring people’s opinions, lifestyles as well as customers’
social norms and values, Singapore Airlines is continuously expanding their
business globally.
2.4. Technological factors
Continuing apply advanced technologies allow Singapore Airlines always is the
pioneer in Airline industry. Besides, as the rapidly growing and changing in
technology, technological factors are the critical elements requiring Singapore
Airline to develop and apply in terms of safety and service standard. Otherwise,
they will lose their competitive advantages.
In fact, Singapore Airlines was the first airline introducing the largest commercial
plane A380 in 2007. Also, they are the first and only airline applying micro system
powers in the sky which benefits customers to keep working on the air without
power up their laptops. Moreover, providing the world’s wildest first and Business
Class seats and a technologically advanced seat in Economic Class, which makes
the competitive advantage for Singapore Airlines.
Besides, in terms of service and safety, Singapore Airlines was ranked at number
one in 2008 (traveltruth.com, 2009) by rapidly improving their service systems
such as online ticketing, self-service check in at airport as well as developed their
ground services, which bring the unique experiences for customers flying with
Singapore Airlines.
2.5. Environmental factors

Airline industry has been run under pressure of saving environment by decreasing
air pollution, noise aircraft as well as reducing contribution to global warming. By
looking at these factors carefully, Singapore Airlines have maintained their
successful position in the market as well as provided their long-term benefits to
customers. Otherwise, they would have to face challenges like the air traffic crisis
in 2010 caused by volcano in Ireland.
Despite concerns about financial issues, Singapore Airlines is planning to spend
$1.5 trillion on new aircraft by 2020 and replacing cleaner and greener aircraft
A380 in order to reduce CO2 commission by 21% and committing to continue this
reduction by 50% in 2050. Moreover, by using efficient fuel, replacing old planes,
training staff, saving energy grounding resources, communicating with
partnerships and applying advanced technologies, Singapore Airlines is continuing
their successful business along with benefits for communities.

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2.1.

Political- legal factors

2.2. Economic factors

2.3. Social – cultural factors

2.5. Environmental factors

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