Singapore Airlines: Customer Service Innovation
I recommend that Singapore Airlines (SIA) do launch the spacebed project
The decision should be taken because:
1. Superior customer service is how SIA differentiate itself among the competitors. To keep
“Even-rising customer expectations”, they need to fulfill their commitment and show their
devotion to customer service innovation/branding
2. SIA has already invested millions for R&D, they will lose those for nothing if they stop
3. SIA will be able to compete against BA with this project implementation and won’t lose more
customer to the competitor
4. Financial analysis shows reasonable return with alternatives taken into consideration
The factors that have impact on the final decision are as follows:
a. Financial status difficulty – background issue, can be mitigated via alternatives.
a) Ongoing cost of on-broad innovation and investment of $14 billions in new aircraft,
which led to the first bank loan in SIA history
b) Labor cost kept increasing in 1990s
b. Market uncertainty – industry environment, can be overcome via alternatives
a) 911 incident impact on general air transportation industry
b) High competitive climate with more low-price challengers
c. Spacebed decision (In response to BA’s business class new service) – cost scenario
