The potential of air transport demand is increasingly high and many countries have undertaken expansions or introducing new initiative and innovations to their existing airport facilities and systems to accommodate this demand as well as to compete against other airports as a regional hub. However, Changi Airport managed by Changi Aiport Group (CAG), previously part of the Civil Aviation Authority of Singapore (CAAS), has successfully established Changi Airport as the world’s most awarded airport. In 1988, just seven years after it began operation, Changi Airport overtook Amsterdam’s Schipol Airport and was voted Best Airport and has since won awards continually year on year, with more than 430 awards under its belt and is ranked as the world …show more content…
The Spatial factor refers to the level of regional development surrounding and around the airport, for example, an international trade zones, convention centres, and other facilities. Facility factors are the level of facilities and the airport’s ability to expand and increased its facilities. Demand factor refers to the level of origin-destination demand and that of transit and transfer traffic volumes for hub-and-spoke network. Service factor refers to the consistency of the level of service provided to users and types of airport operations. Lastly, managerial factor refers to the economical considerations such as airport operating cost, productivity and revenue structure (Park, …show more content…
Despite the increase in expenses, Changi airport saw an increase in overall revenue by 7.4%. This is a promising figure when compare to come major gateways. It was reported that despite the booming business in the aviation industry, the truth was that 70% of airports lose money (Newton, 2013). Moreover, in accordance to ATRS statistic, Changi airport’s productivity among the Asia Pacific is ranked 6 and stands above average by 12.6% (Oum, Choo, & Yu, 2013). The above figures shows that Changi hold a rather strong ground hold in terms of its managerial factor. Changi has been successful in introducing new initiative in increasing its revenue standing and operational cost. In addition, according to Park, Changi Airport has shown to have relatively high competitive strength level in terms of it managerial competitiveness.
The airline industry is classified into four categories by the Department of Transportation. The four categories are International, National, Regional and Cargo. The following are issues that affect the airline industry to some extent: airport capacity, routes, technology, aircraft purchase or lease costs, weather, fuel costs and labor. An estimate of up to 40% of an airline’s expenses is related to paying their employees.
The Hartsfield-Jackson Atlanta International Airport is one of the largest airports in the world and is the main hub for Delta Air Lines, one of the largest airlines in the world. This case study will examine the relationship between demand and capacity for the home hub of Delta Air Lines. Future predictions for air travel estimate enormous growth rates as high as 50% by the year 2025. Airlines, airports, and the entire air-travel infrastructure will be challenged with the task of keeping up with this level of demand as we move towards the future.
Before we discuss government intervention and its affect on an industry’s competition we must first seek to understand the five forces framework. The theory, discussed in 1979 by Micheal Porter seeks to evaluate the attractiveness of an industry. Throughout this essay I will explore the theory and then relate government action and its well-documented affects on the airline industry.
Airborne should strengthen and continually improve its services domestically, since it gives larger revenues, then strengthen its alliances internationally, so as to serve the demands of the international market. To add on its profitability, Airborne should lease out a portion of the airport facilities to other airlines, so that it could have other source of income to compensate the maintenance costs of the airport.
Airport planning, once carried out utilizing a single future forecast, failed to account for the complexity and uncertainty of the aviation industry. Today, it is widely assumed airport success can only be met through the utilization of a flexible, integrated planning approach that sees forecasts as incorrect.
Airports can be considered as important national resources of most countries in the world. The main responsibility of an airport is in transportation of people and goods and in internal and global business. They are where the nation’s aviation system connects with other modes of transportation and where state responsibility for managing and regulating air traffic operations intersects with the role of governments that own and operate most airports. However, most major airports are owned and operated by the private sectors. This is due to several reasons such as to improve efficiency and economic performance, be more competitive as well as to maximize the community’s return from the airport assets in which public enterprise found out to be less efficient in term of its production and management.
Stakeholders are those groups or individual in society that have a direct interest in the performance and activities of business. The main stakeholders are employees, shareholders, customers, suppliers, financiers and the local community. Stakeholders may not hold any formal authority over the organization, but theorists such as Professor Charles Handy believe that a firm’s best long-term interests are served by paying close attention to the needs of each of these stakeholders. The modern view is that a firm has responsibilities to all its stakeholders i.e. everyone with a legitimate interest in the company. These include shareholders, competitors, government, employees, directors, distributors, customers, sub-contractors, pressure groups and local community. Although a company’s directors owes a legal duty to the shareholders, they also have moral responsibilities to other stakeholder group’s objectives in their entirely. As a firm can’t meet all stakeholders’ objectives in their entirety, they have to compromise. A company should try to serve the needs of these groups or individuals, but whilst some needs are common, other needs conflict. By the development of this second runway, the public and stakeholders are affected in one or other way and it can be positive and negative.
Young S. & Wells, A. (2011). Airport Planning and Management (6th ed.). New York, New
Tourism is an industry, with air transport becoming an indispensable factor. One major growing trend in airline industry is market globalization. People travel to other countries for both business and leisure purposes, leading to 7% increment in air travel per year. As a market is globalized, those involved will evolve into global customers who go in search of suppliers running on global base. This leads to a growth in business travel due to the global involvement of companies in terms of investments, production chain, supply and customers. Thus, the participation of air transport in facilitating the world trade is prodigious. Aviation implements another economic benefit of the air transport by providing consumer welfare to individuals while considering the environmental brunt such as the air quality, congestion and noise in the proximity of airports. Air transport being highly demanding has doubled the passenger numbers since the 1980s and over the last decade, it has increased by 45%. The huge growth and development of the aviation field has benefitted in heaps regarding
The Singapore Airlines needs to keep its superiority and stay on top of the competition in the international market, despite the bad times associated with a global economy or strategies implemented by main competitors.
Because of the total number of airports currently operating within the United States, there needs to be a way to categorize the airports currently in use, in order to better provide funding and to understand were each one fits into the air transportation system. In an effort to better identify the growth in the overall enplanements, The National Plan of Integrated Airports Systems (NPIAS) currently groups airports as: Primary airports, Commercial Service airports, General Aviation airports and Reliever airports (Young & Wells, 2011, p. 11).
The demographic environment includes the study of human populations in terms of size, density, location and other statistical information (allbusiness, n.d.). Airlines look to airports that are situated in cities or population with high density. Airlines have the need to serve airports and markets where they can generate sustainable levels of traffic and yield (IATA, 2013). This is particularly true as the airline industry is already highly competitive and coupled with competition that drives lower fares for customers; the need to operate in an airport that revenue potential for airlines is crucial. Population density is one of the factors that affect the choice of airport for airlines. Southwest is a LCC that serves dense, short-haul markets on a point-to-point basis with frequent service (Dresner, Lin , & Wi, 1996). A strategy that LCCs can adopt when expanding is to look out for markets with high density and high GDP and tap on the latent demand of the middle class. Ryanair has been successful in seeking out markets with high density and GDP ( Ryanair, n.d.). Ryanair’s strategy is to attract the latent demand for extra flights distinctive of the middle class, which is especially concentrated in high GDP areas as they are more willing to spend money on leisure trips, while still being price conscious (Malighetti, Paleari , & Redondi, 2009). The decision to serve a market is crucial to airlines as it has fixed costs that c...
Government and SIA had invested in the Changi Airport together. It includes facilities such as hangar, maintenance center, and catering center, those facilities can be used by SIA, but also the customers of other airline company. So those services in Changi airport are not unique for SIA. Airport service is valuable and important for SIA or other airlines company. Low unique and high valuable, then it is not SCAs.
In order to get a comprehensive analysis on SIA's financial statement analysis , we compared SIA's 5 financial year ending(FYE) results with the industry's average and 2 of its main competitors Cathay Pacific Airways and Qantas Airways . Cathay has been trailing closely to SIA in terms of first class cabin service and profitability for years. Qantas has long been dominating the highly profitable Kangaroo route and is ranked 5th in the world by Skytrax's survey . Please refer to appendix for the actual figures for every analysis below.
As Sassen (40) defined, networks and circus are elementary of global cities, having a well–connected airport is thus critical for linkage of a city with the world as it allows intensive flows of information, people and products. Hong Kong has developed itself into an international aviation hub the holds leading position in both passenger and cargo terms. According to the Airports Council International (), HKIA ranked as number 10 and 1 as the world’s busiest airport by passenger and cargo traffic respectively. We should, of course, be proud of having such an outstanding airport as foundation of our economic success. However, other Asian cities have caught up in challenging Hong Kong’s leadership for their increasing passengers and cargo flows and expansion plan to increase capacity. To what extent the third runway, as suggested by the Airport Authority Hong Kong (AAHK), can help Hong Kong withstand such a fierce competition?