Let’s talk about the Singapore Airlines (SIA) again. Yesterday, I read an article “Singapore Airlines shows off Scoot low cost brand” written by Ben Sandilands on the Crikey website (http://blogs.crikey.com.au/planetalking/2011/11/01/singapore-airlines-shows-off-scoot-low-cost-brand/). Singapore Airlines showed off the logo and livery of its new brand “Scoot” on Nov 1st. The flights of Scoot Airlines will start operating from 2012.
In the past decades, SIA’s market share has being taken by its competitors, such as Air Asia and Jet star. Those competitors offer lower price than SIA for customers. Recent economic events have caused a fundamental shift in consumer attitudes toward price and quality (Armstrong). Although SIA is a Five Star airline because of its outstanding customer service, most customers prefer lower-priced air tickets.
Responding to competitors’ price war, I think Singapore Airlines takes two effective actions. First, the company increases the perceived value of its service, and it stills offer the best service for customers. Today, the company is still one of the six “Five-Star Airline” which is the highest award for airline companies. Besides raising the perceived value for its brand “Singapore Airlines”, the company is planning to operate a “fighter brand”-“Scoot” which offers lower price air tickets for customers. In order to be different from SIA’s another “fighter brand” Tiger air ways which focuses on short haul routes, the Scoot will offer the long haul routes. In the future, North Asian or North American residents may take Scoot from their countries to Australia and New Zealand via Singapore with lower price.
I think the multibrand strategy used by SIA in order to gain market share back is good. However, multibrand strategy would be able to result in increased amount of cost for maintaining different brands. For example, SIA will have four brands including Silk Air, Tiger Airways, and Scoot next year. Each of them may get small market share, and maintenance cost may be high.
