Singapore Airlines Asset Structure

SINGAPORE AIRLINES ASSET STRUCTURE 6

SingaporeAirlines Asset Structure

Singaporeairline is an internationally recognized brand that became founded in1972. The company has become one of the leading organizations in theaviation industry, all over the globe, due to its focus on customersand advanced fleet of aircraft. The entity acts as a trendsetter inthe industry, a move that has been facilitated by the company’sengagement in innovations. For instance, the business was the firstto provide free headsets and drinks at no cost to the economy classin the 1970s (Singapore Airlines Sustainability Report). Inscheduling its flights, Singapore airline concentrates on thegeographical regions. The company plans its operations based on thefollowing areas Europe, East Asia, West Asia and Africa, America,and South West Pacific. These regions determine the schedules of thecompany. Furthermore, in scheduling its flights, the availability ofpassengers and cargo is a primary consideration. The company operatesin areas where it knows it would get clients.

Theorganization does not lease but owns equipment that it uses. Thebusiness is involved in the management of its equipment in an attemptto ensure that customers are safe, as well as avoiding experiencinghigh operating costs. In ensuring the safety of the equipment, thecompany is involved in providing inspection, repair, and modificationof its equipment (Singapore Airlines Annual Report). The strong cashposition of the business allows it to be in a position to internallyfund the purchasing of new equipment instead of relying on long-termleases that may attract a lot of interest. Thus, the organization canbuy newer and more efficient equipment that mitigate maintenancecosts.

TheSingapore airline has 102 aircraft as part of its fleet. As at 31stMarch 2016, the average age of its aircraft was seven years and fivemonths. The fleet is amid the most modern and fuel-efficient in theglobe. Alternatively, the average ages of the fleet of thesubsidiaries of the business are as follows SilkAir-4 years, Scoot-9months, Tigerair-4 years and ten months (Singapore Airlines AnnualReport). The following diagram is a depiction of the average yearsfor the fleet of Singapore airline and its subsidiaries

AverageYears for the Fleet of Singapore Airline and its SubsidiariesSource:https://www.singaporeair.com/saar5/pdf/Investor-Relations/Annual-Report/sustainabilityreport1516.pdf

Whenan airline desires to choose its route structure, it may eitherchoose hub and spoke, or point-to-point model. These two approachesare different, but a company in the aviation may opt to have bothstructures. In the case of the hub and spoke, there are fewer routesrequired in serving the network (Cento, 2009). This is due to thereasoning that the number of pairings, in a point-to-point set-up,increases at a greater rate compared to the augment in nodes. Becauseof the fewer routes to be covered, airlines are in a position toschedule more frequent flights along the different routes. Allairports can be considered as hubs since one can take another form oftransport before alighting at another hub. Alternatively, thepoint-to-point model reduces connections as well as travel time(Cento, 2009). Also, this route structure does not support theinterdependence of hubs and flights since a closed airport would notsubstantially affect the schedules of other flights. The Singaporeairline assumes hub and spoke, as well as point-to-point routestructures. As at 31stMarch 2016, the airline together with its subsidiaries covered 125destinations in 37 countries (Singapore Airlines Annual Report). Thefollowing table shows the destinations served by the company and itssubsidiaries.

DestinationsServed by Singapore Airline and its Subsidiaries

Source:https://www.singaporeair.com/saar5/pdf/Investor-Relations/Annual-Report/sustainabilityreport1516.pdf

References

Cento,A. (2009). Theairline industry: Challenges in the 21st century.(Airline industry.) Heidelberg: Physica-Verl.

SingaporeAirlines Annual Report FY2015-16. Retrieved fromhttps://www.singaporeair.com/saar5/pdf/Investor-Relations/Annual-Report/annualreport1516.pdf

SingaporeAirlines Sustainability Report FY2015-16. Retrieved fromhttps://www.singaporeair.com/saar5/pdf/Investor-Relations/Annual-Report/sustainabilityreport1516.pdf