Changi Airport Strategic Management

Chapter 1 Introduction

1.1 Introduction

The commercialization and privatization of airports in combination with the regulation of the aviation market has introduced new possibilities for competition among airports. This in turn has meant that there are increased opportunities for airports to develop new strategies to gain competitive advantage.

The Changi Airport is the chosen subject for this project due to its successful strategy that is driven by its vision and mission to be among the best airport not only in the region but also in the world. The selection of this company is due to writer's personal interest to research and to experience the unique strategy and not due to the initiative of the company.

1.2 Scope of Project

This project focus is to relate the situation at Changi Airport to general competitive strategy theory. This is in order to assess whether the characteristics of the airports are so unique that necessitate Changi Airport being still treated as a special case or whether at this stage in the evolution of the airport industry, it is has become relevant to look to successful practise in other sectors outside of the airport industry when formulating competitive strategies.

This project focuses on Changi Airport's recent strategic decisions and review on the current strategies of the company, providing analysis results on ways to improve its sustainability.

1.3 Project Objective

This project provides a broad overview of the strategies which Changi Airport have adopted to gain competitive advantage. It does this by firstly undertaking a competitive analysis of the industry and assessing the extent of influence which an airport operator has over the factors which affect an airport's competitiveness. This project concludes by considering the case of low cost carriers (LCCs) and the choice of strategic direction which are available to address the needs of the types of airlines. The project objective if thus to enhance the competitiveness of Changi Airport.

1.4 Project Title

The project title will be "ENHANCING THE COMPETITIVENESS OF CHANGI AIRPORT"

1.5 Company Background

Singapore Changi Airport is the main airport in Singapore. A major aviation hub in Southeast Asia. Changi Airport has four passenger terminals with a total annual handling capacity of more than 70 million passengers. Terminal 1 opened in 1981, followed by Terminal 2 in 1990 and Terminal 3 in 2008. The Budget Terminal, built for low cost carriers, opened in 2006. Since its opening in 1981, the airport has made its mark in the aviation industry as a benchmark for service excellence, winning over 380 awards since 1981,[1] including 28 'Best ' awards in 2010 alone. Changi Airport's efforts to counter the onset of age include periodic physical upgrades to its existing terminals, building of new facilities and the provision of a high level of customer service.

Figure 1.1: Changi Airport Terminal 1

1.6 Nature of Industry

The airport, operated by The Changi Airport Group, is the home base of Singapore Airlines, Singapore Airlines Cargo, SilkAir, Tiger Airways, Jetstar Asia Airways, Valuair, and Jett8 Airlines. As of November 2010, Changi Airport serves more than 100 airlines operating 6,100 weekly flights flying off to some 210 cities in about 60 countries and territories worldwide.[3] [4] The airport is a secondary hub for Qantas, which uses Singapore as the main stopover point for flights on the Kangaroo Route between Australia and Europe. Qantas is the largest foreign airline to operate from the airport, with over two million passengers annually. An important contributor to the economy of Singapore.

1.7 Products, Process and Technology

1.7.1 Products

In the past three decades, Changi Airport and Singapore Airlines has become two of the most recognisable symbols of success in the development of Singapore as an aviation hub. Today, both Changi Airport and Singapore Airlines are well-known for their efficiency in operations and customer service. However, perhaps little known to some, Singapore is also a leading aerospace hub with aerospace Maintenance, Repair and Overhaul (MRO) services.

There is also the Air