Introduction
The case study on Singapore Airlines revolves around the decision to enter the Indian market. Singapore International Airlines (SIA) aimed to enter the Indian market by partnering with TATA, a local company. The Indian market, in general, is complex, and the government strictly regulates the ability of foreign companies to enter it. SIA considered the partnership after the government allowed foreign investment in the aviation industry (Mazutis et al., 2004). One issue, however, was that TATA also planned to partner with a Malaysian company to create a low-cost airline in India. Therefore, this case study shows the complexity of entering the Indian market and the specifics of the national environment.
Discussion
On the one hand, the decision to enter the Indian market would be beneficial for SIA since the potential revenue and development opportunities in this region are vast. According to the case study, “the Indian aviation market was the ninth largest in the world in terms of passenger traffic and reported total revenues of $9.5 billion, with losses of $1.65 billion, in the fiscal year” (Mazutis et al., 2004, p. 2). However, despite the attractiveness of this market and field, the state has also had several significant issues. For example, the Indian rupee has been weak, and the high costs associated with maintaining the airline in this country could create serious constraints for SIA.
A partnership would be a necessity for SIA since the Indian government has put several restrictions on foreign investment in the national aviation industry. Moreover, a joint venture provides the benefits of having a partner company that understands the local market. However, a point of concern with this case study is Air Asia’s concurrent debut. This company is a pioneer in low-cost aviation, and its possible local partner, the TATA Group, wanted to create ventures both with SIA and Air Asia. Therefore, despite the benefits and the profit potential, SIA should not enter the Indian market. The TATA Group’s decision to partner with two foreign airlines significantly undermines the efforts needed to launch an airline. Moreover, in that case, TATA’s resources for the partnership with SIA would be limited.
On the other hand, SIA has been considering the opportunities that would allow this company to enter the Indian market. A relationship with TATA would offer the finest assurance of influence, financial support, and professionalism for starting a top-tier full-service domestic airline in the nation, which was something SIA had been searching for for a while (Mazutis et al., 2004; Kulkarni, 2018). TATA’s concurrent partnership with AirAsia to enter the low-cost airline market could be addressed contractually by outlining the potential conflict of interest and addressing the areas in which the two joined ventures would develop. While the two represented specific markets with distinct tactics on a global scale, the dynamics in India were such that the distinctions between the two were fuzzing as the price gap shrank. When SIA first started talking to TATA, its main priority was to ensure that the business case for joining the Indian airline market was strong.
Conclusion
In summary, by collaborating with a local business, TATA, Singapore International Airlines (SIA) sought to break into the Indian market. TATA also intended to collaborate with a Malaysian business to establish an inexpensive airline in India. In terms of passenger traffic, the Indian aviation market was the ninth largest in the world. The TATA Group’s choice to collaborate with two foreign airlines seriously jeopardizes the work required to start an airline. The best guarantee of influence, financial support, and professionalism for launching a premium full-service domestic airline in India would come from a connection with TATA.
References
Mazutis, D., Weeks, J., Vivanco, L., and Buche, I. 2004. Singapore airlines: The India decision (abridged). IIMD, 10.
Kulkarni, S. 2018. Analysis of Z Score for BSE listed airline companies in India. PARIDNYA, 6(1).