Analyzing Singapore Airlines Focus on Customer - Why did SIA scrap flights to nowhere ?

Just completed my midterms few hours ago. Grab a packet of chips ready to not celebrate, but instead accompany me to write my opinion on Singapore Airlines recent news on flights to nowhere and now dinning service and home food delivery. I have always been wanting to give my views on this issue, especially as an aviation geek, and also analysing it as a marketer! Why did SIA scrap flights to nowhere ?

Flight to Nowhere - An Environmental Concern

Flight to nowhere, honestly, was an excellent idea in my opinion as there are economic values to operating these flights to nowhere. However, as seen on news, many environmentalists are against these flights to nowhere as it will result in increased carbon emissions. In their opinion, these planes should remain grounded as flying to nowhere does not justify the carbon emissions. While reducing carbon emissions and protecting the environment is an upmost concern now due to climate change, environmentalists do not account for the presence of 'ghost flight', something prevalent in the sky now.

What is 'Ghost Flight'?

Firstly, this is certainly not some supernatural moment where a ghost are flying in the flight without pilots. From Simply Flying, ghost flights are aircrafts that are flying empty on a regular schedule, with either little or no opportunity for the regular public to buy tickets. However, what is the purpose of ghost flights then? In COVID-19 situation, as demand falls, ghost flight are rising to :

• Keep slots in airports, especially popular airport with limited slots like London Heathrow Airport. According to Simply Flying, in 2004 Qantas hired another airline to run ghost flight from London to Manchester to keep their newly acquired slot in Heathrow Airport.
• To keep pilots and plane at operational status. From Sam Chui's page, Etihad Airways are flying A380 (the world biggest passenger plane) to keep their pilots and planes at an operational status.

Picture above: Lufthansa A380 in Singapore (Sorry, I don't have an Etihad one since they fly Boeing 777 to Singapore)

Currently, as more airports and governments are giving special discount and policies to slots in airport with the fall in demand, the purpose of ghost flight is primarily for point 2 - to keep pilots and plane at operational status.

Why 'flights to nowhere' is/was an excellent idea ?

The reason why I believe 'flight to nowhere' is/was an excellent idea is because these flights make economic sense. To keep pilots and planes operational, Singapore Airlines' planes and pilots must still fly nonetheless, resulting in ghost flight that create carbon emissions. Instead of merely operating ghost flights, flight to nowhere will not only give SQ the opportunity to earn money with paying passengers, but also allow the planes and pilot to remain operational. The opportunity cost of scrapping flight to nowhere is higher than ghost flight since SQ could have paying passenger on board flights to nowhere instead of ghost flight. Ironically, environmentalists in Singapore are not voicing out against this ghost flight but voicing out against flight to nowhere.

However, while this makes economic sense, why did Singapore Airlines then still scrap these flights to nowhere?

Why scrap 'flight to nowhere' but instead operate ghost flight? Simply because 'Customer First'

"SIA said it developed these (new) experiences after conducting a market study and a review that looked into factors such as environmental implications and financial viability. It said it had initially considered launching flights to nowhere, but canned the idea after the review."

By scrapping away flights to nowhere, Singapore Airlines has successfully shown that it has understand the concerns of its customers of the environmental concern of flights to nowhere. Despite the sunk cost incurred in developing this new product concept to manage the fall in demand for flying, Singapore Airlines' management is willing to scrap away an entire new product development and return back to the drawing board to generate more new product concepts. This really proves Singapore Airlines' commitment to its customer needs and its strong leadership to make such a decisive decision to restart everything.

From my marketing class, when developing a new product concept, the innovation process starts by identifying the need and benefit of the stakeholder, followed by calling on the necessary technology to produce the form of the product. To understand the needs of stakeholders, market research is required and Singapore Airlines have indeed successfully executed it to understand their customers needs, to generate their latest offering: 'Restaurant A380 @ Changi', 'Inside Singapore Airlines (tour of their training center)' and 'SIA@Home' (aka SQGrabfood),

"SIA said it developed these (new) experiences after conducting a market study and a review that looked into factors such as environmental implications and financial viability. It said it had initially considered launching flights to nowhere, but canned the idea after the review."

Scrapping away flights to nowhere and creating these new plans is a reflection of successful customer engagement as stated by CEO Goh Choon Pang: "There has been a lot of interest in our customer engagement initiatives over the last few weeks, and I would like to thank everyone for their great ideas and suggestions." Singapore Airlines have successfully account for the environmental scrutiny of flights to nowhere and engaged with customers' crowdsourcing of ideas, creating the actual product customers have suggested, directly benefiting their needs in an eco-friendly way.

Hence, Singapore Airlines have successfully enhanced its excellent brand value of being customer centric and excellent in customer service (#1 Airline for a reason ~) Why did they do so ? This simply fits into two of its values: 'Pursuit of Excellence' and 'Customer First' - going the extra mile to exceed expectation. They have increased their brand value as the national carrier of Singapore, listening to the concerns and feedbacks of concerned loyal Singaporeans who are proud of Singapore Airlines.

Conclusion: An excellent decision to scrap flight to nowhere and create new product concepts to cater to the needs of its customers.

While flights to nowhere makes economic sense, Singapore Airlines has valued its customer needs over this rational economic point of view of opportunity cost. This is an excellent example of how Singapore Airlines is strong in its marketing, always listening and engaging with its customers to simply exceed expectations with their excellent service and products (including their new initiatives and their lovely products on board). Cheers to Singapore Airlines great decision making to scrap an entire product concept and react quickly to offer many more products.

However, while I am all excited on dining on board their A380, $300 for a business class seat is too high a price tag for me hahaha.

Credit & Reference:

https://www.straitstimes.com/singapore/transport/sia-drops-flights-to-nowhere-plan-will-launch-a380-plane-restaurant-home

https://simpleflying.com/ghost-flights-empty-aircraft/

https://samchui.com/2020/07/25/major-airlines-operating-a380-ghost-flights/#.X3iAI2gzaUk