Singapore Airlines Ltd.

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Singapore Airlines Ltd.

Airline House, 25 Airline Road
P.O. Box 501
Airmail Transit Centre
Singapore, 9181
Republic of Singapore
5423333
Fax: 5424019

Public Company
Incorporated: 1972 as Singapore Airlines
Employees: 14,024
Sales: S$4.6 billion (US$2.85 billion)
Stock Exchanges: Singapore

Singapore Airlines (SIA), the national airline of Singapore and a major carrier in the Pacific region with routes to Europe and North America, is known for its customer service as well as for its continuing efforts to upgrade its aircraft and technology. SIA is 54 percent owned by the Singapore government with minor shareholdings by Delta Airlines and Swissair. A long-established strategic seaport, Singapore is an important transit point for travel to other areas of the Far East and, even during times of severe recession in the airline industry, SIA has been one of the world’s most profitable airlines.

SIA was incorporated in 1972, and its origins date back to the formation of Malayan Airways Limited (MAL). In 1936, the British government and Imperial Airways localized air transport in Singapore and Malaya (now Malaysia) by forming MAL. This new airline was owned and operated by Imperial Airways and the Ocean Steam Ship Company and was formally incorporated in Singapore in October 1937. During this time, however, an Australian company, Wearne Brothers, began scheduled airline services between what was to be MAL’s prime route, Malaya to Singapore. The first chairman of MAL, Frank Lane, concluded that the market could not accommodate two carriers operating this route. Consequently, MAL remained inactive for the next ten years. World War II and the Japanese occupation of the region ruled out commercial air transport, and during this period Wearne Brothers went bankrupt and ceased operations. In 1946 Singapore’s airport reopened, and Britain’s renamed national carrier, British Overseas Airways Corporation (BOAC), agreed to relinquish its control of MAL to a local concern, the Singapore Straits Steamship Company. In May 1947 MAL began scheduled services with two Airspeed Consul airplanes, six pilots, six radio operators, a dozen administrative personnel, and a few ground crew members. One month later a third aircraft was added.

The new airline was successful; commercial air transport increased dramatically after World War II, and initial services between Singapore and the Malaysian city of Kuala Lumpur were fully booked at M$35 each way. By the end of 1947 MAL had introduced three DC-3s into its fleet, and within a year of its first flight the airline was carrying 5,000 passengers every month. Over the next two years Bangkok, Rangoon, and Borneo were added to the destination list, and three more DC-3s were purchased; during this time MAL gained membership to the International Air Transport Association (IATA). Rapidly growing as a major air transport center, Singapore began to attract such established carriers as Air India. In 1955 the new Paya Lebar Airport, capable of accommodating jets and large planes, was completed.

In August 1957 Malaya received its independence from Great Britain, signalling dramatic changes for MAL. The government of Malaya took a holding in the company, and the Straits Steamship Company sold its shareholding to BOAC and the Australian airline Qantas. As a result of this restructuring, the Malayan government, BOAC, and Qantas each held a 33 percent stake in MAL. The airline added two Viscounts to its fleet in 1959 and began offering service to Hong Kong in 1958. Furthermore, MAL entered the jet age with the loan of a Comet from BOAC to service its international routes. Profitable every year since 1948, the company was proving to be a sound investment for its partners.

In 1963 the Federation of Malaysia was formed, comprising the former British colonies of Singapore, Sarawak, and Sabah. The airline was renamed Malaysian Airways Ltd. Under the leadership of Keith Hamilton, who joined MAL in 1960 after twelve years with Qantas, the company opened an office in New York to promote travel to Malaysia. In 1965 Singapore achieved its independence from Malaysia and the governments of Malaysia and Singapore acquired joint majority control of the airline in 1966, renaming it Malaysia-Singapore Airlines(MSA). The year 1968 marked the opening of a new 16-story headquarters building in Singapore, the commencement of service to Tokyo, and the purchase of three Boeing 707s and five 737s, making MSA competitive with other large jet operators. By 1971 service to Rome, London, Frankfurt, and Sydney was available.

In April 1970 Malaysia announced that it would establish its own national carrier for domestic and international flights. This resulted in the dissolution of MSA and equal distribution of assets between Malaysia and Singapore. Singapore received all the Boeing aircraft, the facilities in Singapore, and overseas offices in 18 countries. Malaysia received the remaining aircraft, facilities within Malaysia, and a cash payment from Singapore to make up the difference. In June of 1972 Singapore Airlines Limited was formed; its first chairperson was the former joint chief of MSA, J. Y. Pillay. In July of 1972 Singapore Airlines (or SIA as it came to be known) purchased its first Boeing 747s, which would become the mainstay of its fleet. The purchase of these aircraft coincided with an increase in frequency of flights to such destinations as Zürich, Athens, Frankfurt, Osaka, London, and Kuala Lumpur, which it now serviced 11 times daily. An immediate concern of SIA was to become known as a leader in international air travel. To this end, the company conceived a marketing strategy that stressed its commitment to passenger comfort and service and established the airline’s distinctive group of air hostesses. Nicknamed the “Singapore Girls,” the stewardesses, wearing custom-designed oriental sarongs, became recognized for their friendly and efficient service.

In addition to its marketing campaign, SIA launched a successful behind-the-scenes lobbying effort to convince various countries to grant the airline access to their airports. To cope with its growing number of flights and planes, SIA established a subsidiary called Singapore Airport Terminal Services Ltd. (SATS) in 1973. The company also embarked on a large scale training program for all of its staff which included a S$20 million training center and several state-of-the-art flight simulators. By 1975 SIA’s lobbying, marketing, and staff training efforts began to pay off with a 54 percent increase in passenger traffic that year alone. The fleet now consisted of seven Boeing 747s, fourteen 707s, and five 737s.

In addition to facing a large increase in passenger traffic, SIA had to accommodate a surge in operating costs, brought about not only by increased expenditures but also by huge increases in the price of oil in 1973 and 1977. SIA survived this crisis by adopting a company-wide cost cutting program and relying on its loyal customer base. In 1976 SIA’s annual passenger volume passed the two million mark—doubling the 1973 volume—and SIA ranked third among airlines in the Far East Asia region, behind Japan Air Lines and All Japan Airlines. In 1977 SIA’s lobbying of the United States government to grant access rights paid off, and it began service to San Francisco, Guam, and Honolulu. Also during this year SIA and the Singapore government announced plans for a vast new airport in the city of Changi, featuring a new headquarters building for SIA, a freight terminal for SATS, and an in-flight catering center. The government provided a five-year plan for the construction of the airport, which was scheduled for completion in 1981.

In July 1977 SIA announced a joint operation with British Airways to provide Concorde jet service between Singapore and London, an arrangement intended to bring prestige to SIA and help British Airways fully exploit the potential of its new supersonic aircraft. Featuring the SIA yellow-and-black logo on one side and the British Airways logo on the other, the aircraft had its maiden flight on 9 December 1977, but service was halted after three flights due to protests from the Malaysian government over environmental damage the Concorde caused while in Malaysian airspace. Full service resumed 13 months later on a thrice weekly basis via an alternate route and with a stop at Bahrain in the Persian Gulf. However, the service was terminated in November 1980. Nevertheless, the project was deemed a marketing victory, and SIA became known as one of only four airlines to operate the supersonic aircraft.

In the early 1980s SIA continued to expand its services in the United States. Weekly flights to Los Angeles via Tokyo began at the end of 1980. The following year marked the opening of Singapore’s new airport at Changi, offering improved service to visitors in Singapore and giving SIA the opportunity to expand its fleet. During this time, the comforts of the new airport, along with SIA’s renowned customer service, resulted in SIA being named the top airline in the Asia Pacific region by customer preference. In response to a growing demand, six Boeing 747-300s (known as “Big Tops”) were acquired, as well as seven Airbus A310s, to help SIA in its large-capacity routes. The purchases were part of a plan conceived in 1978 to replace the airline’s entire fleet in order to decrease maintenance costs and increase punctuality. The workhorse of SIA’s fleet has been the Boeing 747, which accounted for 90 percent of the airline’s flight revenues, and the company has purchased more than 50 of the aircraft, including a single order for 20 in February 1986, worth US$3.3 billion to Boeing.

By 1987 SIA’s destination network spanned 54 cities in 37 countries, and the airline had installed one of the world’s most modern computer centers, with a staff of 350, to coordinate and control its flights and other operations. In recognition of the airline’s 40th anniversary that year, SIA engineers restored the airline’s first plane, the Airspeed Consul. Furthermore, the Singapore government, which held 73 percent of SIA, floated part of its holding on the Singapore Stock Exchange, giving foreigners the opportunity to own up to 20 percent of the airline. Employee holdings remained significant at 17 percent.

In the 1990s SIA has enjoyed steady five-to-ten percent growth annually, and its profits are projected to climb, with travel in Asia increasing at a pace far exceeding that in the United States and Europe. Projecting that customers will demand quicker flights to the United States and Europe from Singapore and Asia, SIA is preparing for a new age with continued investment in aircraft and associated technology.

Principal Subsidiaries

Singapore Airport Terminal Services Ltd.; SATS NV Netherlands Antilles; SATS Apron Services Ltd.; SATS Cargo Services, Ltd.; SATS Catering, Ltd.; SATS Passenger Services Ltd.; Tradewinds Private Limited; Singapore Engine Overhaul Centre Private Ltd.; SIA Properties, Ltd.; Singapore Airport Duty-Free Emporium, Ltd.; Star Kingdom Investment, Ltd. Hong Kong; SH Tours, Ltd., United Kingdom; Singapore Jamco, Ltd., (51%); Singapore Flying College; Abacus Travel Systems, Ltd. (61%); SATS Security Services Private, Ltd.; Aero Laundry and Linen Service, Ltd. (51%); Auspice Ltd. (Jersey; 50%).