High Employee Turnover Rate at Singapore Airline’s Dhaka Station:

Feasible Measures for Prevention

 Internship Report on:

High Employee Turnover Rate at Singapore Airline’s Dhaka Station:

Feasible Measures for Prevention

Submitted to:
Office of Placement and Alumni
In Fulfillment of the Requirement for the Completion of Internship Program

Prepared and Submitted By:

Rahman Mohammad Arafat
04-04558-1

Prepared For:

Mr. Samiul Parvez Ahmed

Coordinator: Office of Placement and Alumni
Honorable Member of Faculty: School of Business

Submitted On:
August 18, 2007
 American International
University –Bangladesh
August 18, 2007

To,
Mr. Samiul Parvez Ahmed
Coordinator,
Office of Placement and Alumni,
American International University – Bangladesh

Re: Submission of Internship Report Titled “High Employee Turnover Rate at Singapore
Airline’s Dhaka Station: Feasible Measures for Prevention”

Dear Sir,
I Have the Pleasure to Express my Gratitude towards the Office of Placement and
Alumni, American International University - Bangladesh for facilitating me in availing
the precious opportunity of accomplishing my Internship Program at Singapore Airlines.
For the fulfillment of the requirements of the program, I was had to conduct a business
research on any business issue of Singapore Airlines, the subject for which I had the
freedom to choose.

As par the requirements, I submitted you a proposal on a Business Research topic

titled “High Employee Turnover Rate at Singapore Airline’s Dhaka Station: Feasible
Measures for Prevention” on July 11, 2007. According to the Proposal, I have carried out
the Study and prepared the report based on it, which was a challenging task to accomplish
and I am highly optimistic on the outcomes of the study to the organization.

I, hereby, have the pleasure of submitting you a copy the report, a written
presentation of the outcomes of the thought provoking and challenging study, the topic of
which has been an issue provoking anxiety to the Management of Singapore Airlines as it
is a problem they are experiencing globally.

I, hereby, am anxiously looking forward to your feedback on the process,

outcomes and every detail of the study.

Yours truly,

_______________________
Rahman Mohammad Arafat
ID# 04-04558-1
 Acknowledgement
My heartfelt thanks first of all to all the employees of Singapore Airlines
and other respondents who have patiently cooperated with me in course of
the study, by their spontaneous response and rational thinking.

My special gratitude is highly due to Mr. Cheang Kok Ming, Honorable

General Manager of Dhaka Station of Singapore Airlines, for entrusting me
with confidential information of the organization.

I am also pleased to thank Mr. Yeameen Kabir, Country Sales Manager of

Singapore Airlines for Bangladesh, Mr. Rafiqul Islam, Head of Accounts,
SIA, and Mrs. Cheryl Gonsalves, Secretary to General Manager, SIA, for
their conceptual and technical support that opened up new dimensions for
the study which were not brought into consideration before.

Intense Gratitude from me is also due to Mr. Abdul Kader Nazmul,

Honorable Member of the Faculty and Coordinator, Office of Sports,
American International University – Bangladesh, and Mr. Ziaul Hoq,
Honorable Member of the Faculty, School of Business, American
International University- Bangladesh, for their guidelines and feedbacks on
the research procedure in course of the study.

Finally, I would like to Express Heartfelt Gratitude Mr. Samiul Parvez

Ahmed, Coordinator, Office of Placement and Alumni, American
International University – Bangladesh, for facilitating my access to
Singapore Airlines, the most respected travel brand in the world, the result
of which ended up as opening of the great opportunity of researching on a
sensitive issue of a global, premium brand, ranked as the world’s most
admirable company in the Global Aviation Industry.

Executive Summary
Singapore Airlines is considered the World’s most respectable travel brands. It has been
ranked as the most admirable Company in the Global Aviation Industry. It has a huge
segment of loyal customers scattered all round the world. However, the same degree of
loyalty has not been exhibited by its internal customers: its employees, for the last few
years or so. The employee turnover rate seems to be competing with its Air Carriers in
rising to heights in the blue yonder.
Various positive and normative statements have been made by many interested bodies
regarding the reasons behind the high turnover and possible solutions. However, no
research has been done to identify the main problems behind the situation.
This study has attempted to explore for the roots, only the bitter fruit of which is the high
turnover rate of employees, and has also attempted to forward possible solutions
appropriate for the situation.
 TABLE OF CONTENTS
EXECUTIVE SUMMARY
1.0 INTRODUCTION 2
1.1 Problem Statement 2
1.2 Objectives of the Study 4
1.3 Scope of the Study 4
1.4 The Research Methodology 5
1.5 Sources of Information 6
1.6 Sampling 7
1.7 Limitations of the study 9
2.0 ORGANIZATION OVERVIEW 11
2.1 Singapore Airlines – History, Today and Tomorrow 11
2.2 Fleet Information 14
2.3 Aircraft Models of Singapore Airlines 14
2.4 Subsidiaries of Singapore Airlines 19
2.5 Corporate Responsibilities 20
2.6 Stock and Share Holding Information 23
2.7 Financial Statistics 25
2.8 Operations 25
2.9 Partners and Benefits 33
3.0 TOPIC ANALYSIS AND DESCRIPTION 37
3.1 Employee Turnover Rate 37
3.2 Feasible Measures 38
3.3 MacClelland’s Theory of Needs 39
3.4 SWOT Analysis 41
4.0 FINDINGS 44
4.1 Strengths of Singapore Airlines 44
4.2 Weaknesses of Singapore Airlines 46
4.3 Opportunities for Singapore Airlines 49
4.4 Threats for Singapore Airlines 50
5.0 RECOMMENDATIONS 53
5.1 Recommendations Based on SWOT Matrix Analysis 53
5.2 Drawbacks of the Recommendations 54
6.0 CONCLUSION 57
APPENDIX 1 Questionnaire for Interviewing Long Retained Employees 58

APPENDIX 2 Questionnaire and Interview Guide for About to Switch Employees59

APPENDIX 3 Focused Group Discussion Guide 60
APPENDIX 4 Guide for Interviewing Top Management 61
APPENDIX 5 The SWOT Matrix 62
BIBLIOGRAPHY 63

Chapter 1:
Introduction
1.0 Introduction
1.1 Problem Statement
High Employee Turnover Rate at Singapore Airline’s Dhaka Station: Feasible Measures
for Prevention
Human Resource is one of the most important assets of a company; regardless to what it
produces is labor intensive or technology intensive. Although in this modern era of
automation, many companies prefer automated processes as a substitute for labor, which
lets them to operate at a higher level of efficiency and enjoy higher operating leverages;
they can never deny the need for human resource, without which the automated processes
could not be installed, without which it could not be maintained and there would have
been no one to keep the operations and production going when the automated processes
start malfunctioning, and even more, no one to fix them up. Moreover, human brain is
more reliable in decision making when encountered by unstructured problems. Bearing
this in mind, management bodies of all organizations need to recruit, develop, delegate,
lead, appraise performance and compensate employees to make sure that all works are
handled by the competent personnel, who will remain satisfied by the offered
compensation and scope for growth, and are likely to continuously improve their service
quality, for a significantly long period of time. Just as a lot of companies nowadays focus
and put their efforts more on retaining their existing customers than acquiring new
customers, most find it equally important to retain their best performing employees as
well. The rationale behind this employee retention strategy is backed by the fact that it
costs a lot to recruit new employees and providing them proper training in order to
develop them, a process which also takes a lot of time, and moreover, there is no
certainty that the newly recruited employee will exhibit performance as compatible as the
one who is leaving the organization. Some even consider it a threat if the employee is
switching to another organization in the same industry, in case of which, there remains
the possibility of disclosure of confidential information to competing firms. Besides,
research has shown that it costs less to retain an existing employee than acquiring and
developing a new employee to match the required performance compatibility.
At present, the economy of Bangladesh is at a stage of growth. A lot of new companies
are starting with their operations at different industries, thus contributing to the nations
GDP, as well as partially offering a solution to the problem of high unemployment rate,
by creating job opportunities in their organizations, thus, pulling down the rate of
unemployment close to the natural rate of unemployment. However, some of the
companies, such as those in the telecom industry, are raising the expectation of the
potential employees to splendid heights by offering the most attractive compensation
packages to their employees. Unfortunately, not all new companies in various industries
can afford to pay as high for various reasons, which include, but are not limited to the
factors such as very small amount of their capital, small extent of operation and low rate
of growth and profitability of the industry itself. Employees of these organizations, as a
result of dissatisfaction, tend to switch to organizations paying higher.
There is little awareness in the Human Resource Market about the attractiveness of the
operators in the Aviation Industry as high paying employers. Operators in the aviation
industry do not offer much of a professional growth or career development opportunity to
its employees in Bangladesh. However, with some exceptions, this drawback is highly
offset by the very attractive compensation packages they offer. The Middle Eastern
Companies are the most renowned among these.
Singapore Airlines is one of the operators in the aviation industry which is globally
renowned as an airline offering service of premium value to its external customers, the
passengers. Flight records show that despite the high amount of price charged for its
tickets, a huge number of frequently traveling passengers almost always prefer to fly with
Singapore Airlines, i.e. it has a huge segment of loyal customers, retained for long time.
However, the case is not similar with most of its internal customers, the employees,
which is apparent from the fact that it is experiencing a high rate of employee turnover
and a low retention rate almost all over the globe. As for its Dhaka Station, it has been
found that employees are mainly switching to other airline operators, mostly to the
Middle Eastern airlines such as Qatar Airlines and Emirates Airways.
The rationale of this study is to identify the reasons behind the high turnover rate of the
employees, find possible solutions in order to lower the turnover rate and assess the
feasibility and effectiveness of the solutions.

1.2 Objectives of the Study

This study, titled as “High Employee Turnover Rate at Singapore Airline’s Dhaka
Station: Feasible Measures for Prevention” is aimed at fulfilling a set of Specific
Objectives, the summation of which is stated as its Broad Objective.

1.2.1 Broad Objective

The Broad Objective of the Study is to identify a set of actions to be employed by
Singapore Airlines in order to increase its employee retention rate and achieve longer
employee retention periods.

1.2.2 Specific Objectives

A set of Specific Objectives have been identified as essential to be accomplished in order
to fulfill the Broad Objective. These Objectives are as follows:
⇒ Identifying external factors driving employees’ decision towards switching job
⇒ Identifying internal factors driving employees’ decision towards switching job
⇒ Identifying external factors retaining some employees for a significantly long time
⇒ Identifying internal factors retaining some employees for a significantly long time
⇒ Formulating Strategies utilizing the favorable internal factors to take advantage of the
favorable external factors
⇒ Formulating Strategies utilizing the favorable internal factors to minimize or avoid
the effects of the unfavorable external factors
⇒ Formulating Strategies to recover from the unfavorable internal factors by taking
advantage of the favorable external factors
⇒ Formulating Strategies to recover from the unfavorable internal factors and avoid or
minimize the effects of the external factors

1.3 Scope of the Study

The study encircles identifying reasons behind the high rate of employee turnover from
Singapore Airlines, Suggesting Measures to be taken for Retaining Current Employees,
Identifying the Factors that are Satisfying some Long Retained Employees, Measuring
the intensity of needs for Affiliation, Achievement and Power of the long retained
employees and those who have notified of their resignation within the current year, taking
feedback of the switching employees on how they evaluate their jobs or position in the
Organization, Introducing new measures to Identify Retainable Employees in the
Recruitment process, Identifying Sources and Segments of Retainable Future Employees
and Qualitative Analysis for the Feasibility of the Recommendations put forward.

1.4 The Research Methodology

1.4.1 Data Collection Methods
• Verbal Interview: Verbal Interview was conducted with the top management employees
of Singapore Airlines in Bangladesh. Appendix 4 illustrate interview guide used as
research tool while interviewing the top management.
• Observation: The city office of Singapore Airlines Dhaka Station at Gulshan – 2 and
the Air Traffic office in the Zia International Airport were subjected to observation in
order to assess the environment of the offices in terms of the sociability and solidarity.
• Focused Group Discussion: Sessions of Focused Group Discussions were organized
with undergraduate students on their final year of undergraduate program, studying in
different public and private universities and colleges. Appendix 3 illustrates FGD guide
used while moderating the focused group discussion.
• Questionnaires: Questionnaires designed to measure levels of Needs for Affiliation,
Power and Achievement, were provided to the long retained employees and employees
who have notified of their voluntary resignation within the current year. The
questionnaires are illustrated by appendices 1 and 2.
• Secondary Information: Secondary Information consists of company information
which has been collected from the company’s official website and a few facts and
figures obtained from the top management.

1.5 Sources of Information

1.5.1 Primary Information
Populations: Five bodies were identified as essential to be subjected to survey for the
study. These bodies, the populations, serving as the source of Primary Information, from
which the samples have been selected, are:
 Employees from the Management Body
 Long Retained Employees of Officer status who have been working in Singapore
Airlines for more than eight years
 Current employees who have already notified of their resignation
 Public and private colleges and universities
 Undergraduate students of private and public universities or college, on the final
year of their undergraduate program and shall soon be looking for jobs
 Offices maintained by Singapore Airlines

1.5.2 Secondary Information

Internet: General Company Information such as company background, success stories,

etc has been collected from the internet. Also, for some of the theoretical concepts, the
internet has been used as a source of knowledge
Database: Historical data and certain pieces of quantitative facts about the company and
industry were provided by the management body, which claims that these sets of data are
in accordance to the company’s database or are the findings of some previous research.

Top Management: Certain pieces of information which were available neither in the
website nor in company databases, were obtained by interviewing the top management
employees, who recalled these information from their memories.

1.6 Sampling
1.6.1 Sampling Units
The following bodies were considered as sampling units for the study:
 Group of Managerial level Employees
 Group of Employees Retained for more than eight years
 Group of Employees who have notified of their resignation
 The offices maintained by the organization in Dhaka
 Group of education institutions whose graduates are likely to be future employees
 Group of students on the final year of their undergraduate education program of
the selected institutions

1.6.2 Sampling Procedures

Managerial Employees: A judgmental sampling procedure was used in selecting
employees from the management body, backed up by the rationale of collecting the most
accurate, appropriate and detailed information.
Long Retained Employees: A convenience sampling method was applied while selecting
employees for interview, who are working in Singapore Airlines for eight years or more.
Shortly Leaving Employees: As the size of this population is only four, census has been
done, therefore, no sampling technique applied.
Offices maintained by Singapore Airlines: For observing to assess the environment, a
population study was intended as the population size is only three. However, yet again,
the convenience sampling method had to be applied due to restriction of access, imposed
by the Civil Aviation Authority of Bangladesh, to the office of Cargo Handling. Only the
offices those were conveniently accessible were subjected to observation and assessment.
Sources of Potential Employees: A blend of Purposive, Judgmental and Convenience
Sampling approach was taken in selecting the education institutions which are likely to
be sources of future employees. From those in the most convenient locations, a pool of
institutions were judgmentally selected in such a blend that the lifestyle, cultural
reference and socioeconomic background of the students are likely to vary largely, and
thus their possible responses to the questions are likely to vary as well. The purpose was
to have an increased likelihood of difference of opinions.
Undergraduate Students of Final Year: A blend of Convenience and Snowball
Sampling techniques was employed. Initially, respondents most conveniently available
were selected, who then suggested names of specific others to be included.

1.6.3 Sample Sizes

Offices: Since the Population size is small, census was intended to be carried out.
However, due to access restrictions, only two out of the three offices could be subjected
to observation.
Managerial Employees: Four Employees from the Managerial Level were required to be
interviewed for certain facts and figures.
Long Retained Employees: Five out of Twenty-Five Employees who have been working
in Singapore Airlines for more than eight years were interviewed.
Employees About to Quit: Census has been conducted on the population with a size of
four members only in the set.
Education Institutions: The number of education institutions selected as sample for the
study was six. These institutions were North South University, American International
University – Bangladesh, Stamford University, Eastern University, Dhaka City College
and Titumir College.
Students of the Institutions: For the ease of control of the moderator, the number of
students chosen for each session of focused group discussion was kept limited to five.
1.7 Limitations of the Study
The topic selected could open up a splendid opportunity for research and data analysis.
Singapore Airlines is not only experiencing high employee turnover rate at its Dhaka
Station, but in the global arena as well. However, due to constraints of time and monetary
resources, the point of focus had to be kept on its Dhaka station only.

Former employees could not be contacted and therefore have not been subjected to
interview. Since Singapore Airlines do not formally conduct any exit interview, no
feedback from the former employees were available. However, some information
regarding their reasons behind quitting the job has been retrieved from the General
Manager, who says that these information were obtained from informal communication.

Due to access restrictions imposed by the Civil Aviation Authority of Bangladesh, the
office of the Cargo handling Department could not be subjected to observation in order to
evaluate its work environment. Therefore, regarding its work environment, information
provided by the employees of the cargo handling department had to be relied upon.

Lack of knowledge of finance and accounting was another major drawback that
restrained this report from being enriched with detailed cost accounting and financial
forecasting, which are essential tasks to be carried out by every organization before the
implementation of any new plan.
 Chapter 2:

Organization
Overview
2.0 Singapore Airlines - Organization Overview
Singapore Airlines has evolved into one of the most respected travel brands around the
world. It has one of the world's youngest fleet in the air, a network spanning five
continents, and the Singapore Girl as the symbol of quality customer care and service.
Customers, investors, partners, and staff — everyone expects excellence of it. And so, in
its lounges, its conferences, working relationships, and in the smallest details of flight, it
rises to each occasion and delivers the Singapore Airlines experience.

2.1 Singapore Airlines – History, Today and Tomorrow

2.1.1 SIA Story - The Creation of Singapore Airlines
From a single plane to an internationally respected brand, almost 60 years of innovation
and service has propelled the growth of Singapore Airlines to become one of the world's
leading carriers with an advanced fleet. It began with three flights per week, and today its
route network spans 100 destinations in 41 countries. Years ago, Singapore Airlines was
the first to offer free drinks and complimentary headsets. More recently, it pioneered in-
flight telecommunications services and unparalleled in-flight luxury. This year 2007,
Singapore Airlines celebrates its 60th Anniversary and soon, it will be the first to put
Airbus A380-800, the world’s largest plane into service.

2.1.2 Progress and Expansion

The history of Singapore Airlines dates back to 1 May 1947, when a Malayan Airways
Limited Airspeed Consul took off from Singapore's Kallang Airport on the first of three
scheduled flights a week to Kuala Lumpur, Ipoh and Penang.
Over the next two decades, the Airline steadily acquired more planes. There were
additions of the DC-4 Skymaster, Vickers Viscount, Lockheed Super Constellation,
Bristol Britannia, Comet IV, and the Fokker F27.
On 16 September 1963, the Federation of Malaysia was born and the Airline became
known as Malaysian Airways Limited. In May 1966, it became Malaysia-Singapore
Airlines.
Later, the new look of the Airline evolved further with its first Boeings - three B707s,
then a fleet of B737s.
In 1972, Malaysia-Singapore Airlines split up to become two entities - Singapore Airlines
and Malaysian Airline System.
This change was used to launch a new, more modern service approach on the airline. To
house a special fleet of B747s, B7272s, and DC-10s, the new Singapore Airlines also
boasted a new airfreight terminal and a B747 hangar.

2.1.3 The Singapore Girl is Born

In 1968, the Sarong Kebaya uniform designed by French couturier Pierre Balmain was
introduced and the internationally recognized image of the Singapore Girl debuted.

2.1.4 A Reputation for In-Flight Firsts

The 1980s brought a number of firsts. The Singapore Airlines fleet continued to grow, in
impressive and historic ways. It had the first A300 Superbus, the B747-300 Big Top, the
B757 and the A310-200. It is also the first airline in the world to operate an international
commercial flight across the Pacific Ocean with the 747-400 Megatop.

In the 1990s, Singapore Airlines revolutionized in-flight communications and

entertainment through the KrisFone - the first global sky telephone service - and Kris
World offerings. At the same time, it sought to further improve its unparalleled fleet,
placing a US$10.3-billion order for 22 B747-400s and 30 A340-300s in 1994, a US$12.7-
billion order for 77 B777s in 1995, and a US$2.2-billion order for 10 A340-500s in 1998.
The company was also the first to involve a comprehensive panel of world-renowned
chefs, the International Culinary Panel, in developing in-flight meals in 1998.

In 2000, the Airline placed 19 A380s on firm order and a US$4 billion order for 20 more
B777-200s in 2001. In 2004, Singapore Airlines was the first to operate the world’s
longest non-stop commercial flight between Singapore and Los Angeles in February on
the A340-500, and then surpassing the record (in terms of distance) later that year with
the non-stop service to New York (Newark) in June. The A380, the world's largest
commercial plane will soon enter service with Singapore Airlines, making it another
world’s first.

2.1.5 The Highest Service Today

Singapore Airlines today is built solidly on its history, from the designer bone china
flatware to the Bulgari cologne for First Class passengers, to its advanced fleet of aircraft
and motivated employees.

Today, its in-flight service is of the highest order. The Singapore Airlines World
Gourmet Cuisine boasts a selection of exclusive and tantalizing signature dishes,
specially designed by a panel of nine internationally renowned chefs, and a wine list
selected by three of the world's most discerning wine consultants.

KrisWorld, Singapore Airlines' award-winning and ever-expanding in-flight

entertainment system, offers customers a wide range of entertainment options. Customers
can choose from a variety of movies, TV programs, music CDs and channels. There is
also an extensive selection of video games and interactive applications including Berlitz
Word Traveler, a fully interactive learning program.

Singapore Airlines became a full member of the global Star Alliance in 2000 and with it
came "seamless" worldwide air travel. With the extensive network of partner airlines,
connecting flights, frequent flyer points, and baggage clearance are now a breeze.

Singapore Airlines’ route network reaches out to over 100 destinations in 41 countries.

2.1.6 A Future of Firsts

Singapore Airlines will make Aviation history when the Airline will become the first
Airline to operate the world's largest aircraft, the Airbus A380-800.
The future promises to bring more firsts like these, as Singapore Airlines continually
strives to drive quality service through innovation.

2.2 Fleet Information

From the beginning, Singapore Airlines learned that investing in the future means being
the safest, youngest, most advanced, and fuel-efficient planes in the skies. (The average
age of its passenger fleet is about 6 years. This excludes the A310-300s and surplus
B747-400s that have been decommissioned.) That tradition continues today with the
addition of evermore advanced aircrafts.
At present, Singapore Airlines is Operating a total of ninety-two planes of six different
types when another twenty-nine are on the process of manufacture as par the orders of
Singapore Airlines. Nineteen of these happen to be the Airbus A380-800, the world’s
largest plane which will be used for the first time in the Aviation Industry by Singapore
Airlines. The other ten pieces of planes on order are the B777 – 300ERs.

2.3 Aircraft Models of Singapore Airlines

At present, Singapore Airlines has six different models of planes flying around to many
destinations. The number of models will reach seven as it shall for the first time in the
aviation industry, shall launch the Airbus A380-800 Model, the largest Aircraft in the sky
till today’s history of the Aviation Industry all round the world. Brief information with
pictorial illustrations of these planes has been presented in this report.

2.3.1 The Airbus A380-800

Singapore Airlines will be the first in the global aviation industry to launch the Airbus
A380-800, which will be the largest aircraft till today’s history of the aviation industry.
Powered by its Engine of the Rolls Royce Trent 900 type, there are already nineteen
pieces of this model under construction and are expected to be ready fly from the October
of the current year, 2007. Figure 2.1 shows the outlook of the model.
2.3.2 The Boeing B777-300R
Figure 2.2 is a pictorial illustration of the Boeing B777-300ER model, a total of nine of
which is already being used by Singapore Airlines and another ten pieces are under
construction for Singapore Airlines. It uses an engine of the GE90-115B type.

Figure 2.1: The Airbus A380-800

Figure 2.2: The Boeing B777-300R

2.3.3 The Airbus A340-500

The Airbus A340-500 is powered by Rolls Royce Trent 553 Type of Engine. Figure 2.3
illustrates one of its five on fleet.
Figure 2.3: The Airbus A340-500

2.3.4 The Boeing B777-200ER

All the fifteen planes of the model Boeing B777-200ER use Rolls Royce Trent 892 Type
of Engine. Figure 2.4 shows one plane of this luxurious model, all seats of which can be
converted to beds.

2.3.5 The Boeing B777-300

Singapore Airlines is using twelve planes of the Boeing B777-300 model, which are
powered by Rolls Royce Trent 892 Type of Engine, an outlook of which carrier is
illustrated by Figure 2.5.
Figure 2.4: The Boeing B777-200ER

Figure 2.5: The Boeing B777-300

2.3.6 The Boeing B777-200

Illustrated by Figure 2.6, the thirty-one planes of the Boeing B777-200 model are
powered by Rolls Royce Trent 884 Type of Engine.
Figure 2.6: The Boeing B777-200

2.3.7 The Boeing B747-400

Figure 2.7 illustrates the outlook of the Boeing B747-400 model of carrier, which is
powered by an engine of the PW4056 Type. Singapore Airlines owns and is using twenty
planes of this model.

Figure 2.7: The Boeing B747-400

2.4 Subsidiaries of Singapore Airlines
Singapore Airlines proudly introduces its subsidiaries, SilkAir, Tradewinds Tour and
Travel, SIA Engineering Company, SIA Cargo, and SATS. These businesses add much to
the offerings of Singapore Airlines, allowing travelers to experience exotic Asian
destinations. Its corporate consumer offerings are complemented by its more industrial
ones too. With aircraft engineering for over 85 airlines, along with a suite of ground
services and cargo distribution to over 39 countries globally - SIA can take you there and
make sure you get there in style and strength.

2.4.1 Silk Air

Silk Air flies to Asia's most exotic locations, offering flights to 26 fascinating
destinations, each offering a unique 'unwinding experience' through its natural and man
made wonders, local cultures and customs.

2.4.2 Tradewinds

Tradewinds offers a wide range of tours, special deals and travel packages to many
destinations around the world.

2.4.3 SIA Engineering

SIA Engineering Company has been providing engineering services to more than 85
international air carriers from the United States, Europe, Middle East, and Asia Pacific.

2.4.4 SATS

SATS, the ground-handling subsidiary of Singapore Airlines, provides services including

catering, passenger, baggage, cargo and ramp handling, aircraft interior cleaning, aircraft
security, and aircraft linen laundry.

2.4.5 SIA Cargo

SIA Cargo operates to over 75 destinations around the world with its large fleet and most
technologically advanced commercial freighters - the B747-400 Mega Ark. With a wide
range of products, it provides flexibility to meet all types of needs to get cargo to
anywhere in the world, anytime.
2.5 Corporate Responsibilities
Singapore Airlines recognizes the importance of building strong relationships, not only
with its customers and business partners, but also with the many communities it serves. It
practices good corporate citizenship actively through the support of the arts, sports and
educational initiatives, both locally and abroad. It is also committed to helping the less
privileged, sponsoring programs for the needy, involving handicapped children as well as
senior citizens, and protecting the environment.

2.5.1 SIA for the Environment

Singapore Airlines takes a long-term view in the development of its air transportation and
related businesses. This includes broader responsibilities to the worldwide communities it
serves, and recognition that its operations take into account the preservation of the
environment.

2.5.2 SIA to Make Art Flourish

Singapore Airlines began supporting the arts in the 1980s, with the launch of the
Singapore Airlines Great Performers Series when it first brought world-class talent to
Singapore. Today, it remains a keen supporter of the Arts, by contributing in cash or in
kind, to various arts groups and events in Singapore which include the following:

2.5.2.1 The Singapore Symphony Orchestra

The Singapore Symphony Orchestra aims to enrich the local cultural scene, serving as a
bridge between the musical traditions of Asia and the West. Since its inception in 1979,
the orchestra has amassed many achievements that have brought credit to Singapore. The
orchestra comprises 98 professional musicians, most of whom are Singaporean.

2.5.2.2 Singapore Dance Theatre

Singapore Dance Theatre is the leading dance company and one of the flagship arts
institutions in Singapore. As an arts ambassador for Singapore, the Singapore Dance
Theatre has achieved international recognition in dance festivals in Europe and Asia.
2.5.2.3 Singapore Lyric Opera
The Singapore Lyric Opera was formed in 1990 with the objectives of presenting operas
and music theatre to Singapore audiences and offering opportunities to Singaporean
artistes to practice their art in opera productions of international standards.

2.5.2.4 Singapore Chinese Orchestra

The Singapore Chinese Orchestra is Singapore's only national Chinese orchestra.
Retaining traditional roots while exploring new musical frontiers, the orchestra aspires to
introduce Chinese orchestral music to an ever-broadening audience.

2.5.2.5 Singapore Airlines – National Arts Council (SIA NAC) Travel Scheme
Under the scheme, Singapore Airlines provides free and rebated tickets for young local
performers to travel overseas for further education or performances. The National Arts
Council set up as a Statutory Board in 1991, spearheads the development of the arts in
Singapore. Its mission is to nurture the arts and make it an integral part of the lives of the
people of Singapore.

2.5.3 SIA Supporting Education

As part of its support to the community, Singapore Airlines contributes to numerous
educational programs and events. These programs provide students with the opportunities
to achieve their full academic potentials.
Some of its many contributions include:

⇒ Donations to the Lee Kuan Yew School of Public Policy at the National
University of Singapore
⇒ Sponsorships to the Community Education Program in Indonesia which aims to
help over 2,500 underprivileged primary school and university students achieve their
full potentials
⇒ Donations to the Yong Siew Toh Conservatory of Music in Singapore
 ⇒ Sponsorship of the Singapore Airlines Aeronautical Engineering Gold Medal
awarded to the graduating student with the most outstanding academic performance at
the Aeronautical Engineering Course in Singapore Polytechnic
⇒ Sponsorship of the annual Singapore Airlines Award of Excellence given to the
most outstanding graduating student of the SIA-LaSalle College of the Arts
⇒ Educational assistance to communities through scholarship programs such as the
Singapore Airlines Untuk Pendidikan in Indonesia, the Smiling Together project in
Thailand and the Singapore Airlines Bantay Edkasyon Project in the Philippines

2.5.4 SIA Supporting National Events

As part of its contributions to the community, Singapore Airlines is also committed to
supporting significant national events.
For example, Singapore Airlines annually assist the National Day Parade organizing
committees in their preparations by providing air travel to various countries.

Other events include the nation’s efforts in its first attempt to scale Mount Everest in
1999 as well as the Antarctica 2000 and Everest 2001 expeditions.

For its contributions to the community, Singapore Airlines has received the "Outstanding
Corporate Citizen" award from the Singapore Council of Social Services, the SHARE
Program Platinum award from the Community Chest of Singapore, and the
"Distinguished Patron of the Arts" award on several occasions.

2.5.5 SIA Supporting Sports

As an ardent supporter of sports in the community, Singapore Airlines helps to nurture

young athletes by offering rebated air tickets to the newly established Singapore Sports
School and provide opportunities for young talents to gain exposure through active
participation in international competitions. As part of efforts to help strengthen
Singapore's image as a world-class cultural and sporting event city, the Singapore
Airlines International Cup horse race was established in 2000. With an annual
sponsorship of US$3 million, the event draws participation of top horses and renowned
jockeys from all over the world.
2.5.6 Welfare
As an international corporate citizen, Singapore Airlines recognizes the importance of
contributing to the communities it serves. Through corporate donations, sponsorships and
other forms of support, Singapore Airlines provides backing to a wide range of local and
overseas community groups and charity organizations.

2.5.6.1 Community Chest of Singapore

Since the early 1980s, Singapore Airlines has contributed $150,000 annually to the
Community Chest of Singapore. The Community Chest of Singapore was founded in
1983 to tap the generosity of individuals, companies and institutions to fund voluntary
welfare programs intended to help disadvantaged people in Singapore.

2.5.6.2 National Kidney Foundation

In 1987, the Airline helped set up Singapore's first kidney dialysis centre, with a donation
of S$233,000 to the National Kidney Foundation. The National Kidney Foundation is a
major voluntary health organization, seeking to prevent kidney and urinary tract diseases,
improve the health and well being of individuals and families affected by these diseases,
and increase the availability of all organs for transplantation.

2.5.6.3 Movement for the Intellectually Disabled of Singapore

As part of its 50th anniversary celebrations, the Airline contributed S$4 million to the
Movement for the Intellectually Disabled of Singapore (MINDS), to help fund the
construction of a new headquarters and sheltered workshop which provides employment
for up to 400 intellectually disabled members. The facility was completed in 2000, and
officially opened by the President of Singapore, Mr. S R Nathan.

2.5.6.4 The 5Cs

The Cabin Crew Club for Community Care or 5Cs, founded in May 2001, annually
organizes various activities and outings for residents of the Asian Women's Welfare
Association (AWWA) Community Home and students of Chao Yang Special School on a
regular basis. Made up of volunteers from our cabin crew and ground staff, the club
initiated a six-month program to feed as well as to improve the learning and teaching
conditions in two schools in Bohol in the Philippines in June 2005.

Today, the Airline continues to contribute to charities, community development

programs, philanthropic and promotional events aimed at supporting those causes, both
inside and outside Singapore.

2.6 Stocks and Shareholding Information of Singapore Airlines

2.6.1 Stocks and Shares
Singapore Airlines is listed as a company in the Singapore Stock Exchange where its
Stocks and Shares are transacted. Information of its stocks and shares as reported at the
end of July 2007 has been summarized in Table 2.1.
Stock Symbol SIA

Listed and Traded: Singapore Stock Exchange

Share Price (SGD) : High 19.60 on 13 July 07

for 12 months ending 31 July 2007 Low 12.70 on 02 Aug 06
Closing 19.40 on 31 Jul 07

No. of shares issued: 1,253,879,647

as at 30 June 2007

Table 2.1: Summary of Stock and Share Information of SIA as at the end of July 2007

2.6.2 Share Holders of Singapore Airlines

2.6.2.1 Major Share Holders

91.56% of the share of Singapore Airlines is held by various corporate bodies. Table 2.2
illustrates a list of these corporate bodies, which together form the group of major
shareholders of Singapore Airlines.
Major Shareholders Number of shares %
(as at 30 Jun 2007)
1 Temasek Holdings (Pte) Ltd 691,451,172 55.14
2 DBS Nominees (Pte) Ltd 198,569,578 15.84
3 HSBC (Singapore) Noms Pte Ltd 87,977,411 7.02
4 Citibank Nominees (Singapore) Pte Ltd 55,647,999 4.44
5 DBSN Services Pte Ltd 49,843,405 3.98
6 Raffles Nominees Pte Ltd 36,188,720 2.89
7 United Overseas Bank Nominees 16,292,676 1.30
8 Morgan Stanley Asia (Singapore) 5,266,387 0.42
9 Chang Shyh Jin 4,221,000 0.34
10 DB Nominees (S) Pte Ltd 2,357,076 0.19
Total 1,147,815,424 91.56%

Table 2.2: List of Major Share Holders of Singapore Airlines

2.6.2.2 Share Held by the Public

A total of 106,064,223 shares of Singapore Airlines are held by the general people. These
shares form 8.44% of the total number of shares of Singapore Airlines.

2.7 Financial Statistics

The Fiscal Year of Singapore Airlines starts from April 1, and ends at March 31 of the
following calendar year. Table 2.3 illustrates financial statistics of Singapore Airlines for
the year 2006-2007 in comparison with 2005-2006.

2.8 Operations

2.8.1 Operating Statistics

Table 4 illustrates the operational statistics of Singapore Airlines of the fiscal year 2006-
2007 in comparison with 2005-2006.
FINANCIAL STATISTICS 2006-07 2005-06
% Change
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Group
Financial Results ($ million)
Total revenue 14,494.4 13,341.1 + 8.6
Total expenditure 13,180.0 12,127.8 + 8.7
Operating profit 1,314.4 1,213.3
+ 8.3
Profit before taxation 2,284.6 1,662.1
+ 37.5
Profit attributable to equity holders of the Company 2,128.8 1,240.7
+ 71.6
Share capital 1,494.9 1,202.6
+ 24.3
Reserves
Capital reserve 44.9 40.8 + 10.0
Foreign currency translation reserve (59.5) (30.5) + 95.1
Share-based compensation reserve 97.3 81.8 + 18.9
Fair value reserve (45.5) 163.6 n.m.
General reserve 13,567.9 12,012.3
+ 13.0
Equity attributable to equity holders of the Company 15,100.0 13,470.6
+ 12.1
Return on equity holders’ funds (%) 14.9 9.6
+ 5.3
Total assets 25,992.0 23,369.5 + 11.2
Total debt 1,879.4 2,305.6
– 18.5
Total debt equity ratio (times) 0.12 0.17 – 0.05
Value added 6,510.1 5,534.0
+ 17.6
Per Share Data
Earnings before tax (cents) 185.2 136.3 + 35.9
Earnings after tax (cents) – basic 172.6 101.7
+ 69.7
Earnings after tax (cents) – diluted 170.8 101.3
+ 68.6
Net asset value ($) 12.11 11.00 + 10.1
Dividends
Interim dividend (cents per share) 15.0 10.0
+ 5.0
Proposed final dividend (cents per share) 35.0 35.0
–
Proposed special dividend (cents per share) 50.0 –
+ 50.0
Dividend cover (times) 1.7 2.3 – 0.6
Company
Financial Results ($ million)
Total revenue 11,343.9 10,302.8 + 10.1
Total expenditure 10,316.9 9,651.8
+ 6.9
Operating profit 1,027.0 651.0
+ 57.8
Profit before taxation 2,291.1 940.8
+ 143.5
Profit after taxation 2,213.2 746.0
+ 196.7
Value added 5,107.2 3,553.2
+ 43.7

Table 2.3: Financial Statistics of Singapore Airlines of the Fiscal Year April-March
2006-2007 in comparison with 2005-2006

OPERATING STATISTICS 2006-07 2005-06

% Change
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––

Singapore Airlines
Passengers carried (thousand) 18,346 16,995 + 7.9
Revenue passenger-km (million) 89,148.8 82,741.7 + 7.7
Available seat-km (million) 112,543.8 109,483.7 + 2.8
Passenger load factor (%) 79.2 75.6 + 3.6
points
Passenger yield (cents/pkm) 10.9 10.6 + 2.8
Passenger unit cost (cents/ask) 7.9 7.5 + 5.3
Passenger breakeven load factor (%) 72.5 70.8 + 1.7 points
SIA Cargo
Cargo and mail carried (million kg) 1,284.9 1,248.5
+ 2.9
Cargo load (million tonne-km) 7,995.6 7,874.4
+ 1.5
Gross capacity (million tonne-km) 12,889.8 12,378.9 + 4.1
Cargo load factor (%) 62.0 63.6 – 1.6 points
Cargo yield (cents/ltk) 38.4 38.6 – 0.2
Cargo unit cost (cents/ctk) 24.5 23.5 + 4.3
Cargo breakeven load factor (%) 63.8 60.9 + 2.9
points
Singapore Airlines and SIA Cargo
Overall load (million tonne-km) 16,486.8 15,806.8 + 4.3
Overall capacity (million tonne-km) 24,009.7 23,208.0 + 3.5
Overall load factor (%) 68.7 68.1 + 0.6 point
Overall yield (cents/ltk) 77.5 74.6 + 3.9
Overall unit cost (cents/ctk) 50.0 47.7 + 4.8
Overall breakeven load factor (%) 64.5 63.9 + 0.6
point
Employee Productivity (Average) – Company
Average number of employees 13,847 13,729 + 0.9
Seat capacity per employee (seat-km) 8,127,667 7,974,630 + 1.9
Passenger load per employee (tonne-km) 613,211 577,784
+ 6.1
Revenue per employee ($) 819,232 750,441
+ 9.2
Value added per employee ($) 368,831 258,810
+ 42.5
Employee Productivity (Average) – Group
Average number of employees 29,125 28,558 + 2.0
Revenue per employee ($) 497,662 467,158
+ 6.5
Value added per employee ($) 223,523 193,781
+ 15.3

Table 2.4: Operating Statistics of Singapore Airlines of the Fiscal Year April-March
2006-2007 in comparison with 2005-2006

2.8.2 Operating Review

The year in review also marked a significant milestone in the Airline’s history with the
launch of its new generation cabin products, raising industry standards for premium air
travel.
As a drive to become a more productive and cost effective organization, the Airline
divested its interests in some non-core assets and continued to review business processes
to ensure that functions are provided in the most efficient and effective way.

2.8.2.1 Network
The Airline expanded its network to Europe by adding a three-times-weekly service to
Milan and Barcelona in July 2006.
As part of South African network restructuring, the Airline began a non-stop three-times-
weekly service between Singapore and Cape Town in February 2007.
In March 2007, the Airline’s three weekly Singapore-Dubai-Cairo services were replaced
with direct flights to
Cairo three times a week. Singapore Airlines continues to operate 10 times weekly to
Dubai.
Capacity was boosted on routes to key destinations to meet increasing global demand for
air travel:
Destination Weekly Service
Male, Maldives 7 up from 5
Ho Chi Minh City, Vietnam 17 up from 13
Bangalore, India 7 up from 5
Seoul, Korea 24 up from 22
Hong Kong 42 up from 38
As at 31 March 2007, the Airline operated 764 weekly flights to 65 destinations in 35
countries.
Taking into account code share services with Star Alliance and partner airlines, the route
network grew to 144 destinations in 43 countries.

2.8.2.2 Fleet
Following the conclusion of a comprehensive evaluation of proposals from Boeing and
Airbus, Singapore Airlines placed orders with both manufacturers to cater for fleet
renewal and growth in future years.
During the year in review, nine new Boeing 777-300ER aircraft joined the operating
fleet. These deliveries raised the number of Boeing 777 aircraft in the Airline to 67,
reaffirming its position as the world’s largest operator of the Boeing 777 family. Five
Boeing 747-400s left the operating fleet. The Airline placed a firm order for 20 new
Boeing 787-9s, (with purchase rights for another 20), for delivery between 2011 and
2013. The -9 variant of the popular B787 features a longer range and larger cabin than
other models. These aircraft will be used mainly on medium range routes. In addition, an
order was placed for 20 Airbus A350 XWB-900s, (with options for a further 20), for
delivery from 2013. The Airline also increased its order for the Airbus A380 jumbo, from
10 to 19 aircraft, with options for a further six.
To cater for capacity growth before the new B787-9s and A350 XWB-900s are available,
the Airline will lease 19 A330-300s from Airbus, with deliveries between 2009 and 2011.
At list prices, the orders, excluding options, represent commitments of over US$12
billion, and position Singapore Airlines as a leading customer for new aircraft types being
developed and offered by Airbus and Boeing.
Delays to the initial deliveries of the A380s constrained capacity growth during the year
in review. The scheduled delivery of the first A380 in December 2006 did not occur, and
is delayed to October 2007, with subsequent deliveries similarly late. Singapore Airlines
held discussions with Airbus on the impact of these delays on the Airline’s growth plans,
and in December 2006, agreed on the terms of compensation with Airbus over the delays.
The terms of the settlement are confidential between the parties.
The passenger fleet operated by the Airline, as at 31 March 2007, comprised 94 aircraft,
with an average age of six years and three months.
The freighter fleet of Singapore Airlines Cargo, as at 31 March 2007, comprised 14
B747-400 Freighters, with an average age of six years and four months.
SilkAir’s fleet, as at 31 March 2007, consisted of eight Airbus A320 and five Airbus
A319, with an average age of five years.
2.8.2.3 Product and Services
The Airline unveiled its new cabin products to the world in October 2006. The products
are featured in the new Boeing 777-300ER aircraft which, by the end of the year in
review, were flying to Paris, Milan, Barcelona, Zurich, Frankfurt, San Francisco via
Seoul, and Hong Kong.
More routes will progressively be added in the upcoming years.

The New First Class

The new First Class offers the most exclusive comforts in the sky. With just eight stately
seats in the B777-300ER, customers are guaranteed personal attention as they relax,
work, or dine in utmost privacy.
The new First Class offers an individual 58-cm LCD screen and an all-in-one business
panel with laptop power supply and USB ports. The 89-cm wide seat is the largest in the
industry, and converts from a seat to the largest full-fl at bed in seconds. Cleverly hidden
compartments and the absence of overhead stowage bins create a more spacious cabin
environment.

The New KrisWorld

The Airline’s new KrisWorld is powered by the latest eX2 in-flight entertainment system
from Panasonic Avionics. It offers more than 1000 on-demand options. Customers can
choose from an extensive selection of movies, TV programs, interactive games, audio
CDs and learning applications. For the first time, office applications are offered,
providing customers the option to work onboard without a laptop.
High-resolution screens, sleek, compact handsets with intuitive controls and external
USB ports adorn all three classes. The specially designed anti-noise Phitek headphones
are another welcome feature for premium customers.

The New Business Class

All Business Class customers now have direct aisle access, thanks to the forward-facing
1-2-1-cabin configuration. The 76-cm wide Business Class seat has a fixed back shell and
comes with well-positioned reading lights, in-seat laptop power supply, and USB ports. A
suite of office applications on KrisWorld, viewed on the 39-cm screen, gives the
customer his or her very own office in the sky.
Work aside, the seat gives customers the flexibility to relax in their preferred seating and
lounging positions, or converts into a fully-fl at bed within seconds.

The New Economy Class

The Airline’s new Economy Class product provides new levels of comfort in the main
cabin. The seat is ergonomically designed to enhance comfort. The seat design ensures
that space is maximized, so customers enjoy greater legroom where it matters: around the
knees.
Finishes are elegant and features are smart, thanks to the use of advanced technology.
Every customer has an individual USB port, and a new LCD monitor to enjoy the
Airline’s renowned in-flight entertainment system, KrisWorld. Discreet reading lights
allow customers to enjoy reading without intruding on the person next to them.

2.8.2.4 Ground Services

Singapore Airlines customers continue to enjoy convenient check-in facilities at their
fingertips, as the Airline rolled out a series of technology-driven initiatives.

2.8.2.5 Internet Check-in

Customers can now check-in online, choose their preferred seats and print their personal
bar-coded boarding pass. Singapore Airlines is the first Asian carrier to have the self-
print bar-code boarding pass facility for most of its international flights.

2.8.2.6 Automated Check-in Machines

Automated Check-in Machines were installed at Changi Airport’s Terminal 2. The
system, which is similar to a bank ATM, allows customers to check themselves in,
choose their seats and collect their boarding pass at the same time. This user-friendly
process greatly reduces waiting time for customers.

2.8.2.7 Interline e-tickets

Singapore Airlines is on track to achieving IATA’s global goal of 100 percent e-ticketing
by mid 2008. As of March 2007, 94 percent of all tickets issued from e-ticket enabled
stations were e-tickets, up from 70 percent in April 2006. More carriers partnered
Singapore Airlines in its drive to promote interline e-tickets. Singapore Airlines
customers whose journeys involve connections with American Airlines, Air France,
British Airways, Continental Airlines, Delta Airlines and Virgin Atlantic Airways, need
only one interline e-ticket for the entire trip.

2.8.2.8 Loyalty Marketing

KrisFlyer
New Star Alliance members, SWISS International Airlines and South African Airways,
were added to KrisFlyer’s list of partner carriers. Collaboration with these partners give
members of Singapore Airlines’ frequent flyer program more ways to earn KrisFlyer
miles. Other new partners include HSBC (India and Philippines), HSBC Philippines
Wealth Management, OCBC (Singapore and Malaysia), Diners Club Australia, ICICI
Bank, American Express (USA) and New Otani Hotels.

The PPS Club

The Airline announced changes to its PPS Club in March, to come into effect in
September 2007. The changes are designed to maintain the exclusivity of the PPS Club
for the Airline’s premium customers, and to provide a more equitable criterion for
qualification and renewal of membership. The new criterion moves from a sector and
mileage-based scheme to one which recognizes value of travel in Business and First
Class. In future, qualifying members will need to accrue $25,000 of travel in First or
Business Class on Singapore Airlines and SilkAir services within a year.

Designer Touches
Furnishings in all classes are exclusively designed by Givenchy.
Meals are served to premium customers in fine restaurant-style, with full-table settings
and on Givenchy-created bone chinaware and glassware.
There is also a new range of specially selected in-flight amenities – Salvatore Ferragamo
lotions and perfumes for First Class customers and L’Occitane fragrance and aftershave
for Business Class travelers. These additions maintain the Airline’s commitment to well
recognized partnerships with leading global brands.

2.9 Partners and Benefits

SIA works with various Partner Airlines to offer improved network and service benefits
to our customers. The extra perks that its customers can look forward to include:

⇒ More connecting flights, particularly through code share arrangements

⇒ A more rewarding Frequent Flyer Program
⇒ Access to more passenger lounges at airports worldwide
⇒ Seamless travel experience up to final destinations
⇒ Availability of more combined fare products
⇒ Commitment to high service standards that come with the partners’ brand reputations

2.9.1 Code Share Partners

2.9.1.1 Silk Air

Silk Air is SIA's regional wing carrier serving 26 destinations in Asia offering a unique
'unwinding experience' through its natural and man-made wonders, local cultures and
customs.

2.9.1.2 Virgin Atlantic Airways

Virgin Atlantic Airways (VAA) is a London-based international carrier in which SIA has
49% stake. VAA offers innovative services that include in-flight massages and an
onboard bar for eating, drinking and meeting other travelers.
2.9.1.3 Star Alliance Member Airlines
The Star Alliance network covers 855 destinations and 155 countries.

As passengers of Singapore Airlines, one can look forward to seamless travel to many
more destinations through SIA's codeshare arrangements with the following 8 STAR
Alliance partners. In addition, one can enjoy a number of Star Alliance benefits when
traveling on any Star Alliance member:

• Lufthansa
• Air New Zealand
• Air Canada
• Austrian
• ANA
• Asiana Airlines
• Lot Polish Airlines
• South African Airways

2.9.1.4 SIA Code Share Destinations

Table 2.5 shows the SIA Code Share Destinations.

Codeshare Partners Destinations

SilkAir Phuket, Yangon, Chang Mai, Phnom Penh, Siem Reap, Medan, Manado, Trivandrum, Da
Nang, Kuching, Kochi, Surabaya, Kota Kinabalu, Kunming, Xiamen, Chengdu,
Chongqing, Shengzhen, Palembang, Solo City, Balikpapan, Langkawi, Mataram,
Kaohsiung

Virgin Atlantic Airways Washington, Boston, Miami, Orlando, Los Angeles, San Francisco, Dubai

Lufthansa Frankfurt, Hannover, Bremen, Hamburg, Dresden, Dusseldorf, Leipzig, Stuttgart,

Cologne, Nuremberg, Berlin, Muenster, Geneva, Brussels, Vienna, Prague, Nice, Lyon,
Marseille, Toulouse, Stockholm, Copenhagen, Helsinki, Oslo, Barcelona, Bilbao, Madrid,
Auckland, Christchurch, Milan, Paris, Budapest, Rome, Munich

Air Canada Toronto, Montreal, Vancouver, San Francisco

Air New Zealand Auckland, Christchurch, Wellington, New Plymouth, Dunedin, Queenstown, Sydney

ANA Tokyo

Asiana Airlines Seoul

LOT Polish Airlines Warsaw

Malaysian Airlines Kota Kinabalu, Kuching, Penang

Royal Brunei Airlines Bandar Seri Begawan

South African Airways Capetown, Durban, Port Elizabeth, East London

Table 2.5: SIA Code Share Destinations

2.9.2 Lounge Access

Apart from SIA’s own Silver Kris Lounges, its eligible passengers can also have a
relaxing time before flights at their partners’ airport lounges worldwide.

2.9.3 Loyalty Programs

KrisFlyer
KrisFlyer is the name of the Guest Reward Program or Frequent Flyer Program of
Singapore Airlines. It is a tool they use for the retention of its customers. It’s a mileage
account that keeps accounts of miles being traveled and redeemed by a member. It has
five levels of membership, which are The Base Member, Silver Member, Gold Member,
PPS Member and Solitaire PPS Member. Members of this frequent flyer program enjoy a
wide range of benefits and privileges depending upon their membership level.
Tie-ups of Singapore Airlines with other airline partners certainly make every trip taken
by its loyal KrisFlyer members and valued PPS Club members even more rewarding.
Members can earn KrisFlyer miles when traveling with its partners and enjoy the
flexibility of redeeming these miles on SIA or its partners' flights. There are many other
frequent flyer and recognition benefits that flyers can look forward to.
 Chapter 3:

Topic Analysis
And
Description
3.0 Topic Analysis and Description
High Employee Turnover Rate at Singapore Airline’s Dhaka Station: Feasible Measures
for Prevention
The Topic chosen for the research, as stated above, has two broad issues that require
discussing. These two issues are the followings:
⇒ Employee Turnover Rate
⇒ Feasible Measures

3.1 Employee Turnover Rate

Employee Turnover Rate is defined as rate at which employees have voluntarily quit their
jobs from an organization over a certain period of time. Mathematically, it can be
expressed as N/t, where N = Number of employees resigning voluntarily and t = the
period of time through which these incidents of voluntary resignations took place.
Employee turnover can take place because of a set of various internal and external
factors, which may or may not be within the control of the organization. A set as such
includes external factors such as better opportunity for employees in other organizations
or industry, matrimonial problems, problems related to maternity, having to look after the
business owned by the family, geographical migration, etc. factors such as these are
usually not within any degree of control of the organization. However, there is a set of
certain internal factors or intra organizational factors which are to a great extent, within
the control of the organization might also be responsible for voluntary resignation. A set
as such may include but may not be limited to factors such as unattractive compensation
packages, inadequate growth opportunity, lack of organizational sociability, below
standard hygiene factors, lack of motivation, etc. These internal factors might cause the
arousal of job dissatisfaction in an employee, as a result of which, an employee might
quit the organization. Many organizations conduct exit interview with their outgoing
employees in order to determine whether the resignation was a function of the internal or
external factors, which comes to them as a feedback, based on which the management
assess what adjustments, if any, is required or possible to be implemented in the practice
of Human Resource Management of the organization.
A careful eye is always required to focus on the employee turnover rate of an
organization, the rationale behind which is supported by a pool of valid reasons. First of
all, if an employee who has worked for many years in an organization, quits job, it is very
difficult to find a proper replacement of the lost intellectual asset. A new employee
recruited or promoted to fill up the position may not be as competent as the predecessor.
Moreover, to develop someone to fill up the position will require the successor to go
through all the trainings that the former employee had received, i.e. the company will
incur repeated expenditure for the same purpose. Above all, when employee turnover rate
rises markedly above the industry average, the company might consider itself to be a few
steps away from failure, as its cost of recruitment, training and development will go high
and the newly hired employees will not be able to generate quick at the same time high
returns on the investments or costs of their procurement incurred to the company.

3.2 Feasible Measures

The third principle economics states that rational people think at margins. However, the
applicability of the principle is not just limited to the decision making of individuals, but
extends to organizational decision making as well. Every organization, before taking any
action to overcome or recover from a situation of crisis, or to exploit an opportunity
capitalizing on its strength, must account for the cost that would occur to implement the
action and estimate or forecast the returns that are likely to come to the organization as a
result of the action’s implementation, and should only proceed towards implementation
of the action if it is found that the returns shall exceed the costs of implementation.
Feasible Measures can be defined as a set of realistic and cost effective actions with high
certainty of effectiveness that a company can take for handling a crisis situation. In the
context of the study, feasible measures refer to those actions that Singapore Airlines may
take in order to reduce its employee turnover rate, without making the cost of these
actions exceed the quantitative returns as a result of the implementation of these actions.
Generally, return is defined as the revenue generated. However, in the context of the
situation of the research, return refers to how much cost will be saved. Thus, feasible
measures mean realistic measures with high certainty of effectiveness, that Singapore
Airlines might take, the expenditure for which in the present time, will save higher
amounts of expenditure that might have occurred in the future or the long run.

Other Theoretical Concepts

Besides the two main broad issues as discussed earlier, there are some other theoretical
concepts that have been used for the purpose of accomplishment of the objectives of the
study. It is felt that descriptions and/or explanations of these concepts need to be
discussed for the clarification of the reader and know their relevance to the study. The
following sub sub-headings are the names of the concepts, theories or techniques used
and are followed by detailed explanation of them.

3.3 McClelland’s Theory of Needs

David Clarence McClelland (1917 – March 27, 1998) was an American personality
psychologist, social psychologist, and an advocate of quantitative history. McClelland
proposed a content theory of motivation based on Henry Murray's (1938) theory of
personality, which sets out a comprehensive model of human needs and motivational
processes. In McClelland's book The achieving society (1961) he asserts that human
motivation comprises three dominant needs: the need for achievement (N-Ach), the need
for power (N-Pow) and the need for affiliation (N-Aff). The subjective importance of
each need varies from individual to individual and depends also on an individual's
cultural background.

In his acquired-needs theory, David McClelland proposed that an individual's specific

needs are acquired over time and are shaped by one's early life experiences. Most of these
needs can be classed as either achievement, affiliation, or power. A person's motivation
and effectiveness in certain job functions are influenced by these three needs.
McClelland's theory sometimes is referred to as the three need theory or as the learned
needs theory. Later work indicated that motives are actually quite stable over long
periods of time.
Achievement

People with a high need for achievement ([[nAch]]) seek to excel and thus tend to avoid
both low-risk and high-risk situations. Predominantly Achievement-motivated individuals
avoid low-risk situations because the easily attained success is not a genuine
achievement. In high-risk projects, the Achievement-motivated see the outcome as one of
chance rather than one's own effort. High nAch individuals prefer work that has a
moderate probability of success, ideally a 50% chance. Achievement-motivated
individuals need regular feedback in order to monitor the progress of their achievements.
They prefer either to work alone or with others like themselves.

Affiliation

Those with a high need for affiliation ([[nAffil]]) need harmonious relationships with
other people and need to feel accepted by other people. They tend to conform to the
norms of their work group. High nAff individuals prefer work that provides significant
personal interaction. They enjoy being part of groups and when not anxious make
excellent team members, though sometimes are distractible into social interaction. They
can perform well in customer service and client interaction situations.

Power

A person's need for power ([[nPow]]) can be one of two types - personal and institutional.
Those who need personal power want to direct others, and this need often is perceived as
undesirable. Persons who need institutional power (also known as social power) want to
organize the efforts of others to further the goals of the organization. Managers with a
high need for institutional power tend to be more effective than those with a high need for
personal power.

Relevance of the theory to the study

Studying the Human Resource Management Practice of the aviation industry, it has been
evident that employees in the aviation industry under GSA, regardless to which Airlines
they are dedicated to, have almost no scope of having their need for power fulfilled as
they shall never rise to the powerful positions such as Station Manager or General
Manager. However, people with high need for achievment might find it suitable as the
jobs are challenging and operators in the industry provide high salaries. As for Singapore
Airlines, which is paying a below industry average salary to its employees, the segment
of employees with high need for achievement should perhaps be counted off as well. It
was therefore assumed that only people with high need for affiliation are most likely to
enjoy working at Singapore Airlines and hence, part of the study was dedicated towards
verifying this assumption by conducting Need for Power, Affiliation and Achievment test
among employees who have been retained for long time in the organization. The purpose
of it was to identify any correlation between the need for affiliation, achievement, or
power with the retention period of employees, based on which, a certain level of the
positively correlated need might be looked for in applicants during recruitments in future,
for an increased likelihood of desirable retention periods of future recruits.

3.4 SWOT Analysis

SWOT Analysis, is a strategic planning tool used to evaluate the Strengths, Weaknesses,
Opportunities, and Threats involved in a project or in a business venture. It involves
specifying the objective of the business venture or project and identifying the internal and
external factors that are favorable and unfavorable to achieving that objective.

The aim of any SWOT analysis is to identify the key internal and external factors that are
important to achieving the objective. SWOT analysis groups key pieces of information
into two main categories:

Internal factors – The strengths and weaknesses internal to the organization.

External factors – The opportunities and threats presented by the external environment.

The internal factors may be viewed as strengths or weaknesses depending upon their
impact on the organization's objectives. What may represent strengths with respect to one
objective may be weaknesses for another objective. The factors may include all of the
4P's; as well as personnel, finance, manufacturing capabilities, and so on. The external
factors may include macroeconomic matters, technological change, legislation, and socio-
cultural changes, as well as changes in the marketplace or competitive position. The
results are often presented in the form of a matrix.

SWOT analysis is just one method of categorization and has its own weaknesses. For
example, it may tend to persuade companies to compile lists rather than think about what
is really important in achieving objectives. It also presents the resulting lists uncritically
and without clear prioritization so that, for example, weak opportunities may appear to
balance strong threats.

It is prudent not to eliminate too quickly any candidate SWOT entry. The importance of
individual SWOTs will be revealed by the value of the strategies it generates. A SWOT
item that produces valuable strategies is important. A SWOT item that generates no
strategies is not important.

Relevance to the Study

The SWOT Analysis Approach has been used in analysing the situation of high
employee turnover in the Dhaka Station of Singapore Airlines. The Internal Factors have
been combined with the external factors to formulate possible strategic actions to be
evaluated for their feasibility and effectiveness in handling the situation.
Chapter 4:

Findings
4.0 Findings
Employee turnover is not a matter of huge concern to the Aviation Industry because it
hardly takes place. Therefore, no research has been done earlier on this issue in the
Aviation Industry and hence, no data was available to calculate the industry average rate
of employee turnover. However, the management of Singapore Airlines confessed that its
turnover rate is globally increasing over the last few years. Five employees have resigned
since January 2007 and another four employees have already notified of their resignation
within September, thus making a monthly average of one employee and a projected
annual average of twelve employees for the year 2007.
After the collection of data, followed by analysis of those relevant to the study, certain
problems have been identified which are the internal and external factors or the
weaknesses of and threats on Singapore Airlines that are acting as driving forces on
employees to quit the organization. However, some internal factors of the organization
and external factors in the Human Resource Market, or strengths and opportunities have
also been identified, of which Singapore Airlines can take advantage to recover from the
situation, i.e. reduce its employee turnover rate to a minimum acceptable level. Based on
these findings, a SWOT Analysis has been done in the context of HR Management.

4.1 Strengths of Singapore Airlines

Strength refers to the internal factors which are within the control of Singapore Airlines
and contribute in maximizing job satisfaction of employees. It also refers to the internal
factors that SIA might use in order to increase job satisfaction of its employees.

4.1.1 Sociable Work Environment

Observing the environment of the offices, it is apparent that Singapore Airlines provides
an excellent environment to and for its employees to work in. The degree of Sociability is
high in all three offices maintained by SIA in Dhaka.
4.1.2 Strong Brand Image of Singapore Airlines
Singapore Airlines is one of the most respectable travel brands in the global arena. Many
employees consider it an honor to be affiliated to this brand name.

4.1.3 High Financial Strength

Singapore Airlines, as a premium brand, earns huge profit every year. It has a huge
segment of loyal customer all round the world, despite the high amount of money it
charges for its tickets. In fact, Singapore Airlines charges the highest amount of money in
the whole industry for both passenger and cargo. Therefore, it enjoys the advantage of
high financial strength.

4.1.4 Best Training Programs to Develop a Pool of Efficient Employees

Employees of Singapore Airlines are renowned for their performance in the industry
which is a result of the most rigorous training they receive. They are considered the most
efficient of the Aviation Industry Professionals in the Dhaka Station because of their
consistent timeliness in making flight departure, when delay in flight departure regularly
takes place for Air Carriers of other operators.

4.1.5 High Degree of Loyalty of Employees with High Need for Affiliation
A good many number of employees have been found working for Singapore Airlines for
more than eight years. The sample of these employees scored high on the test for Need
for Affiliation but comparatively lower in the tests for Needs for Achievement and
Power. Figure 4.1 illustrates the difference in levels of needs of each employee of the
category interviewed.
 Figure 4.1: Level of Needs of Long
Retained Employees
Scores of Needs
25

20 Needfor
Achievment Score
15 Needfor Affiliation
10 Score
Needfor Power
5 Score
0
1

5
e

e
e

e
y

y
lo

lo

lo

lo

lo
p

p
m

m
E

Employees E

4.1.6 Maximum Job Security

Historical records show that at any station, under any situation that makes retrenchment
an essential step to be taken, Singapore Airlines never harbor on employee layoff. As a
matter of fact, to cut down costs during economic downturns or any adverse situation, it
at first lowers the rate of dividend to be paid to its shareholders. If the situation persists,
the next step it takes is lowering the salaries of the top management and slowly goes
down cutting salaries of mid-level managers, and then lowering salaries of the lower level
employees. Under the worst condition, it would identify some employees who are close
to their retirement age and request them for early voluntary retirement. The threat of
losing job at an early or middle stage of a career due to retrenchment is totally absent.

4.2 Weaknesses of Singapore Airlines

Weaknesses refer to the Internal Factors of Singapore Airlines that play a role in causing
dissatisfaction among employees, which results into their job switching.

4.2.1 Misperception of Management about Employees’ Expectation

Misperception of the top management about employees’ expectations is the root of all the
factors that are resulting to the high employee turnover, not only in its Dhaka Station but
also in the global arena, with the oriental countries in exception. The misperception is due
to cross cultural disparity of values. The board of directors is formed mostly of citizens of
Singapore. 42.5% of the citizens of Singapore are Buddhists and are the descendants of
the Chinese, Japanese and Korean ancestors who settled there earlier. The management of
Singapore Airlines perceives that employees should feel fulfilled by providing the best
service to the customers, with the intention and motivation of serving people with little
concern for material rewards, which is the theme of one of the key concepts of Buddhism
known as Karma1. Therefore the company attempts to motivate its employees more with
immaterial rewards such as empowerment, increased responsibility and words of
appreciation rather than with material ones such as huge amounts of money. A noble
perception that might hold true, and be an effective approach in employee motivation
within the oriental zone or hardcore followers of Buddhism, which is apparent from the
fact that the employee turnover rate is low in stations in the oriental zone, although it
would require extensive research to determine that there are no other micro and/or macro
economic factors behind the low turnover rate in order to establish the hypothesis.
However, for people in other regions with different cultural backgrounds, religions,
norms and values, this perception is not at all likely to be widely true. In case of the
Dhaka Station, it has been found that employees with high need for achievement and
power have completely different expectations, which are more focused on monetary
rewards. Also, Singapore Airline’s perception of employees’ preference of job security
over income and growth opportunity may be another judgmental heuristic as most of the
employees denied of any such preferences. Those who made any comment on the issue
prioritized income and growth potential over job security.

4.2.2 Poor Compensation Packages

Information on the industry average of salaries could not be obtained. However, from
word of mouth among the employees in the industry, it is known that most of the
operators in the industry such as the UK Based British Airways and almost all the Middle
Eastern companies pay salaries which are significantly higher than that paid by Singapore
Airlines. When an employee in the Air Traffic Operations of Qatar Airlines receives
23,000 BDT during probationary period, a Customer Service Assistant, the second
1
A Sanskrit Word that Literally Translates to Action in English. However, in the context of Philosophy of
Buddhism, it refers to the cause or motivation behind the action rather than the action itself.
highest position holder in the Air Traffic Department of SIA, after serving for eight years
in the organization, receives only 20,000 BDT.

4.2.3 Limited Opportunity for Professional Growth of Employees

Employees switching industry have complained that the Aviation Industry in Bangladesh
does not offer much opportunity for professional growth of local employees. Therefore,
this is not only a weakness of Singapore Airlines but a weakness of the industry itself. It
requires mentioning that these employees were found to be high scorers in the need for
power test, low scorers in the need for affiliation test and moderate scorers in the need for
achievement test. Figure 4.2 illustrates their Needs for Power, Achievement and
Affiliation Scores.

Figure 4.2: Level of Needs of Quitting

Employees

30
Needs Score

25 Need for
20 Achievment Score
15 Need for Affiliation
Score
10
Need for Power
5 Score
0
1

4
3
ee

ee

ee

ee
oy
oy

oy

oy
pl
pl

pl

pl
m
m

m
E

Employees

4.2.4 Low Margin of Increment after Annual Performance Appraisal

The average increment of salaries of mid-level officers, followed by annual performance
appraisal has been found to be between 800 to 1000 BDT. For the Top Level officers of
the Local station, this increment amount ranges from 1000 to 1500 BDT.

4.2.5 No Exit Interview

Since no exit Interview is conducted, feedback of former employees is not retained.

4.2.6 No Test for Measuring Intensity of Needs in the Recruitment Process

Singapore Airlines does not conduct any psychological test in the recruitment process to
measure an applicant’s level of needs for affiliation, achievement and power. As a result,
if an applicant with low need for affiliation but high need for power and achievement is
recruited, is not retained for much long.

4.3 Opportunities for Singapore Airlines

Opportunity refers to those External Factors which Singapore Airlines can take the
advantage of, in order to reduce its employee turnover rate.

4.3.1 Potential Employees with Low Salary Expectations

From the survey conducted among students of public colleges, it was found that students
of these organizations have low expectation about salaries, since they are not in the hurry
of getting quick returns for high investments as their cost of acquiring education was not
as high as those who have studied in expensive private universities. The same holds true
about students from the less expensive private universities, just that their expectation is a
little higher than the students from public colleges.

4.3.2 Low Switching Tendency of Employees from Financially Stable Families

The Long Retained Employees were found to be from families with stable financial
conditions. These employees are doing their job just for a professional identity and are
not in need of a source of a big income in the form of profession. Most of them are
owners of houses by inheritance, from which they extract rents which is most often, two
to three times higher than their salaries.

4.3.3 Applicants with High Needs for Affiliation

There are certain people who have high need for affiliation rather than power. These
people usually become loyal customers of brands, tend to socialize highly and usually
turnout to be loyal employees retained for long time if the environment suits

4.4 Threats for Singapore Airlines

Threats are the External Factors are provoking the high rate of employee turnover and on
which Singapore Airlines has no control, but should take precautions to avoid or at least,
to minimize the effects of these threats on itself.

4.4.1 Disparity of Employees’ Expectation with Management’s Perception

Management’s Perception of higher effectiveness of immaterial rewards in motivating
employees than material rewards and employees’ preference of job security over income
and growth have been denied by most employees.

4.4.2 High Growth Opportunity in Other Industries

The Aviation Industry in Bangladesh does not offer a high opportunity for professional
growth to its local employees. Employees with high need for power therefore tend to
switch to local companies in other industries for the development of their career.

4.4.3 Increased Cost of Living

Bangladesh depends highly on imported goods. Every year, it is having a negative
balance of trade. However, the Bangladeshi Currency, the Taka, is depreciating every
year against the currency of its sources of import. Therefore, cost of imported goods in
taka is going high every year, as a result of which, the cost of living is increasing
continuously. Under this situation, employees of low paying organizations are looking for
jobs that will pay enough to maintain the standard of living they are used to with.
4.4.4 Increased Cost of Education
The cost education, especially that of tertiary education has raised highly throughout the
last one and half a decade as a result of Private Universities entering the education
Industry and charging high amounts of fees for tuition. Graduates of these universities
look forward to extract quick returns of investments made for education from their jobs
and do not therefore prefer to settle for low paying jobs.

4.4.5 Attractive Compensation Packages Offered by Competitors

Information on the industry average of salaries could not be obtained. However, from
word of mouth among the employees in the industry, it is known that most of the
operators in the industry such as the UK Based British Airways and almost all the Middle
Eastern companies pay salaries which are significantly higher than that paid by Singapore
Airlines. When an employee in the Air Traffic Operations of Qatar Airlines receives
23,000 BDT during probationary period, a Customer Service Assistant, the second
highest position holder in the Air Traffic Department of SIA, after serving for eight years
in the organization, receives only 20,000 BDT.

4.4.6 Demand for SIA Employees among others Airlines in the Industry
Competing Airlines often come proactively to the Singapore Airlines’ Operations
Employees with job offer in their company. This is because despite the low salary, SIA
employees, especially in the Operations department are renowned in the aviation industry
for their superb efficient performance. When delay of flight departure is occurring
regularly for the Air Carriers of almost all the operators, Singapore Airlines has the
reputation of regularly succeeding to make the flights depart right in time unless due to
adverse weather conditions.

4.4.7 Abundance of Switching Options for the Qualified Employees

A lot of new local or global companies are entering various industries of Bangladesh.
Also, a lot of existing companies are expanding the extent of their business in
Bangladesh. These factors are leaving a wide range of attractive switching options to the
employees with high degree of qualifications, an intensive to which employees with low
Need for Affiliation are responding.
 Chapter 5:

Recommendations

5.0 Recommendations
5.1 Recommendations Based on SWOT Matrix Analysis
Based on the Findings being subjected to a SWOT Matrix Analysis as illustrated by
appendix 5, the following recommendations can be put forward, from which Singapore
Airlines should choose one or more strategies to overcome the situation.

5.1.1 Minimize Disparity of Perception and Reality

Singapore Airlines must have a perception of its employees’ expectation with a high
degree of accuracy. In order to achieve that accuracy, it must conduct job satisfaction
survey on its employees at regular intervals. It should also study the Human Resource
Market with respect to the cultural reference, norms and values, lifestyle and other
economic, social and behavioral aspects of the local people.
Also, it should conduct exit interview so that it retains feedback of former employees in
order to identify its points of ineffectiveness in providing job satisfaction.

5.1.2 Retain Existing Employees

Since Singapore Airlines has spent a lot of money in training and developing the pool of
highly competent existing employees, it should focus on retaining them. As employees
are switching to jobs providing better opportunity for income and/or growth, Singapore
Airlines should open up the scope to its employees by providing competitive salaries and
if possible, professional growth opportunity by promoting the qualified local employees
to management positions such as Station Manager and General Manager.

5.1.3 Identify and Screen Out Non-Retainable Applicants

If the strategy prescribed in 5.1.2 cannot be implemented, then it would not be possible to
retain employees with high need for achievement and power. Therefore, it should subject
applicants to the need for power, affiliation and achievement tests in the upcoming
recruitment processes. Those who will score high in the need for power and achievement
tests but low in the need for affiliation test will have to be screened out since it is very
obvious that these employees shall always be looking for better opportunities and shall
quit SIA as soon as one becomes available.
Also, SIA should try to avoid graduates from highly expensive private universities from
employing into the organization as their likelihood of being retained is very low because
they are likely to keep looking for high paying jobs even after joining SIA and shall
switch as soon as one is found.

5.1.4 Identify and Recruit the Retainable Applicants

By the virtue of its sociable work environment, Singapore Airlines has managed to retain
a number of its employees for a significantly long period of time. These are the
employees with high scores in the test for need for affiliation and low scores in need for
power and achievement. Also, these employees have received their tertiary education
from less expensive educational institutes or/and from families with strong or stable
financial conditions. Singapore Airlines should recruit those applicants, who are from
financially stable families, have high scores in the need for affiliation test and a low one
in the need for power test, and have studied in less expensive institutions for tertiary
education, who have been found to have low salary expectations, as they are more likely
to be satisfied by the work environment and not likely to be dissatisfied by the low salary
or absence of professional growth opportunity.

5.2 Drawbacks of the Recommendations

No solution can ever be an absolute solution to all problems. In fact, the solution to one
problem may stand as a problem itself to another solution. Therefore people, economies
and organizations are always in trade-offs. Rational individuals, policy makers,
organizational decision makers always focus on the marginal costs and benefits of every
possible solution before choosing one for implementation.
The recommendations forwarded in 5.1 are no exceptions from every other solution and
have certain drawbacks. Therefore, decision makers should be aware of the drawbacks
and evaluate the options for their feasibility and certainty of effectiveness.

5.2.1 Cost of Retention VS. Cost Saved by Retention

Increasing salary of employees shall result Singapore Airlines to incur additional costs,
the cost of retention. However, the rationale behind retention is to save cost of frequent
recruitments and re-expenditure of developing the replacement employee after spending a
lot of money in developing the predecessor who has quit after receiving the training.
Therefore, before deciding to increase salary, Singapore Airlines must account for the
cost of retention and make forecasts of cost likely to be saved by retention over different
periods of time.

5.2.2 Effectiveness VS Efficiency

Although the strategies prescribed in 5.1.3 and 5.1.4 are efficient solutions to the
problem, they suffer highly from uncertainty of effectiveness.
Human mind is one of the most unpredictable of everything on earth. So, it is impossible
to say that the recruited employees, who today have a high need for affiliation and low
need for power, will not be affected by external factors and suddenly recognize a high
need for power in the near future.
Chapter 6:

Conclusion
6.0 Conclusion
Employees are the internal customers of an organization. Just like any organization’s top
management needs to have a clear and accurate perception of its customers’ expectation,
needs either to fulfill it or take measures to change the expectations if they are unrealistic,
have to acquire new customers and focus on retaining them, the same set of normative
morale holds true for its employees. Without knowing the employees’ expectation from
the job, an employer can hardly ever meet the expectations. This might be one of the
biggest reasons that shall lead an organization to end-up with a pool of competent yet
dissatisfied employees. A dissatisfied employee can do more damage to an organization
than a dissatisfied customer can. Negative word of mouth from a customer might get
forgotten by others in course of time but the same from a dissatisfied employee will be
more readily accepted by people and will be perceived as highly credible. Keeping these
factors in mind, organizations need to focus on employee satisfaction and retention.
Singapore Airlines is perceived as one of the most respected travel brands in the world. It
has been positioned among the most admirable companies all round the world by its
customers. It has a huge segment of loyal customers all round the world. Now it is time
for Singapore Airlines to elevate itself to the same position in the perception of its
employees, a pool of people who have elevated it to its today’s position to its customers
through their diligence throughout the sixty years of its operation in Aviation Industry.
Appendix 1:
Questionnaire for Interviewing Long Retained Employees
Dear Respondent,
You are requested to answer this set of questions to
find out how you evaluate your job and your company
from your experience and identifying the most
satisfying attributes of the job, by the virtue of which
Singapore Airlines enjoys the pleasure of retaining
you and the benefit of your service for a long period
of time. Your cooperation might highly contribute to
fulfill the best interests of Singapore Airlines

Please mention:
1 The Year you joined Singapore Airlines: …………
2 Name of the Area of Dhaka City you live in: ……………………………………..........
3 Amount of house rent you Pay/Receive per month: ……………………………………
4 Highest level of education you have received: …………………………………………
5 Name of the institution you studied last: ………………………………………………

Please identify each of the following 15 statements according to how accurately it

describes you. Place the numbers 1, 2, 3, 4 or 5 in the box after each statement to rate the
statement as 1 = Doesn’t Describe Me at all, 2 = Describes Me Very Little, 3 = Describes
Me but Not for All Time, 4 = Describes Me Very Well and 5 = Describes Me Perfectly

1 I enjoy working hard

2 I enjoy competition and winning
3 I want/have lots of friends
4 I enjoy a difficult challenge
5 I enjoy leading and being in charge
6 I want to be liked by others
7 I want to know how I am progressing as I complete tasks
8 I confront people who do things I disagree with
9 I enjoy frequent parties
1 I enjoy setting and achieving realistic goals
0
1 I enjoy influencing other people to get my way
1
1 I enjoy belonging to lots of groups/organizations
2
1 I enjoy the satisfaction of completing a difficult task
3
1 In a leaderless situation I tend to take charge
4
1 I enjoy working with others more than working alone
5

Thanks for Your Cooperation ! ! !

Appendix 2:
Questionnaire and Interview Guide for About to Switch Employees
Dear Respondent,
This set of questions has been provided to you in order to
measure your level of need for power, achievement and
affiliation. Also, it is aimed at identifying any dissatisfaction
that you might be having, which is driving you to switch your
current job. Your cooperation will be highly appreciated and
your feedback will be considered valuable.

Please mention:
1 The Year you joined Singapore Airlines: …………
2 Name of the Area of Dhaka City you live in: ……………………………………..........
3 Amount of house rent you Pay/Receive per month: ……………………………………
4 Highest level of education you have received: …………………………………………
5 Name of the institution you studied last: ………………………………………………
6 What was your expectation from Singapore Airlines as an employee?
7 What was the basis of such expectations of you from Singapore Airlines?
8 What expectations do you think Singapore Airlines failed to meet as an employer?
9 What factors of your next employer do you consider superior in comparison to SIA?
Please identify each of the following 15 statements according to how accurately it
describes you. Place the numbers 1, 2, 3, 4 or 5 in the box after each statement to rate the
statement as 1 = Doesn’t Describe Me at all, 2 = Describes Me Very Little, 3 = Describes
Me but Not for All Time, 4 = Describes Me Very Well and 5 = Describes Me Perfectly

1 I enjoy working hard

2 I enjoy competition and winning
3 I want/have lots of friends
4 I enjoy a difficult challenge
5 I enjoy leading and being in charge
6 I want to be liked by others
7 I want to know how I am progressing as I complete tasks
8 I confront people who do things I disagree with
9 I enjoy frequent parties
1 I enjoy setting and achieving realistic goals
0
1 I enjoy influencing other people to get my way
1
1 I enjoy belonging to lots of groups/organizations
2
1 I enjoy the satisfaction of completing a difficult task
3
1 In a leaderless situation I tend to take charge
4
1 I enjoy working with others more than working alone
5
Appendix 3:
Focused Group Discussion Guide
1 What is your objective behind educating yourself?
2 What do you think is most important of all in life – Money, Power or Respect?
3 What is your definition of a good career?
4 Where would you like your career to take you?
5 Which Industries in Bangladesh nowadays do you consider to be the most attractive
ones for employment? Why?
6 What is the minimum salary that you would like to start with on your first job?
7 What is the maximum salary do you think you will be eligible for as a fresh graduate?
8 Is it better to retire from career as the CEO of a small local firm or as a mid-level
manager of a global company?
9 What would you look for the most in your job: A Work Environment that Suits you
Best, A Salary that would let you live a luxurious life or Position that you let you
exercise Power over others?
10 Which organization from the two would you consider more attractive for employment,
one that provides high salary but little professional growth or one that provides fast
growth opportunity but not enough salary to live luxuriously?

Appendix 4:
Guide for Interviewing Top Management
1 How long have you been working for Singapore Airlines?
2 Did you start your career with Singapore Airlines?
3 Where did you work before?
4 Are you more satisfied working for Singapore Airlines than the previous
Organizations you worked for?
5 What are your factors of satisfaction/dissatisfaction in your job at Singapore Airlines?
6 How would you compare these factors with your previous jobs?
7 What is the perception of Singapore Airlines about the expectation of its existing and
potential employees?
8 Does Singapore Airlines take enough measures to meet the employees’ expectation?
9 What measures does it take to meet the expectations of its employees?
10 Does Singapore Airlines consider the measures it takes as enough to meet the
expectation of its employees?
Appendix 5:
The SWOT Matrix
Strengths
1 Sociable Work
Environment
2 Strong Brand Image
3 High Financial
Strength
4 Best Training Program
5 Loyalty of employees
with high Need for
Affiliation
6 Maximum Job
Security
Opportunities SO Strategies
1 Public College Students with Low Salary 1 Recruit people with
Expectations high need for affiliation
2 Low Switching tendency of Employees from financially stable
from Financially Stable Families families and/or those
3 Applicants with high need for affiliation who have studied in
Weaknesses
1 Management’s Misperception of
Employees’ Expectations
2 Poor Compensation Packages
3 Limited Growth Opportunity for
Employees
4 Low Margin of Annual Increment
5 No Exit Interview
6 No Measurement of Applicants’
Levels of Needs
WO Strategies
1 Introduce Need for Affiliation test
in the recruitment process and
screen in the high scorers (W6+O3)
 and low need for power and achievement inexpensive education
institutes
(O1+O2+O3+S1+S5)

Threats ST Strategies WT Strategies

1 Disparity of employees’ expectation with
management’s perception of their expectation
2 High Opportunity for Professional Growth
in other Industries
3 Increased costs of Living
4 Increased Cost of Education
5 Attractive Salary Offered by Competitors
6 Demand for SIA Employees among the
other operators in the industry
7 Abundance of Switching Options for
Qualified Employees
1 Increase Salary and 1 Regularly Collect employee
Benefits feedback to minimize disparity
(S3+T3+T4+T5) (T1+W1+W5)
2 Introduce Need for Power Test in
the Recruitment Process and Screen
out the high Scorers (W6+T2+T5)
3 Promote Qualified Employees to
Respectable Positions
(T2+T6+T7+W3)
4 Increase Salary and Benefits
(W2+T3+T4+T5)

Bibliography:
Publications:
Singapore Airlines: Annual Report 2006-2007
Singapore Airlines: Operational Review 2006-2007
Wikipedia the Free Encyclopedia: David McClelland
Wikipedia the Free Encyclopedia: Balance of Payments
Wikipedia the Free Encyclopedia: Trade Surplus
Wikipedia the Free Encyclopedia: Religion in Singapore
Wikipedia the Free Encyclopedia: Karma in Buddhism
Wikipedia the Free Encyclopedia: SWOT Analysis

Websites:
http://www.singaporeair.com
http://www.utmem.edu/oed
http://en.wikipedia.org/wiki/David_McClelland
http://en.wikipedia.org/wiki/Balance_of_payments
http://en.wikipedia.org/wiki/Trade_surplus
http://en.wikipedia.org/wiki/Religion_in_Singapore
http://en.wikipedia.org/wiki/Karma_in_Buddhism
http://en.wikipedia.org/wiki/Swot_analysis