Developing a Sustainable Business Plan for Singapore Airlines in India

This paper presents a business plan for Singapore Airlines' sustainable expansion into India, focusing on increasing profitability while minimizing environmental impact. It analyzes the Indian market's potential, including rising demand for air travel and economic growth. The plan includes strategies for carbon offsetting, fuel-efficient technologies, and waste reduction. The analysis covers microeconomic factors like cost structures and macroeconomic considerations such as government policies and externalities. The goal is to create a business model that generates economic profit while adhering to sustainability principles, ultimately enhancing Singapore Airlines' global presence and contributing positively to the Indian economy. Desklib offers a wealth of resources, including solved assignments and past papers, to support students in their academic endeavors.

Running head: ECONOMICS FOR A SUSTAINABLE WORLD
ECONOMICS FOR A SUSTAINABLE WORLD
Name of Student:
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Table of Contents
1. Executive summary.....................................................................................................................3
2. Purpose of the business................................................................................................................4
6. Sustainability practice of airline industry....................................................................................5
6.1 Production..............................................................................................................................6
6.2 Consumption..........................................................................................................................7
6.3 Business Variability in the long run......................................................................................8
Reference List................................................................................................................................10

1. Executive summary
The aim of the paper is to do a business plan for a company that will expand its
operations in the foreign countries by creating a sustainable business structure that will generate
the revenues to cover the overall cost. The company chosen for the paper is Singapore Airlines
that will expand in operations in foreign market in order increase their level of income and
profits. The paper will effectively address the purpose of the paper by clearly stating the reasons
for expansion of the business in another country and its future expectation of profits. This
requires calculation of cost, revenues, airline routes, carriers and other services that can
effectively lead to rising sales and enormous profits.
The industry structure is studied in the paper that has structure the market structure with
respect to monopoly, perfect competition and oligopoly, which is then compared with the main
competitors (Kwona et al., 2019). This is done by studying the market demand with respect to
nature of the good as elastic or inelastic and understand its effect due to a change in interest and
inflation rates. The number of airlines to be provided is studied by calculating the quantity of
airlines needed for the business and estimating the revenue that will be derived from it
operations.
Revenue is estimated after calculating the fixed and variable cost for each unit produced
and then calculated the price from marginal revenue curve. Accordingly, the economic profit is
estimated such that price must exceed average total cost and marginal revenue cost. This is done
to secure understand whether firm will extract economic profit, zero economic profit or loss for
which sensitivity analysis is highly preferred. Next to which is the macroeconomic analysis that
enables to understand the macroeconomic conditions of the country in which the firm will

expand its business by doing scenario analysis with respect to optimized and sustainable offsets,
foreign stagflation, response of government and central bank. Externalities can affect the
performance of firms so externalities in consumption and production is effectively analyzed by
studying its social cost and suggest mitigating measures for them.
2. Purpose of the business
The purpose of the paper is to select a country where Singapore wants to expand its
operations that will enable them to extract greater economic profits in the long run in a
sustainable manner. As airline industry generates over 2.4 percent global emissions, Singapore
Airlines has been taking active roles in lowering the carbon impact on the environment by
lowering the usage of plastics to flying on the biofuels.
Table 1: Trend in carbon emissions, waste generated and recyclables
Source: (Faisal, Fithriani, & Achmad, 2019)

Table 1, shows the trend in recyclables, carbon emissions and waste generated in the past
years which is from 2014 till 2019. The trend shows that waste generated, crabon emissions,
tonic waste has potentially decreased since the financial year 2014/15 in comparison with
financial year 2018/19. Usage of recyclable products like cooking oil has increased which helps
to lower the carbon footprint as a basis of sustainability practice. The airline company serves as
the flag airline carrier of Singapore and is recognized as the World’s best airline company by
Skytrax in 2019. It is ranked among the top 15 air carriers globally and is well known for its
cleanliness, services and maintenance (Fan, & Lingblad, 2016). It has implanted a carbon
offsetting scheme that needs airlines to buy carbon offsets that lowers the level of carbon
emissions. Singapore Airlines has efficiently decreased the carbon footprint in the past years by
potentially investing in new aircraft models that are more fuel efficient. The company already
has business in 32 countries on five continents and is actively focusing on expanding its
operations in new economies.
Singapore Airlines is trying to expand its operations in India by increasing the number of
flight operations and flight routes in newer cities that will use new Airbus a350 and Boeing 787
that generates lesser waste and uses fuel efficient techniques that reduces the carbon footprint
added by the Airline industry. This will be highly beneficial for the Indian economy as the
carbon foot print added from the airline industry will have lesser impact in overall operations.
The company has series of green package flights that is successfully saved about 58.801 pounds
of carbon dioxide with the efficient combination of fuel efficient techniques, biofuels and
optimized flight operations. Moreover, it has efficient air traffic management systems that
decreases the level of fuel burn and carbon emissions. The airline company can enhance the
sufficiency of Indian airline system by rising awareness levels for sustainable biofuels for

aviation. It has been working to reduce in-flight waste by replacing reusable cups in place of
paper cups that saved over a million paper cups and plastic lids on a yearly basis.
There are several reasons for the expansion of Singapore Airlines in India which will be
addressed below (Wirtz & Heracleous, 2016). India has a population over 1.3 billion where the
demand for air travel has effectively increased in the past few decades due to globalization and
increased job opportunities. India is an emerging economy with evolution of markets that has
made airline travel extensively attractive. The country has the second most significant market in
Asia that is effective for raising sales and extraction of enormous profits (Fan, 2018). The
company has its regional subsidiary Silk Air with its service in 13 cities across India. Singapore
airline has received double digit growth in the past three years that is encouraging the carrier to
expand its services in India.
The company introduced Boeing 787 Dreamliner aircraft in Delhi that has extracted huge
profits and uses fuel efficient process for operation. Airbus A350 has been introduced in Mumbai
that greatly increased the revenues by efficiently using bio fuels. The company is planning to
operate the largest Airbus A380 out of Mumbai in the coming future. Flight operations has also
started in Kolkata. Since 2010, about 40 percent of airline operations of Singapore airlines has
increased in India. This can effectively raise the sales and help in extracting economic profits as
per effective changes in market based policies and outcomes (Miranda & Oliveira, 2018). Tin the
coming years, services between Singapore and Ahmedabad will be implemented. The number of
flights operations will be raised in Kolkata, Mumbai, Delhi and Bengaluru.
The growth of the Indian market is as the primary motivating factor for the expansion of
Singapore airline in US. Passengers traveling beyond Indian destinations to countries like Japan,
United States and Australia will enable Singapore airlines to increase the bulk of business

(Luttmann, 2019). This will adequately rise the level of economic profits of the company as it
will effectively lead to greater sales and increased revenues. Newer operations will be opened in
cities like Chennai, Kochi, Coimbatore, Karnataka, Vizag, and Thiruvananthapuram. Thus,
Singapore Airlines will have operations in across 11 destinations in India with a rise in the
number of flights provided per day.
6. Sustainability practice of airline industry
Sustainable operations are practices that looks after the overall operations with respect to
quality and its impact on the environment (Chen & Gayle, 2019). It refers to the need of
satisfying the current population without compromising the ability of future generations. This is
widely used in businesses as estimation of its impact in the economy is increasingly needed to
balance the sustainable issues and enhance the productivity of the firms. An activity can have a
direct or indirect impact on the environment and business activities of other firms. The cost or
benefit incurred by a firm on a third party is known as externality. The externality can be positive
or negative depending on the impacts either on production or on consumption. These costs can
be both private and social such it and affect can be seen on individual person or the society as
whole (Oliveira & Oliveira, 2018). A positive externality creates a positive impact on the society
or individual and a negative externality has negative effects on the society. The airline industry
has potential effects on individual and society which is described below which are both positive
and negative with respect to production and consumption respectively.
6.1 Production
The airline industry serves as the global transportation network for faster and better
connections. It acts a positive factor for the growth of tourism industry, trade flow and global
businesses which leads to economic growth. About 20.74 million passengers are transported by

the Singapore airlines on a yearly basis. Over 60 percent of import and export activities are
regulated by the airline industry which serves as one of the best drivers of economic growth
(Wirtz & Heracleous, 2016). Capital and modern technologies are transmitted from one country
to another which shows a positive spillover effect on business. The airline company provides
employment opportunities to over 14,729 million jobs globally in the areas where Singapore
airlines operate. Expansion in India will further raise the employment opportunities for the
people.
Airline industry leads to the creation of airport cities due to increase in commercial
activities. These commercial activities gives a newer perspective to the retail industry as it helps
them to earn greater profits with respect to several policies and outcomes (Faisal, Fithriani, &
Achmad, 2019). The evolution of airport cities across the regions helps in the provision of 2.7
million jobs by spending the industry employees. This helps in improving the living standards
and lead to a rise in aggregate income which increases the annual GDP. This helps is facilitating
economic growth of the economics and acts a prime driver in the developed or developing
nations (Endo & Ozaki, 2019). Moreover, the expansion of business activities will help in the
extraction of enormous profits and boost the economic well-being. Thus, the way of creating
enormous profits is by understanding its impacts on the economy and adequately improving its
operations if there are negative externalities (Heshmati & Kim, 2016). This acts as a way of
creating enormous profits to the firms which has a positive spillover effect on the operations of
other industries. This will improve the GDP value Singapore as it operates from Singapore.
Along with this, Singapore airlines has taken several initiatives to lower the carbon footprint by
changing infrastructure, providing green and providing green package flight for people that has
the efficiency of using biofuels instead of traditional jet fuel.

Figure 1: Impact of carbon-based policies
Source: (Kwonaet al., 2019)
Figure 1 shows that the carbon based strategies has effectively raised the social marginal
cost curve (SMC) which shows a rightwards shift from the private marginal cost curve (PMC)
which lowers the costs of the airlines and raises quantity. Therefore, expansion of business in
India will be profitable if the company continue to use fuel efficient techniques. Several actions
has been taken against the emissions derived from airplane operations in correspondence to fuel
efficient techniques, usage of cooking oil and conventional jet fuel and providing the world first
green package flights.

6.2 Consumption
The consumption or usage of air travel creates negative externality to the environment.
The aviation industry generates over 2 percent of all human induced carbon dioxide. Thus,
expansion of airline will further raise the carbon footprint which is major environmental issue
among people. Singapore airlines is continuously upgrading its sustainability efforts by cutting
down on plastic usages, food wastage and sustainably sourced ingredients in meals on board
(Kumar, & Rao, 2019). They are focusing on the creation of enormous profits for arranging the
economic profits by changing sustainable management programs that will safeguard the quality
of environment. However, airplane emissions is leading to rising pollution that triggers breathing
problems and frequency of asthma attacks which might as well leads to several heart diseases
(Zentner, 2016).
The company has introduced new data analytics that will lower the flight food wastage. It
has also collaborated with indoor vertical farm program of AeroFarm that helps to uphold the
concept of ‘From Farm to Plane’ by supporting the local farming communities. Active steps are
taken fir food packing and food consumption wastage that drives a part of negative externality
created as per the wastage. It is changing all the plastic packaging and brining more digital
alternatives. They are also trying to take new initiatives by printing children’s coloring books
and activity kits with soy based ink which is eco-friendly. Food waste is minimized by the
introduction of a technology that predicts the consumption patterns of customers. The goal of
Singapore airlines is to lower carbon footprint by giving a greater focus on sustainability issues
and environmental friendly practices (Heshmati & Kim, 2016).
Although the effect of carbon-dioxide emissions are effectively based on the altitude at
which the airplane is flying. Measures are taken by the airline company to fly over 37,000 feet

that does not damage the ozone layer when flying over high pressure zones which is crucial for
protecting the environment. Along with this, it creates a cleaner environment for the passengers
that has enabled them to make a global recognition for the usage of biofuels for operation
(Miranda & Oliveira, 2018). Moreover, emission of nitrogen oxide helps in the formation of
ozone that is adequate for restoring the environmental regulations by effective means. Thus,
consumption of the good crates a negative externality in general. Yet, Singapore airlines has
been taking active measures in combating the issue of waste and emissions that is harmful for
economy.
6.3 Business Variability in the long run
Singapore airlines has been globally recognized due to its effective performance and has
a good reputation. It has received greater amounts of economic profits in the past two years
(Syukron, 2017). The net income and operating income has actively increased in 2019, showing
its revenue growth. It is captured by a strong demand that has effectively increased its operations
in major economies. The company may not generate profits in short run due to new cost of
operations and provision of greater flights on a daily basis although the number might vary as per
pick or lean seasons and week offs (Baxter, & Srisaeng, 2018). However, in the long run demand
will effectively increases as demand for air travel operations has actively increased for Srilankan
airlines in India. Moreover, it is regulating its consumption practices by lowering the negative
externalities that will generate greater demand. Expansion of operations in major business cities
like Kolkata, Delhi, Kochi, Thiruvananthapuram, Mumbai, Bengaluru, Karnataka, Coimbatore
and Vizag respectively will raise the sales in the long run if it operates effectively by providing
quality services to the customers. Profits generated from India has been huge in the past three
years that has led to rising profits and so it is expected that Singapore airlines will have

enormous profits in long run due to its expansion in India. Moreover, trade operations will
increase that will raise demand for Singapore Airlines in the long run.