orce companies around the globe to engage in cost cutting measure, hitting the airline industry hard with estimated 11billion loss in 2009 and 4billion loss in 2010. The Asia pacific region has post more positive growth of 2.1% as compare with the rest of the world that are still in reds [26th Oct 2009, Macinnis].

Most of these carriers are using differentiation strategy approach which concentrates mainly on booking service and in-flight offering. Frequent flyer programme were also introduced by these airline to retain customer and generate brand loyalty. On the marketing side, most of these airlines are member of strategic alliance like Star alliance and Skytrex, and have code share system with other partner airlines to enhance flight connection and extend route network. However, SIA have so far strive in its offering and are reputable of provide excellence in-flight service and innovative entertainment system. All the above had made SIA face lesser stress in competition, however the industry is still in very fierce competition giving the circumstances and SIA would lose out if it fail to maintain its high quality of services. The level of rivalry is medium.

4.3 Threat of a substitute products or services

SIA had target business traveller that emphasis on comfort and time when travelling and are less cost conscious, this have made other mode of transport a poor substitute for SIA, especially on medium and long haul flight. However technology advancement have evolve new treat. As discuss on previous section, video conferencing as a means of meeting relinquish the requirement for business travelling hence post serious treat as substitute to the whole airline industry. With technology advance, high quality video conferencing are able to be done at low capital investment of USD 18,500 and low maintenance fee [Calingo, 1997]. New feature had been introduce, such as sharing of files, computer screen, recording while doing video conferencing have made video conferencing to be near equal to face-to-face meeting. Although video conferencing forms a good substitute for meetin