nated travel agent. The travel agents often forms large amount of ticket sales, this gives certain power to the travel agents and airline would generally gives some percentage of commission to them for ticket sales. A zero commission policy by SIA had cause boycott of sales of SIA tickets by travel agents who consist of 80% total sales volume in India, forcing the company to reduce flight and down sized in India [Chowdhury, 17 Apr 2009]. The buyer bargaining power is indeed very high for SIA.

4.5 Bargaining power of suppliers

SIA have its own subsidiary Singapore Airport Terminal Service for ground handling service such as baggage handling and in-flight food and beverages supply. SIA’s other subsidiary SIA Engineering had been engage in aircraft maintenance and servicing. SIA are also financially strong hence does not depends heavily on financial institution for business process. This leaves the main suppliers of SIA only air craft manufacturer. Jet fuel, even though form up to 40% of the airline expenditure (as of year 2008), is a commodity that fluctuate with crude oil price.

The airline mainly purchases its plane from Boeing and Airbus. Although there were no apparent substitute and high retraining and logistic cost will incur for switching of supplier, the demand is relatively weak for these suppliers in recent years with about 10% of the world’s fleet in storage [Calingo, 1997]. SIA had been continuously renewing its fleet even during peak of crisis which gives sales order that helps aircraft manufacturer pull through financial difficulty [Scott, 2008]. The average age of aircraft is 6year and 2month in 2008; signal a large volume of purchase on its aircraft, with planed spending of SGD 11,800million in the next five year on aircraft. It is Boeing largest customer on 777 series plane [Boeing, 25th Aug 2004] and first customer for Airbus 380. This makes SIA an important customer and enjoys high bargaining power over the manufacturer.

4.6 Relative power of Other Stakeholders