servicing still require personnel to be present. In general, SIA have a medium to low treat on substitute of products or services.

4.4 Bargaining power of buyers

The airline industry had been commoditise over the years, with objective of getting from one point to another, it doesn’t make a lot of difference on which airline they choose, this is true especially for long to medium haul flight. As the air space deregulate, for example, the recent deregulation of Singapore-Malaysia air route had prompt an influx of other carrier such as Firefly and Air Asia to the market SIA and MAS (Malaysia Airlines System) once hold monopoly.

The passengers in the airline industry consist of business traveller and discretionary traveller. Discretionary travellers are quite flexible on the time and flight connections, cost is a main concern for them. Business traveller are not so sensitive about price, instead short travelling time and comfortable journey are priority for them. All of them would not hesitate to switch airline if price and timing matched their interest. Kris flyer program, a frequent flyer program which accumulates free air miles with other incentive such as gives admission to exclusive airport lounge and priority boarding had been promote to retain customer’s loyalty.

Most of these traveller approach travel agents for purchasing of tickets, some business traveller even appoint a designated 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.