Cost-effective service excellence: lessons from Singapore Airlines
Singapore Airlines is well known as a paragon of in-flight service. It is also a remarkably efficient and profitable airline and has been for decades. Loizos Heracleous, Jochen Wirtz and Robert Johnston explain how it combines service excellence with cost effectiveness.

Singapore Airlines (SIA) has achieved the Holy Grail of strategic success: sustainable competitive advantage. It has consistently outperformed its competitors throughout its 30-year history. In addition, it has always achieved substantial returns in an industry plagued by intermittent periods of disastrous under-performance (see Table 1).
Cost-effective service excellence: lessons from Singapore Airlines

SIA has done this by managing to navigate skilfully between poles that most companies think of as distinct – delivering service excellence in a costeffective way. SIA’s awards list is long and distinguished. In 2002 alone it won no less than 67 international awards and honours including “best airline” and “most admired airline” in the world in Fortune’s Global Most Admired Companies survey.
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Since Michael Porter’s influential suggestion that differentiation and cost leadership are mutually exclusive strategies and that an organisation must ultimately choose where its competitive advantage will lie, there has been fierce debate about whether a combined strategy can be achieved – and sustained over the longer term. SIA is proof that the answer to both these questions is positive. So, how does it consistently deliver premium service to demanding customers in an industry where both price pressures and customer expectations have been continually rising? In common with many other organisations with a reputation for providing excellent service, SIA has top management