Economic
Since airlines operate across national economic boundaries, and given their
level of resource intensity, they are subject to the vagaries of national, and the
international economy. One major economic threat to Singapore Airlines’ process is
the growth in fuel costs. Political unrest in the Middle East, exemplified by the so called
‘Arab Spring’ of 2011 has helped to bring oil prices to unprecedented levels
(Hakimian 2011), which is directly, and negatively impacting airlines’ fuel costs. Some
airlines have opted to pass these increased costs on to customers, but given that
Singapore Airlines already utilises a premium pricing strategy, there may be limits to
the extent to which it can adopt such a strategy.