2.1. Political- legal factors
As pursuing to develop globally, Singapore Airlines has to consider political factors in Singapore market and other countries as well. This consideration is seen as the critical element for their expanding internationally strategy and decisions.
Fortunately, Singapore Airlines receives tremendous support from the Singapore Government in terms of tax, fuel as their main shareholder is Government of Singapore (Lacar, F. 2004). Moreover, Singapore Airlines has more advantages than their competitors in terms of profit as the general tax for firms in Singapore is more favorable than in other countries. For example, Delta Airlines has to be subjected 35% corporation tax in America while British Airway as well as Japan Airlines has to pay 30% corporation tax in England and Japan, respectively in comparison with 20% corporation tax that Singapore Airlines pays in Singapore (Nation Master).
Additionally, aviation government regulations must be taken into consideration when Singapore Airlines expand their business overseas. In the past, Singapore Airlines has withdrawn its bid for a stake in Air India as a political barrier in India. In 2005, Singapore Airlines was very difficult to be approved by Australian Government to invest S$12 million into the Australia market where dominant by Qantas and United Airlines (Bandt, 2005).
In airline industry, the term airlines freedom refers to the airspace of each country which allows for whether landing or not. The agreement of landing right is discussed at the national level between the governments at trades meeting. Today, skies policies are opening and continuing to be deregulated which create more opportunities for Singapore Airlines. However, the process of reducing the government regulations is a threat for them to maintain their business in Singapore.