SIA pushes on with reforms, ties up with Alibaba and works on brand overhaul

Singapore

AMID its ongoing transformation programme, Singapore Airlines (SIA) is turning its focus to a branding makeover, while seeking to sharpen its digital capabilities by partnering with e-commerce giant Alibaba.

According to a 23-page Request for Information (RFI) seen by The Business Times, the airline is carrying out a tender to bring onboard a creative agency and/or agencies to help in areas such as integrated strategy, branding, media, content, its website and app, as well as production.

"As we review our business to be future fit, we are likewise doing the same to ensure we are collaborating with the right external marketing partners so that they will play a strategic role throughout our transformation," SIA said in the brief, which was issued on Monday.

It is inviting agencies to deliver an integrated solution to "help cut through the changing marketing and communications landscape with impact" and to "elevate" the iconic brand. Among other things, the airline is looking at using more data-driven insights to shape its strategy, and is seeking "fresh perspective" on how the SIA brand should be modernised to stand out.

The tender will be carried out in two main phases, with short-listed applicants to pitch to the airline in December. Agencies, which are also allowed to pitch together as a consortium, are required to have at least one office in the airline's six regional hubs - namely South-east Asia, North Asia, Southwest Pacific, Europe, West Asia & Africa, and the United States. SIA currently works with creative partners such as TBWA and Publicis. In 2007, it parted ways with Batey Ads, which is credited with conceptualising the "Singapore Girl" ad campaign.

"In a new world where there are many other providers of premium service, SIA's strategy needs a revamp," said associate professor (Strategy & Policy) at NUS Business School, Nitin Pangarkar. "They need to be not just good, but great, to win." He pointed to areas for improvement on the digital front, such as enhancing their website and using data to drive sales.

Separately, SIA announced on Tuesday that it is joining hands with Alibaba in a move that will allow it to leverage the Chinese behemoth's digital expertise, while giving the airline access to over 600 million active mobile users on Alibaba's China retail marketplaces.*

The collaboration - which will focus on areas such as flight ticket sales, loyalty programmes, cloud services, payments and logistics - will see Alibaba units such as Fliggy (formerly travel service platform Alitrip), Alibaba Cloud, Alipay and logistics arm Cainiao Network roped in too.

In particular, both the premium airline and Alibaba will be able to garner customer insights in one of the world's fastest growing travel markets.

SIA's executive vice-president (commercial) Mak Swee Wah, said: "Enhancing our digital capabilities is one of our priorities. Through Alibaba Group's advanced digital assets and keen insights of Chinese consumer behaviour, we will be able to better understand the needs of our customers and develop more innovative travel solutions to help them explore the world."

Angel Zhao, president of Alibaba Global Business Group, added: "We have important capabilities and experiences to offer, based on valuable insights gained from serving the world's largest group of online consumers. The lessons we have learnt in helping to transform e-commerce and drive important initiatives, like new retail, will help drive our partnership with Singapore Airlines and provide our consumers with higher-quality global travel services."

In the works is a plan to extend Alipay beyond SIA's flight purchases to cover in-flight products and services, airport services as well as retail merchandise. Meanwhile, SIA will also work together with Alibaba Cloud to try and improve its own IT ecosystem, from web-hosting to apps and membership systems, as well as partner Cainiao to improve international air cargo services.

This comes as the airline combats a competitive operating environment in South-east Asia, with capacity from rivals such as the budget carriers and the Middle Eastern airlines putting downward pressure on yields, while rising oil prices are pushing costs upwards.

This prompted SIA to kick off its three-year transformation programme in May last year as it seeks to boost revenues, trim costs and streamline its organisational structure. So far, over 90 initiatives have been earmarked by the group.

In a New Year message in January, SIA chief Goh Choon Phong told staff that the airline group will prioritise beefing up its digital capabilities this year, through initiatives such as an in-house digital innovation unit and alliances with external partners.

Shares in SIA closed at S$9.73, up 17 cents, on Tuesday.