“Way smarter”: Valuair in the budget airline industry

• Main Author: FAN, Terence
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2013
• Subjects: Strategic Management; Marketing; Budget Airlines; Airline Industry in Southeast Asia; and Investment Decisions; Business Administration, Management, and Operations; Strategic Management Policy
• Online Access: https://ink.library.smu.edu.sg/cases_coll_all/60; https://cmp.smu.edu.sg/case/3411
• Institution: Singapore Management University

By 2004, the low-cost carrier model had just recently been introduced to Southeast Asia. Airlines under this model quickly began taking market share. Singapore’s first budget carrier, Valuair, finds itself in fierce competition between two rapidly emerging competitors in the second half of 2004. Valuair needs to expand in order to remain competitive. However, for this to happen the company needs additional access to capital. The CEO, Sim Kay Wee, has begun pitching to investors that his company is a smart low-risk investment. Is Sim right, given Valuair’s competitive position and the market environment in which it operates?