Singapore Airlines 2001 Annual Report Download - page 40

38 SIA annual report 00/01
Financial Review
EXPENDITURE (continued)
Inflight meals and other passenger costs were $1 million (+0.1% ) higher as the increase in inflight meal costs due to increased number
of meals uplifted (with passenger load up 8.2% ) and higher unit cost of meals, were partially offset by the stronger Singapore Dollar
and lower expenditure on aircraft catering equipment.
Depreciation charges dropped $63 million (-5.6% ) mainly because of reductions in depreciation charges from (i) the full year’s impact of
the sale and leaseback of three B747-400s in 1999-00, and the sale and leaseback of two B747-400s in 2000-01, (ii) nine B747-400s
and four A310-300s which became fully depreciated to their residual values, (iii) the loss of the B747-400 passenger aircraft involved in
the SQ006 accident in Taipei. These were partially offset by (i) the commissioning of two B747-400s, one B777-200, and one B747-400
freighter aircraft during 2000-01, (ii) the full year’s impact of three B777-200s, one B777-300, one A340-300 and one B747-400
freighter aircraft commissioned in 1999-00.
Rentals on lease of aircraft went up $60 million (+26.4% ) mainly on account of (i) the sale and leaseback of two B747-400 aircraft
during the year, (ii) the full year’s impact of sale and leaseback of three B747-400 aircraft in 1999-00, and (iii) the stronger US Dollar.
The sum of depreciation charges and rentals on lease of aircraft decreased $3 million (-0.2% ).
Aircraft maintenance and overhaul costs dropped $38 million (-7.3% ) despite an increase in flying hours of 5.1% . This was mainly
attributable to the writeback of overprovision for maintenance costs in prior years.
The decrease in other costs of $28 million (-5.3% ) came principally from lower exchange loss of $19 million in 2000-01 against an
exchange loss of $75 million in 1999-00, partially offset by (i) provisions for diminution in value of investments ($24 million) in respect
of SIA’s investments in convertible preference shares of Air Canada, and in the Ritz-Carlton, Millenia, Singapore Properties Private
Limited, and (ii) higher communication expenses (+$6 million).
The movement in Singapore Dollar year-on-year against foreign currency expenditure resulted in an increase in expenditure of $1 million
in 2000-01.
Company Expenditure Composition
2000/01
21.4%
16.3%
12.8%
5.8%
5.9%
6.0%
6.3%
10.8%
11.2%
3.5%
1999/00
6.6%
6.5%
6.9%
7.0%
11.2%
11.5% 3.1%
14.9%
16.1%
16.2%
2000/ 01 1999/ 00 Change
$M % $M % %
■■■■ Fuel costs 1,767 21.4 1,210 16.2 + 46.0
■■■■ Staff costs 1,347 16.3 1,202 16.1 + 12.1
■■■■ Depreciation charges 1,055 12.8 1,118 14.9 - 5.6
■■■■ Rentals on lease of aircraft 289 3.5 229 3.1 + 26.4
■■■■ Sales costs (Note 1) 926 11.2 866 11.5 + 6.9
■■■■ Handling charges 891 10.8 839 11.2 + 6.3
■■■■ Inflight meal and other
passenger costs 520 6.3 519 6.9 + 0.1
■■■■ Landing, parking and
overflying charges 498 6.0 484 6.5 + 2.7
■■■■ Aircraft maintenance and
overhaul costs 483 5.9 521 7.0 - 7.3
■■■■ Other costs (Note 2) 470 5.8 498 6.6 - 5.3
8,246 100.0 7,486 100.0 + 10.2
Note 1:- Sales costs include commissions and incentives payable, frequent flyer programme costs and
advertising expenses.
Note 2:- Other costs comprise departmental expenses ($187M), crew expenses ($103M ), company
accommodation costs ($89M), communication expenses ($48M), provisions for diminution in value of
investments ($24M), and loss on exchange ($19M).