Singapore Airlines 2004 Annual Report Download - page 105

103
SIA Annual Report 03/04
Notes to the Financial Statements
31 March 2004
31 Capital and Other Commitments (in $ million) (continued)
(b) Operating lease commitments (continued)
Property and equipment
The Group has entered into operating lease agreements for office and computer equipment and leasehold land and
buildings. These non-cancellable leases have lease terms of between 2 to 20 years.
Future lease payments under non-cancellable operating leases are as follows:
The Group The Company
31 March 31 March
2004 2003 2004 2003
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Within one year 14.9 11.3 11.1 7.1
After one year but not more than five years 20.7 17.3 7.3 5.8
More than five years 39.2 38.6 – –
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
74.8 67.2 18.4 12.9
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
As lessor
Aircraft
The Group has entered into commercial aircraft leases. These non-cancellable leases have remaining lease terms of
between 2 and 5 years. The lease rental is fixed throughout the lease term.
Future minimum lease payments receivable under non-cancellable operating leases are as follows:
The Group The Company
31 March 31 March
2004 2003 2004 2003
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Within one year 62.5 30.2 48.4 30.2
After one year but not more than five years 116.4 93.7 95.7 93.7
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
178.9 123.9 144.1 123.9
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
(c) Other commitments
In 2002-03, SATS and two of its wholly-owned subsidiary companies entered into a lease agreement with a United
States lessor, whereby the subsidiary companies sold and leased back certain fixed ground support equipment with
net book value of $159.7 million. The gain arising from this sale and leaseback transaction is deferred and
amortized over the lease period of 18 years commencing October 2002. Under the terms of the agreement, the
subsidiary companies prepaid to the lessor an amount which is equivalent to the present value of their future lease
obligations. SATS has guaranteed the repayment of these future lease obligations, and accordingly has become the
primary obligor under the lease agreement.
32 Contingent Liabilities (in $ million)
Flight SQ006
On 31 October 2000, Flight SQ006 crashed on the runway at the Chiang Kai Shek International Airport, Taipei en route
to Los Angeles. There were 83 fatalities among the 179 passengers and crew members aboard the Boeing 747 aircraft.
On 26 April 2002, the Taiwan Aviation Safety Council released its final investigation report on the accident. Whilst the
full implications of these conclusions and recommendations are still being deliberated, the Company is currently a
defendant in a number of lawsuits commenced by passengers or their next of kin relating to the crash. It maintains
substantial insurance coverage and the Company has received professional advice that this cover will be sufficient to
cover the claims arising from the crash. Accordingly, the Company believes that the resolution of the claims arising from
the crash will have no material impact on its financial position.
Flight MI 185
The various cross suits filed by Boeing and the component part manufacturers against the Company arising from the MI
185 crash have been dismissed.
With the dismissal of the above suits, all outstanding claims against the Company arising from the MI 185 crash have
been dealt with. There was no financial impact on the Company as the matter was fully covered by insurance.