Singapore Airlines 2012 Annual Report Download - page 76

074 SINGAPORE AIRLINES
Financial Review
Performance of the Company (continued)
Expenditure
The Company’s expenditure increased 9.2 per cent to $11,889 million in 2011-12.
฀ ฀ ฀ ฀ 2011-12฀ ฀ 2010-11฀ ฀ ฀
฀ ฀ ฀ ฀ $฀million฀ %฀ $฀million฀ %฀ %฀฀Change
Fuel costs 4,868.8 40.9 3,805.1 35.0 + 28.0
Staff costs 1,495.4 12.6 1,549.5 14.2 - 3.5
Depreciation R7 1,324.6 11.1 1,416.0 13.0 - 6.5
Handling charges 831.2 7.0 802.9 7.4 + 3.5
Inflight meals and other passenger costs 595.1 5.0 560.3 5.2 + 6.2
Airport and overflying charges 559.7 4.7 514.9 4.7 + 8.7
Aircraft maintenance and overhaul costs 553.7 4.7 504.9 4.6 + 9.7
Rentals on leased aircraft 510.2 4.3 525.6 4.8 - 2.9
Sales costs R8 497.8 4.2 556.3 5.1 - 10.5
Communication and information technology costs R9 91.1 0.8 86.5 0.8 + 5.3
Other costs R10 561.9 4.7 565.8 5.2 - 0.7
Total 11,889.5 100.0 10,887.8 100.0 + 9.2
A breakdown of fuel cost is shown below:
2011-12฀ 2010-11฀ ฀ Change
$ million $ million $ million
Fuel cost (before hedging) 4,888.7 3,755.2 + 1,133.5
Fuel hedging (gain)/loss (19.9) 49.9 - 69.8
4,868.8 3,805.1 + 1,063.7
Expenditure of fuel before hedging was $1,134 million higher because of:
$ million
31.8% increase in weighted average fuel price from 100.4 USD/BBL to 132.3 USD/BBL + 1,254.1
4.6% increase in volume uplifted from 28.2 million BBL to 29.5 million BBL + 168.4
Weakening of USD against SGD - 289.0
+ 1,133.5
Staff costs saw a drop of $54 million (-3.5 per cent), largely from lower provision for profit-sharing bonus as a result of the
weaker operating performance.
Depreciation reduced $91 million (-6.5 per cent) mainly from lower depreciation of heavy maintenance visits (HMV) and
engine overhauls (EOH) with the sale of three B747-400 and two B777-200 aircraft and the return of four B777-300, three
B747-400 and one B777-200 aircraft to lessors on expiry of the leases during the financial year.
Sales costs decreased $58 million (-10.5 per cent) primarily due to lower commission and incentives as more stringent criteria
were set for the incentive schemes this year.
R7 Depreciation included impairment of property, plant and equipment and amortisation of computer software.
R8 Sales costs included commission and incentives, frequent flyer programme cost, computer reservation system booking fees, advertising expenses
and other sales costs.
R9 Communication and information technology costs were for data transmission and contract service fees, hire of computer equipment, maintenance/
rental of software, and information technology contract and professional fees.
R10 Other costs mainly comprised crew expenses, company accommodation cost, foreign exchange revaluation and hedging loss, comprehensive
aviation insurance cost, airport lounge expenses, non-information technology contract and professional fees, expenses incurred to mount non-
scheduled services, aircraft licence fees and recoveries.