Singapore Airlines 2013 Annual Report Download - page 172

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SINGAPORE AIRLINES
NOTES TO THE FINANCIAL STATEMENTS
36 Contingent Liabilities (in $ million)
(a) Flight SQ006
There were 83 fatalities among 179 passengers and crew members aboard the Boeing 747 aircraft, Flight SQ006, that
crashed at the Chiang Kai Shek International Airport, Taipei on 31 October 2000. All the claims have been settled by
insurers under the insurance policy procured by the Company.
(b) Cargo: Investigations by Competition Authorities and Civil Class Actions
In 2006 and thereafter, SIA Cargo and the Company were among several airlines that received notice of investigations
by competition authorities in the United States, European Union, Australia, Canada, New Zealand, South Africa, South
Korea and Switzerland as to whether surcharges, rates or other competitive aspects of air cargo service were lawfully
determined (the “air cargo issues”).
On 8 February 2011, SIA Cargo confirmed its acceptance of a plea bargain offered by the United States Department
of Justice (USD48.0 million or $62.5 million). This amount has been reflected as exceptional items in the Group’s
accounts in FY2010-11. The plea agreement has brought the Department of Justice’s air cargo investigations in the
United States to a close for SIA Cargo.
On 30 November 2010, the Korea Fair Trade Commission (“KFTC”) released an adverse decision against 21 air cargo
airlines, including SIA Cargo, in respect of fuel surcharges. A fine of KRW3.117 billion ($3.6 million) was imposed on
SIA Cargo. The fine was paid in January 2011 in accordance with Korean laws. This amount has been reflected as
exceptional items in the Group’s accounts in FY2010-11. SIA Cargo contested the validity of the KFTC decision and
filed an appeal before the Seoul High Court. In July 2012, the Seoul High Court rejected SIA Cargo’s appeal. SIA Cargo
has appealed the Seoul High Court judgment to the Supreme Court.
On 9 November 2010, the European Commission issued an adverse decision against 13 air cargo airlines, including
SIA Cargo and the Company, in respect of fuel surcharges, security surcharges and commissions on surcharges. A fine
of EUR74.8 million ($135.7 million) was imposed on SIA Cargo and the Company. SIA Cargo paid the fine in February
2011 in accordance with European Union laws. This amount has been reflected as exceptional items in the Group’s
accounts in FY2010-11. SIA Cargo and the Company have filed an appeal to the European General Court seeking
annulment of the decision.
In July 2010, SIA Cargo was among eight airlines to receive notification that the Competition Commission of South
Africa had referred a complaint to the South Africa Competition Tribunal in respect of fuel surcharges. In August 2012,
the Competition Commission of South Africa sent a notice withdrawing the complaint referral as concerns SIA Cargo
and the Company. This step ended the proceedings in South Africa as concerns SIA Cargo and the Company.
In December 2012, SIA Cargo confirmed its acceptance of settlement agreements with the Australian Competition and
Consumer Commission and the New Zealand Commerce Commission, bringing to an end civil penalty proceedings
concerning the air cargo issues which had been initiated in 2008. SIA Cargo agreed to pay a penalty and costs amount
of AUD12.2 million ($15.5 million) in Australia. In New Zealand, SIA Cargo agreed to pay a penalty and costs amount
of NZD4.4 million ($4.4 million). SIA Cargo paid these amounts in December 2012 and January 2013 in accordance
with Australian and New Zealand laws respectively. The total Australian and New Zealand settlement amount of $19.9
million has been reflected in the exceptional items of the Group’s accounts.
31 March 2013