Singapore Airlines 2002 Annual Report Download - page 38

Download and view the complete annual report

Please find page 38 of the 2002 Singapore Airlines annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 116

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116

Financial Review
SIA Annual Report 01/02
38
Expenditure
In 2001-02, the Company’s expenditure was $7,283 million, down 1.0% (–$75 million) from the previous year.
The decrease was due to:
$M
Depreciation charges (–21.6%) R1 –208
Rentals on lease of aircraft (+10.3%) +25
Staff costs (–14.3%) –188
Sales costs (–16.1%) –120
Fuel costs (–2.9%) –47
Inflight meals and other passenger costs (–1.4%) – 7
Aircraft maintenance and overhaul costs (+75.3%) + 320
Communication, information technology (IT) and related expenses (+57.3%) + 61
Handling charges (+8.2%) +58
Landing, parking and overflying charges (+4.3%) +20
Other costs (+3.9%) +11
–75
R1 Excluding depreciation of computer equipment which is included as part of IT costs.
Depreciation charges were $208 million lower (–21.6%) because of (i) the change in aircraft depreciation rate, (ii) trade-in of seven A343s,
(iii) sale and leaseback of two B744s and one B777-200 in 2001-02, and (iv) the full year’s impact of the sale and leaseback of two
B744s in 2000-01. The commissioning of three B744s, five B777-200As, one B777-200, six B777-200ERs and two B777-300s during
the year and the full year’s effect of one B744 and one B777-200 delivered last year reduced the fall.
Rentals on lease of aircraft rose $25 million (+10.3%) on account of (i) the sale and leaseback of two B744s aircraft and one B777-200
during the year, (ii) the full year’s impact of sale and leaseback of two B747-400 aircraft in 2000-01, and (iii) the stronger USD. Lower
lease rentals for two B744s, as structured under the lease agreement, cushioned the increase.
The drop in staff costs of $188 million (–14.3%) was largely due to the absence of profit-sharing bonus this year compared with a
payment equivalent to 4.54 months in the previous year. There were also savings from nil provision in wage adjustment and wage cuts for
all staff. These reductions were partially negated by higher crew productivity allowances, larger staff strength, and increase in employer’s
Central Provident Fund contribution rate.
Sales costs decreased $120 million (–16.1%) mainly because commission, incentives and frequent flyer costs (FFP) were lower as a
result of a decline in passenger and cargo revenue. Expenditure on advertising was also curtailed.
Expenditure on fuel decreased $47 million (–2.9%) because of:
$M
18.2% drop in average fuel from 91.81 US¢/AG in 2000-01 to 75.11 US¢/AG –316
1.3% increase in volume of fuel uplifted from 1,059.6 M AG in 2000-01 to 1,073.2 M AG + 22
3.8% strengthening of USD against SGD from S$1.7369 in 2000-01 to S$1.8034 + 35
–259
Hedging loss compared to a gain in 2000-01 + 212
–47