Singapore Airlines 2003 Annual Report Download - page 25

23SIA Annual Report 02/03
Singapore Airport Terminal Services
(SATS)
It was a year of expansion, acquisition
and enhancement for SATS, despite the
uncertain international climate. It acquired
its sixth operating subsidiary in October
2002, taking a 57.1 per cent stake in
Singapore-owned Country Foods and
increasing this shareholding to 66.67 per
cent in March 2003. The acquisition is SATS’
first step toward diversifying revenue streams
in non-airline related businesses.
In July, joint venture company Evergreen Air
Cargo Services Corporation (EGAC) officially
opened its new airfreight terminal at
Chiang Kai Shek International Airport,
Taiwan. SATS increased its shareholding in
EGAC from 20 per cent to 25 per cent in
February 2003.
During the year in review, six new airlines
were signed up as clients for ground
handling and catering services: Hainan
Airlines, Xiamen Airlines, Australian Airlines,
Swiss Air Lines, Air Macau and Pacific
Airlines. SATS also began operating Qantas'
Regionalised Load Control Centre at
Singapore Changi Airport. This facility
controls weight and balance operations for
Qantas flights in parts of Europe.
Meanwhile, as part of its drive to maximize
the efficiency of its capital assets, SATS
conducted a US$237.5 million sale and
leaseback program of ground handling and
inflight catering equipment. And through
the skills of its staff, SATS won a record haul
of 552 Excellent Service Awards from the
Standards, Productivity and Innovation
Board, SPRING Singapore, the largest
number ever awarded to the staff of a single
organization.
SIA Engineering Company (SIAEC)
In June 2002, SIAEC exercised an option to
increase its stake in Singapore-based Rohr
Aero Services – Asia Pte Ltd (RASA) from
30 per cent to 40 per cent. A joint venture
between SIAEC and Goodrich Corporation,
RASA provides aerostructure repair and
overhaul services to more than 48 airlines
in the Asia-Pacific region.
In July 2002, construction started on
RASA’s new US$13.5 million facility which,
at 22,000 square metres, will be twice the
size of the existing facility. Its state-of-the-
art equipment will include the largest
'Autoclave' heat-treatment machine in Asia.
In July, SIAEC and PT Jasa Angkasa Semesta
(PT JAS) signed a Memorandum of
Understanding to provide aircraft line
maintenance and technical ramp handling
services at Indonesia’s major airports.
PT JAS provides ground-handling and flight
operations despatch services to more than
28 international and domestic airlines
operating at Indonesia’s major airports,
including Jakarta, Denpasar, Surabaya and
Medan. SIAEC will own 49 per cent of the
joint venture and PT JAS, 51 per cent.
New customers for line maintenance
included Australian Airlines, Pacific Airlines,
Air Macau, Orient Thai, Xiamen Airlines and
Gemini Air Cargo. As part of a strategy to
develop synergies with aircraft leasing
companies, an open-ended contract was
signed with Singapore Aircraft Leasing
Enterprise in July for the provision of aircraft
maintenance, inspection and modification.
A similar agreement was signed with
Australia-based Ansett Worldwide Aviation
Services (AWAS) in November.
The value of such joint ventures to SIAEC
is amply illustrated in its contribution to the
SIAEC profit. In FY2002/03, SIAEC derived
32.9 per cent of its pre-tax profit from its
share of profits of its associate companies.