Singapore Airlines 2003 Annual Report Download - page 51

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Expenditure (continued)
Sales costs increased $45 million as (i) more agents achieved their sales targets in 2002-03 compared to the previous
year, when many failed to meet targets due to the after-effects of September 11, 2001; (ii) higher frequent flyer
programme costs were incurred after the Company joined new programs (Emirates and Asiana Airlines); and (iii) higher
fees were paid to distribution systems. The increase was cushioned by a write-back of provision for doubtful debts.
Expenditure on fuel was $42 million higher because of:
$ million
9.9% rise in average price from 74.73 US¢/AG in 2001-02 to 82.16 US¢/AG + 144
4.2% increase in volume uplifted from 1,034.1 M AG in 2001-02 to 1,077.2 M AG + 58
1.6% weakening of USD against SGD from S$1.8030 in 2001-02 to S$1.7749 – 24
+ 178
Hedging gain compared to a loss in 2001-02 – 136
+42
49
SIA Annual Report 02/03
Financial Review
Company Expenditure Composition
R1 The corporatization of SIA Cargo took effect from 1 July 2001. Figures for 2001-02 were restated to exclude cargo operations for April to June 2001.
R2 Sales costs included commissions and incentives payable, frequent flyer programme costs and advertising expenses.
R3 Communication and information technology costs were for data transmission and contract service fees, hire of computer equipment, maintenance/rental
of software, information technology contract and professional fees.
R4 Other costs comprised crew expenses, company accommodation costs, loss on exchange, comprehensive aviation insurance, departmental expenses
such as airport lounge expenses, non-information technology contract and professional fees and SIA Engineering recharges, expenses on non-
scheduled services, aircraft licence and recoveries.
Fuel costs
Staff costs
Aircraft maintenance and overhaul costs
Depreciation charges
Handling charges
Sales costs R2
Inflight meal and other passenger costs
Landing and parking fees
Rentals on lease of aircraft
Communication and information
technology costs R3
Other costs R4
2002-03 2001-02 Change
$ million $ million% % $ million %
(Restated)R1
10.8%
2001 - 02
4.0%
21.2%
16.0%
1.9%
6.6%
7.4%
8.3%
9.8%
3.6%
10.4%
7.9%
19.4%
18.0%
4.2%
1.9%
6.1%
6.7%
9.2%
3.9%
11.2% 11.5%
2002 - 03
1,523.1
1,409.7
902.8
882.7
719.0
618.5
521.5
478.6
303.1
150.4
328.6
7,838.0
19.4
18.0
11.5
11.2
9.2
7.9
6.7
6.1
3.9
1.9
4.2
100.0
1,481.0
1,119.6
725.6
754.1
684.7
573.7
511.0
463.4
253.9
131.6
278.0
6,976.6
21.2
16.0
10.4
10.8
9.8
8.3
7.4
6.6
3.6
1.9
4.0
100.0
+
+
+
+
+
+
+
+
+
+
+
+
2.8
25.9
24.4
17.1
5.0
7.8
2.1
3.3
19.4
14.3
18.2
12.3
+
+
+
+
+
+
+
+
+
+
+
+
42.1
290.1
177.2
128.7
34.3
44.7
10.5
15.2
49.2
18.8
50.6
861.4