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59
Singapore Airlines Annual Report 05/06
Performance of Subsidiary Companies (continued)
SilkAir
2005-06 2004-05
R1
$ million $ million % Change
Total revenue 344.7 295.5 + 16.6
Total expenditure 331.6 272.6 + 21.6
Operating profit 13.1 22.9 – 42.8
Profit after taxation 20.6 30.0 – 31.3
R1 Financial results for 2004-05 have been restated to account for share options to employees in compliance with Financial Reporting Standards (FRS) 102.
Previously, share options to employees were not charged to the profit and loss account.
SilkAir’s revenue grew $49 million (+16.6 per cent) to $345 million as a result of increased load (+15.0 per cent) and better yield
(+3.2 per cent). The increase in expenditure (+$59 million) was principally due to higher fuel costs, with increases also incurred for
handling charges, depreciation of aircraft, aircraft and maintenance overhaul expenses and inflight meals. These increases were
partially offset by lower aircraft license and insurance costs. As a result, operating profit declined by 42.8 per cent (-$10 million).
Lower tax expense (-$6 million) partially offset by lower surplus on disposal of aircraft, spares and other fixed assets
(-$5 million) resulted in a smaller decline of 31.3 per cent in profit after tax.
Unit cost rose 8.5 per cent to 72.6 cents/ctk while yield improved 3.2 per cent to 138.7 cents/ltk. Consequently, breakeven load
factor deteriorated by 2.5 percentage points to 52.3 per cent.
Equity holders’ funds was $378 million (+6.2 per cent) at 31 March 2006.
Capital expenditure for the year of $114 million was mainly for delivery payment for one A320 and one A319 aircraft, and
pre-delivery payments for two A320 and one A319 aircraft, scheduled for delivery between 2006 and 2007.
SilkAir’s route network spanned 26 cities in 10 Asian countries. During the financial year, SilkAir added three new destinations
– Shenzhen (China), Surabaya (Indonesia), and Kota Kinabalu (Malaysia), and terminated its services to Padang, Hyderabad
and Fuzhou.
The airline plans to increase frequencies to Medan (from 11 times weekly to twice daily), Phuket (from three times daily to
four times daily), Xiamen (from daily to nine times weekly), and one additional flight weekly to Chengdu, Chongqing, Shenzhen,
Langkawi and Phnom Penh.
FINANCIAL REVIEW