Singapore Airlines 2007 Annual Report Download - page 132

NOTES TO THE FINANCIAL STATEMENTS
31 March 2007
Singapore Airlines 130 Annual Report 2006-07
33 Capital and Other Commitments (in $ million) (continued)
(b) Operating lease commitments (continued)
As lessor
Aircraft
The Group has entered into commercial aircraft leases. These non-cancellable leases have remaining lease terms of
between 17 and 61 months. The lease rental is fi xed throughout the lease term.
Future minimum lease receivable under non-cancellable operating leases are as follows:
The Group The Company
31 March 31 March
2007 2006 2007 2006
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Not later than one year 39.6 14.4 – 0.8
Later than one year but not later than fi ve years 112.5 19.3 – –
Later than fi ve years 2.2 – – –
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
154.3 33.7 – 0.8
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
(c) Other commitments
In 2002-03, SATS and two of its wholly-owned subsidiary companies entered into a lease agreement with a United
States lessor, whereby the subsidiary companies sold and leased back certain fi xed ground support equipment with
net book value of $76.2 million (2006: $93.4 million). The gain arising from this sale and leaseback transaction
is deferred and amortised over the lease period of 18 years commencing October 2002. Under the terms of the
agreement, the subsidiary companies prepaid to the lessor an amount, which is equivalent to the present value of
their future lease obligations. SATS has guaranteed the repayment of these future lease obligations, and accordingly
has become the primary obligor under the lease agreement.
The Group and the Company have outstanding commitments to subscribe for shares in associated companies. Such
commitments aggregated $34.6 million (2006: $58.7 million) for the Group and $27.3 million (2006: $27.3 million) for
the Company.
34 Contingent Liabilities (in $ million)
Flight SQ006
There were 83 fatalities among 179 passengers and crew members aboard the Boeing 747 aircraft, Flight SQ006 that
crashed on the runway at the Chiang Kai Shek International Airport, Taipei en route to Los Angeles on 31 October 2000.
With the exception of one outstanding passenger claim, all the other lawsuits relating to the crash that were commenced
against the Company by both the crew members and the other passengers or their next-of-kin have been settled. These
claims are covered by the insurance coverage maintained by the Company and therefore have no material impact on its
fi nancial position.
Investigations by competition authorities
SIA Cargo, a wholly-owned subsidiary of the Company, is one of several airlines to have received notice of criminal and/
or regulatory investigations by competition authorities in the US, EU, Switzerland and New Zealand regarding whether
surcharges, rates or other competitive aspects of air cargo service were lawfully determined. The Company and SIA
Cargo are cooperating with the investigations. Neither the Company nor SIA Cargo has at this point been charged with
any wrongdoing.
After the investigations commenced, civil class-action suits were fi led in the US, Canada and Australia by external parties
against several airlines, including the Company and SIA Cargo. These cases are in procedural stages and none has been
tried thus far.
As the investigations by the competition authorities are still ongoing and the civil class-action suits have neither been
tried nor have damages been quantifi ed, it is premature to make a determination regarding whether the investigations
or civil suits can be regarded as contingent liabilities and, therefore, no provision has been made in the accounts.