Singapore Airlines 2008 Annual Report Download - page 147

Singapore Airlines Annual Report 2007-08
145
36 Contingent Liabilities (in $ million)
(a) 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 financial position.
(b) Cargo: Investigations by competition authorities
SIA Cargo is one of several airlines to have received notice of criminal and/or regulatory investigations by competition
authorities in the US, European Union (“EU”), Switzerland, Australia and New Zealand regarding whether surcharges,
rates or other competitive aspects of air cargo service were lawfully determined. These investigations remain ongoing.
SIA Cargo is cooperating in relation to these inquiries concerning air cargo services.
In addition to the aforesaid notices, SIA Cargo is amongst numerous airlines to have received a Statement of
Objections (“SO”) from the European Commission (“EC”). The SO sets out the EC’s preliminary view of its case against
the airlines with respect to alleged competition law infringements but does not prejudge the outcome. No fine amount
is mentioned in the SO. SIA Cargo and the Company provided their written response to the SO on 21 April 2008.
After the investigations commenced, civil class-action suits were filed in the US, Canada and Australia by external
parties against several airlines, including SIA Cargo.
These cases still remain in their respective procedural stages and none have been tried thus far on their respective
substantive legal merits.
As the EC’s case is still in an early stage, the investigations by the competition authorities in other jurisdictions are still
ongoing and the civil class-action suits have neither been tried on their respective substantive legal merits nor have
damages been quantified, 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.
(c) Passengers: Civil actions in the US
Singapore Airlines and several airlines have been named in civil anti-trust class action law suits in the US alleging an
unlawful agreement to fix surcharges on transpacific flights to and from the US. These cases are currently in procedural
stages and none have been tried so far.
As these civil anti-trust class-action law suits have neither been tried nor the damages quantified, it is premature
to make a determination regarding whether the civil class-action suits can be regarded as contingent liabilities and
therefore no provision has been made in the accounts.
(d) Australian travel agents’ representative actions
A former Australian travel agent, Leonie’s Travel Pty Limited, filed a representative action in the Federal Court of
Australia (New South Wales District Registry) on 15 December 2006 naming seven respondents (viz., International Air
Transport Association (“IATA”), Qantas Airways Limited, British Airways plc, Air New Zealand Limited, Singapore Airlines
Limited, Malaysian Airline System Berhad, and Cathay Pacific Airways Limited) in a claim on behalf of Australian travel
agents for alleged non-payment of commissions on fuel surcharges applied to passenger tickets issued in Australia
from May 2004 onwards. In May 2007, the applicant’s solicitors filed a fresh similar representative application on
behalf of Paxtours International Travel Pty Ltd, another Australian travel agent, against Singapore Airlines and Cathay
Pacific Airways Limited. Singapore Airlines denies the claims and, along with each of the named airlines, is defending
the actions.
The cases have not reached trial and preliminary procedural matters are currently under consideration.
(e) SIA (Mauritius) Limited pilots’ cases in the United Kingdom (“UK”) Employment Tribunal
SIA (Mauritius) Limited (“SIA MRU”) is a wholly–owned subsidiary of the Company that employs pilots on fixed term
contracts and then seconds them to the Company. Six ex-SIA MRU pilots who were seconded to the Company have
brought claims against SIA MRU and the Company in the UK for age discrimination and unfair dismissal. The cases
have not reached trial and preliminary matters are currently under way.
NOTES TO THE FINANCIAL STATEMENTS
31 March 2008