Singapore Airlines 2009 Annual Report Download - page 25

23
SUBSIDIARIES
SINGAPORE AIRPORT TERMINAL
SERVICES LIMITED
During the year in review,
Singapore Airport Terminal
Services’ (SATS) operating revenue
crossed the billion-dollar mark
for the fi rst time to $1.06 billion.
The 10.9% increase was due to a
two-month revenue contribution
of $110.2 million from Singapore
Food Industries (SFI), which became
a subsidiary on 20 January 2009.
SATS saw the full-year impact of
additional costs from the change in
operations with Terminal 3 opening
at Singapore Changi Airport in
January 2008. The annual cost
increase was $20 million compared
to $5 million in the last fi nancial
year. SATS introduced several cost
management measures that helped
limit the decline in operating
profi t to 2% at $170.9 million.
The jobs credit scheme benefi t of
$12.3 million, part of the one-
off resilience package from the
Singapore Government, also helped
mitigate the impact of declining
aviation revenue in Singapore.
The year in review had been a key
milestone in the history of SATS. It
embarked on the acquisition of SFI
which provides immediate scale
to SATS’ Food Solutions business
and access to wider customer
segments while mitigating SATS’
exposure to the aviation industry.
SATS also launched its low-cost
ground handling and infl ight
catering services to cater to the
growing low-cost carrier segment
of the airline market. It now has an
enhanced value proposition and
an end-to-end integrated service
platform to meet the differentiated
needs of this airline segment.
SATS continued to grow its
presence outside of Singapore.
In October 2008, it acquired a
100% equity stake in ground
handler Menzies Aviation (Hong
Kong) which was subsequently
renamed SATS HK. This acquisition
is in line with SATS’ plan to focus
on its customers and increase
its presence in locations that will
create new service opportunities
with them.
In India, SATS’ 50-50 joint venture
(JV) with Air India for ground
handling received the approval
from the Government of India.
This approval allows SATS to
initiate discussion on the JV terms.
Upon successful completion, this
potential JV will substantially
increase SATS’ presence in India.
SATS and Air India are already
collaborating in two greenfi eld
metro airports in Hyderabad and
Bangalore, with the provision of
ground handling services.
At Singapore Changi Airport, SATS
continues to handle about 80%
of the total scheduled fl ights. It
served 30.91 million passengers,
handled 88,155 fl ights and
1.46 million tonnes of cargo,
and produced 25.19 million
meals during the year in review.
SATS also won a number of new
contracts and renewed several
existing contracts with airline
customers such as China Southern
Airlines, Philippine Airlines, TNT,
Cargolux, Tiger Airways, Jet
Airways, Lion Air, Best Air and
Cardig Air – a testament to its
consistent delivery of high quality
service with compelling value.