Singapore Airlines 2010 Annual Report Download - page 174

SINGAPORE AIRLINES
172
notes to the financial statements
31 march 2010
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 and Civil Class Actions
SIA Cargo and the Company are among several airlines that have received notice of criminal and/or regulatory
investigations by competition authorities in the US, European Union, Australia, Canada, New Zealand, South
Africa, South Korea, and Switzerland on whether surcharges, rates or other competitive aspects of air cargo
service were lawfully determined (“the air cargo issues”). These investigations remain ongoing. SIA Cargo and the
Company are cooperating in relation to these inquiries concerning the air cargo issues.
In addition to the notices mentioned above, SIA Cargo and the Company are among several airlines to have
received a Statement of Objections (“SO”) from the European Commission (“EC”) in December 2007. 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. SIA Cargo and the Company responded to the SO in writing and during
an oral hearing in the first half of 2008. The timing and content of any decision by the EC are uncertain, but a
decision could be issued in the coming months.
In December 2008, the competition authorities in New Zealand and Australia initiated civil penalty proceedings
concerning the air cargo issues. In New Zealand, a statement of claim was issued against fourteen airlines
including both SIA Cargo and the Company. In Australia, statements of claim have been issued against nine
airlines including SIA Cargo, but the competition authority has indicated that additional proceedings will be
brought against other carriers. These proceedings are at a preliminary stage. An initial defence has been filed in
both proceedings.
In October 2009, SIA Cargo was among several airlines to have received notification of alleged infringements
in South Korea in the form of an Examiner’s Report and Recommendations to the South Korean Fair Trade
Commission (“KFTC”). The Examiner’s Report is a preliminary document and does not constitute findings by the
KFTC against SIA Cargo. SIA Cargo has provided its written response to the Examiner’s Report and hearings are
scheduled for May 2010. A decision is anticipated shortly thereafter, but the exact timing and content of any
decision are uncertain.
After the investigations commenced, civil class action damages lawsuits were filed in the US, Canada, Australia
and South Korea by external parties against several airlines, including SIA Cargo and the Company. These cases
still remain in their respective procedural stages and none have been tried thus far on their respective substantive
legal merits.