Singapore Airlines 2010 Annual Report Download - page 175

ANNUAL REPORT 2009/10
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36 Contingent Liabilities (in $ million) (continued)
(b) Cargo: Investigations by Competition Authorities and Civil Class Actions (continued)
As no competition authority has adopted any adverse decision against SIA Cargo and the Company, and as 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, proceedings or civil suits
can be regarded as contingent liabilities and, therefore, no provision has been made in the financial statements.
(c) Passengers: Civil Class Actions and Investigations by Competition Authorities
The Company and several airlines have been named in civil class action damages lawsuits in the US and Canada
alleging an unlawful agreement to fix surcharges and rates on transpacific flights. These cases are currently in
procedural stages and none have been tried thus far on their respective substantive legal merits. The Company
has also received notice of investigations by competition authorities in various jurisdictions concerning whether
competitive aspects of passenger air travel services have been lawfully determined. The Company is cooperating
with these criminal and regulatory investigations.
As the civil class action suits have neither been tried nor the damages quantified and the investigations by the
competition authorities are ongoing, it is premature to make a determination regarding whether the civil suits
or investigations can be regarded as contingent liabilities and, therefore, no provision has been made in the
financial statements.
(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 [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. IATA was subsequently removed from the proceedings.
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 Cathay Pacific Airways Limited and the
Company. The Company denies the claims and, along with each of the named airlines, is defending the actions.
By agreement amongst the parties, the first case was heard with one airline from the respondent group as the
lead defendant. The subsequent claims against the Company were put on hold until the first case is resolved.
In March 2009, the Court dismissed the first travel agent’s claim. The agents appealed and on 4 May 2010 the
Federal Court reversed the earlier decision. The other airline has 28 days from 4 May 2010 to appeal to the High
Court of Australia.
In the meantime, there have been no substantive developments in the claim against the Company. The Company
continues to deny the claim and is defending the action.