Singapore Airlines 2010 Annual Report Download - page 25

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ANNUAL REPORT 2009/10
023
Subsidiaries
SIA Cargo
SIA Cargo reported an operating loss of
S$145.1 million in the year in review.
It was an exceptionally difficult year for the
airfreight industry, with the economic downturn
having a severe impact on global trade volume.
The downturn was most sharply felt in the first
half of the financial year, as manufacturing
slowed in the Asia Pacific region and demand
tapered off in the major consumer markets in
the US and Europe.
Market conditions were better in the second
half of the financial year with renewal of
inventory restocking and some improvement
in global economies.
SIA Cargo rationalised its freighter network
to align capacity more closely to demand in
response to the global economic downturn.
Services were reduced during lull periods and
additional services were deployed on selected
routes during periods of stronger demand,
particularly towards the end of 2009. The
company channelled resources to grow the
charter segment of the business in order to
supplement scheduled services.
It also focused on closer cooperation with its
key customers to weather the downturn. Eight
business partners renewed their participation in
the company’s Global Partnership Programme.
Despite the difficulties faced during the financial
year, SIA Cargo continued to place great
importance on maintaining its high service
standards through the Cargo 2000 programme,
which serves as the benchmark of service quality
and reliability for the airfreight industry.
During the year, it embarked on an intensified
service audit programme to strengthen the
operational efficiency and compliance of its
service providers in meeting stringent service
level standards. Results have been extremely
satisfying as the overall percentage of freight
“Flown as Booked” and the percentage
of “On-time Notification for Delivery” of
shipments carried on its flights have exceeded
expectations and surpassed the Cargo 2000
average performance index.
On the information technology front, SIA
Cargo is in the process of replacing its legacy
reservations system with a new user-friendly
system. The new system called Reservations
express, or Rx for short, will enable the
company to adapt functionalities or new
requirements more quickly to customer needs
in the rapidly changing cargo business.
In the face of the uncertain business environment,
SIA Cargo will be flexible in the deployment of
its resources and will continue to be vigilant in
maintaining cost discipline. The company will
also continue to seek out growth opportunities
in emerging markets and actively pursue more
projects and charter opportunities.