Singapore Airlines 2010 Annual Report Download - page 9

ANNUAL REPORT 2009/10
007
of European airspace due to volcanic activity in
Iceland. But we remain confident that our business
model is sound and through the difficulty of the
past 18 months we proved that we can react to
challenges adeptly and rapidly.
I wish to close with words of thanks to several
important groups.
To our staff for their many sacrifices, I extend
my sincere appreciation on behalf of the Board
of Directors.
I wish to thank my fellow Directors and to
welcome Dr Helmut Panke and Dr William Fung
to the Board. I would also like to acknowledge
the contributions of two Directors who retired
after our AGM on 31 July 2009, Mr Chia Pei-Yuan
and Sir Brian Pitman. It was with great sadness
that Sir Brian later passed away. Our heartfelt
condolences go out to his loved ones.
Finally, it would be remiss of me not to record a
special thanks to our customers. All employees
of the SIA Group are committed to providing the
highest-quality products and services, and your
loyalty motivates us to strive for excellence in
everything we do.
There will always be something unexpected
to challenge us and the sustainability of the
recovery is subject to the economic conditions
of the major markets that we serve. But we can
be proud to have come through the economic
downturn in a position of strength, well
positioned for the upturn.
Stephen Lee
Chairman
Second, marketing strategies were important
in helping us deal with reduced demand. We
acted promptly at the start of the financial year,
cutting capacity by more than 10% while also
encouraging travel through fare specials and
frequent-flyer programme promotions.
Third, our disciplined, long-term focus has put us
in a strong position to benefit as demand returns
to pre-downturn levels. We continued to invest
in our products and services as well as in staff
training, even as we faced criticism from some
that our focus on premium travel was off the
mark. We were confident demand for premium
travel would return and this proved true in the
second half as business class travel in particular
picked up. Even at the worst of times we kept an
eye on the recovery.
Remaining profitable has not left us complacent,
however. Forward bookings continue to improve
but yield remains under pressure. As a result we
are being cautious in restoring capacity. But we are
not forsaking our long-term focus, one example
being the recent addition of Munich to our
passenger network. In October we look forward to
launching services to Tokyo’s Haneda Airport.
We continue to take delivery of new Airbus
A330 and A380 aircraft, in line with our
longstanding policy of maintaining a young and
modern fleet. At the same time we are refitting
the cabins of some of our Boeing 777s with our
latest product offerings.
Our focus on the core airline business is also being
strictly adhered to and in line with this we divested
our holding in Singapore Airport Terminal Services
during the year in review. We meanwhile continue
to adapt to the changing market environment on
short-haul routes, such as through the transfer to
SilkAir of Penang operations as well as additional
Kuala Lumpur services.
The period ahead will bring challenges, as already
demonstrated by rising jet fuel prices and the fact
that the new financial year began with the closure