Singapore Airlines 2011 Annual Report Download - page 74

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SINGAPORE AIRLINES
072
FINANCIAL REVIEW
Performance of the Company (continued)
Expenditure (continued)
Staff costs were $175 million higher (+12.8 percent) largely from higher provision for profit-sharing bonus as a
result of better operating performance and the reinstatement of wage cut.
Sales cost increased $71 million (+14.6 per cent) mainly due to higher commission and incentives, in line with
the higher revenue.
Rentals on leased aircraft increased $44 million (+9.2 per cent), primarily attributable to lease of additional eight
A330-300 aircraft and one A380-800 aircraft, partially offset by the return of four B747-400 aircraft on expiry
of lease and the weakening of USD against SGD.
Other costs were up $60 million (+11.8 per cent), mainly from higher foreign exchange revaluation and hedging loss.
Fuel Productivity and Sensitivity Analysis
Fuel productivity as measured by load tonne-km per barrel (ltk/BBL) decreased 1.5 per cent over the previous
year to 425ltk/BBL. This was mainly due to a decline in the overall load factor.
A change in fuel productivity (passenger aircraft) of 1.0 per cent would impact the Company’s annual fuel cost
by about $36 million, before accounting for changes in fuel price, USD exchange rate and flying operations.
A change in the price of fuel of one USD per barrel affects the Company’s annual fuel cost by about $36 million,
before accounting for USD exchange movements, and changes in volume of fuel consumed.
Finance Charges
Finance charges were higher in 2010-11, mainly from interest expense incurred for the $500 million 10-year
bond (issued in July 2010) bearing interest of 3.22 per cent per annum and $300 million 5-year bond (issued
in September 2010) bearing interest of 2.15 per cent per annum.
Interest Income
Interest income was $11 million lower in 2010-11, largely because amortised interest on the A330-300
progress delivery payments decreased $14 million with the full delivery of the aircraft.