Singapore Airlines 2012 Annual Report Download - page 11

009ANNUAL REPORT 2011/2012
Chairman’s Letter to Shareholders
The 2011/12 financial year was challenging once again, ending
on a disappointing note with a fourth-quarter loss. But there
remains much to be positive about, as our strong balance sheet
enables us to maintain a long-term approach and continue
investing to keep us in an industry-leading position.
SIA remains focused on adhering to its three core strengths,
encompassing service excellence, product leadership and
network connectivity. Much has taken place in all these
areas over the past year, and there is more to come.
From a service standpoint, we continue to invest in training
to ensure that our employees provide the highest quality
care to our customers, both on the ground and in the air.
Many initiatives were also implemented in the last financial
year to ensure that our products remain among the best in
the industry. A cabin retrofit programme was completed on
our Boeing 777-300s to fit the aircraft with new seats. We
also continued to take delivery of new Airbus A380s, and
placed orders for additional Airbus A330-300s and B777-
300ERs, in line with our longstanding policy of operating a
young and modern fleet.
In the new financial year we will be retrofitting B777-
200ERs with our latest-generation business class seat
offerings. We are also introducing in-flight connectivity
services, which over the next two years will progressively
be made available on all our Airbus A340-500s, A380s and
B777-300ERs. The services enable customers to surf the
Internet, and send and receive mobile phone text messages
and emails from their mobile devices, just as they can on
the ground.
Our network also continues to be enhanced. SIA’s capacity
is growing in a measured manner, while our regional wing
SilkAir has been recording particularly strong growth,
with several new destinations recently introduced. New
partnerships were also agreed over the past financial year,
including with Virgin Australia and Scandinavian Airlines, to
provide more travel choices to our customers.
Another important development in the last financial year
was our establishment of Scoot, a new medium- and long-
haul low-cost airline that recently launched operations with
B777s. It is catering to a largely untapped new market
segment and provides an additional engine of growth for
the SIA Group.
Fuel remains the Group’s biggest challenge, with average jet
fuel prices rising by one third in the last financial year and
now accounting for 40% of expenditure. Costs are being well
managed in areas we can control, and strict cost discipline
helped reduce our unit cost excluding fuel by 7.5% in the
last financial year. With fuel prices expected to remain at
high levels, the senior management team is committed to
ongoing containment of costs.
Our staff continue to do their part to ensure the Group remains
in a position of strength, and for this we are grateful to all our
employees for their loyalty and dedication. As an indication
of the positive relations between SIA and employee groups,
new collective agreements were recently concluded with
all three unions, which enables us to collectively focus on
confronting the many external challenges.
I would also like to express my appreciation to my fellow
Directors for their commitment over the past financial year,
during which we welcomed Jackson Tai to the Board. This
followed the retirement of James Koh, who had been a
Director since 1 August 2005. I thank James for his invaluable
contributions over many years.
Finally, I wish to record my thanks to our shareholders and
assure you that we will never become complacent and rest on
our laurels. With our strong balance sheet and commitment
to maximising operating efficiency and containing costs, the
Group remains well positioned to meet the challenges ahead.
Stephen Lee
Chairman