Annual Report FY2015-16 - Singapore Airlines

232 Pages·2016·6.58 MB·English

MCI (P) 100/05/2016
STRENGTHENING
A POSITION OF
LEADERSHIP
Annual Report FY2015/16
Mission Statement
Singapore Airlines is a global
company dedicated to providing
air transportation services of the
highest quality and to maximising
returns for the benefit of its
shareholders and employees.
On the Cover
The Group is well positioned to compete in the challenging operating
environment through our portfolio of airlines serving both full-service
and budget airline segments of the market.

With full ownership of Tiger Airways, which operates as Tigerair,
we are now able to further enhance synergies across the SIA Group.
OVERVIEW
The Group remains fully committed Contents
to its multi-pronged approach to OVERVIEW
2 3-Year Financial Highlights
address structural changes that 3 SIA Group Portfolio
4 Statistical Highlights
6 Significant Events
have been taking place in the
STRATEGY
industry, through a portfolio of 8 Configuring a Multi-Hub Strategy
10 Strengthening Premium Positioning
airlines serving both full-service 12 Developing New Opportunities
14 Our Strategy for the Future
16 Chairman’s Letter to Shareholders
and budget airline segments of
18 Board of Directors
the market, a multi-hub strategy, PERFORMANCE
22 The Year in Review
the pursuit of adjacent business 24 Network
25 Fleet Management
26 Products and Services
opportunities, and ongoing
32 People Development
34 Environment
enhancement of premium products 35 Community Engagement
36 Subsidiaries
and services. 44 Financial Review
60 Awards
GOVERNANCE
62 Statement on Risk Management
63 Corporate Governance Report
SIA Group 75 Membership and Attendance of Singapore
Airlines Limited
Multi-Hub Strategy:
76 Further Information on Board of Directors
FINANCIAL
84 Financial Report
85 Report by the Board of Directors
223 Notice Of Annual General Meeting
1. IBC Corporate Data
Vistara
Vistara, a full-service
airline based in New
Delhi, is a joint venture
between Tata Sons and
Singapore Airlines
2.
NokScoot
NokScoot is a joint venture set up by
Nok Air and Scoot. NokScoot operates
widebody Boeing 777-200 aircraft
from its Bangkok base, and its cargo
capacity is managed by SIA Cargo
Annual Report FY2015/16 1
OVERVIEW
3-Year Financial
Highlights
$10.96
Total Group Revenue
($M)
Net asset value per share
Net asset value per share is computed by dividing equity
attributable to owners of the Parent by the number of
ordinary shares in issue excluding treasury shares. 15,244 15,566 15,228
45 cents
Total dividend per share
Including the interim dividend of 10 cents per share
paid on 27 November 2015, the total dividend for the
2015/16 financial year will be 45 cents per share, and
will be paid on 17 August 2016 to shareholders as at
2013/14 2014/15 2015/16
4 August 2016.
Group Operating Profit
69 cents
($M)
Earnings per share
Earnings per share is computed by dividing profit
attributable to owners of the Parent by the weighted
681
average number of ordinary shares in issue excluding
treasury shares.
410
$485 million
259
SIA operating profit
Up $145 million compared to prior year largely owing
to lower net fuel cost.
2013/14 2014/15 2015/16
30,405,000
Group Net Profit
($M)
Passengers carried
(Group airlines)
804
15,144
359 368
2013/14 2014/15 2015/16
2 Singapore Airlines
SIA Group Portfolio
Singapore Airlines continued to build upon
its global network during the last financial year,
including through new services by subsidiary
airlines and through new partnerships with
other airlines.
FULL SERVICE LOW COST

19,029,000 3,836,000 2,412,000 5,128,000
passengers carried in passengers carried in passengers carried in passengers carried in
FY2015/16 FY2015/16 FY2015/16 FY2015/16
102 $91m 10 40
aircraft in fleet operating profit 787 Dreamliners in fleet destinations across
12 countries in Asia
3 29 1st
23
new destinations to be aircraft in fleet full-year operating profit
introduced – Dusseldorf, since commencing aircraft in fleet
Canberra and Wellington operations
REGIONAL
LONG-HAUL
Annual Report FY2015/16 3
OVERVIEW
Statistical Highlights
Financial Statistics R1
2015/16 2014/15 % Change
The Group
Financial Results ($ million)
Total revenue 15,228.5 15,565.5 - 2.2
Total expenditure 14,547.3 15,156.1 - 4.0
Operating profit 681.2 409.4 + 66.4
Profit before taxation 972.4 442.9 + 119.6
Profit attributable to owners of the Parent 804.4 367.9 + 118.6
Financial Position ($ million)
Share capital 1,856.1 1,856.1 –
Treasury shares (381.5) (326.3) - 16.9
Capital reserve (129.2) 215.9 n.m.
Foreign currency translation reserve (151.3) (135.7) - 11.5
Share-based compensation reserve 123.7 113.2 + 9.3
Fair value reserve (498.6) (706.2) + 29.4
General reserve 11,935.5 11,446.6 + 4.3
Equity attributable to owners of the Parent 12,754.7 12,463.6 + 2.3
Return on equity holders’ funds (%) R2 6.4 2.9 + 3.5 points
Total assets 23,769.7 23,921.6 - 0.6
Total debt 1,347.5 1,739.5 - 22.5
Total debt : equity ratio (times) R3 0.11 0.14 - 0.03 times
Value added 5,040.1 4,396.8 + 14.6
Per Share Data
Earnings – basic (cents) R4 69.0 31.4 + 119.7
Earnings – diluted (cents) R5 68.7 31.2 + 120.2
Net asset value ($) R6 10.96 10.66 + 2.8
Dividends
Interim dividend (cents per share) 10.0 5.0 + 5.0 cents
Final dividend (cents per share) 35.0 17.0 + 18.0 cents
Dividend cover (times) R7 1.5 1.4 + 0.1 times
The Company
Financial Results ($ million)
Total revenue 11,686.1 12,418.4 - 5.9
Total expenditure 11,201.0 12,078.2 - 7.3
Operating profit 485.1 340.2 + 42.6
Profit before taxation 766.2 563.1 + 36.1
Profit after taxation 672.0 540.3 + 24.4
Value added 3,661.6 3,411.3 + 7.3
n.m. not meaningful
R1 Singapore Airlines’ financial year is from 1 April to 31 March. Throughout this report, all figures are in Singapore Dollars, unless otherwise stated.
R2 Return on equity holders’ funds is profit attributable to owners of the Parent expressed as a percentage of the average equity holders’ funds.
R3 Total debt : equity ratio is total debt divided by equity attributable to owners of the Parent as at 31 March.
R4 Earnings per share (basic) is computed by dividing profit attributable to owners of the Parent by the weighted average number of ordinary shares in issue excluding treasury shares.
R5 Earnings per share (diluted) is computed by dividing profit attributable to owners of the Parent by the weighted average number of ordinary shares in issue excluding treasury shares,
adjusted for the dilutive effect on the exercise of all outstanding share options.
R6 Net asset value per share is computed by dividing equity attributable to owners of the Parent by the number of ordinary shares in issue excluding treasury shares at 31 March.
R7 Dividend cover is profit attributable to owners of the Parent divided by total dividends.
4 Singapore Airlines
Operating Statistics
2015/16 2014/15 % Change
Singapore Airlines
Passengers carried (thousand) 19,029 18,737 + 1.6
Revenue passenger-km (million) 94,267.4 94,209.2 + 0.1
Available seat-km (million) 118,366.5 120,000.8 - 1.4
Passenger load factor (%) 79.6 78.5 + 1.1 points
Passenger yield (cents/pkm) 10.6 11.2 - 5.4
Passenger unit cost (cents/ask) 8.5 8.9 - 4.5
Passenger breakeven load factor (%) 80.2 79.5 + 0.7 points
SilkAir
Passengers carried (thousand) 3,836 3,553 + 8.0
Revenue passenger-km (million) 6,516.2 5,864.9 + 11.1
Available seat-km (million) 9,117.8 8,355.2 + 9.1
Passenger load factor (%) 71.5 70.2 + 1.3 points
Passenger yield (cents/pkm) 13.5 13.9 - 2.9
Passenger unit cost (cents/ask) 9.0 9.7 - 7.2
Passenger breakeven load factor (%) 66.7 69.8 - 3.1 points
Scoot
Passengers carried (thousand) 2,412 1,878 + 28.4
Revenue passenger-km (million) 8,673.9 6,718.7 + 29.1
Available seat-km (million) 10,267.4 8,170.6 + 25.7
Passenger load factor (%) 84.5 82.2 + 2.3 points
Revenue per revenue seat-km (cents/pkm) 5.6 5.6 –
Cost per available seat-km (cents/ask) 4.7 5.8 - 19.0
Breakeven load factor (%) 83.9 103.6 - 19.7 points
Tiger Airways
Passengers carried (thousand) 5,128 5,140 - 0.2
Revenue passenger-km (million) 9,551.1 9,696.3 - 1.5
Available seat-km (million) 11,465.4 11,812.4 - 2.9
Passenger load factor (%) 83.3 82.1 + 1.2 points
Revenue per revenue seat-km (cents/pkm) 7.0 6.8 + 2.9
Cost per available seat-km (cents/ask) 5.8 6.0 - 3.3
Breakeven load factor (%) 82.9 88.2 - 5.3 points
SIA Cargo
Cargo and mail carried (million kg) 1,170.1 1,124.0 + 4.1
Cargo load (million tonne-km) 6,510.9 6,347.2 + 2.6
Gross capacity (million tonne-km) 10,513.3 10,024.9 + 4.9
Cargo load factor (%) 61.9 63.3 - 1.4 points
Cargo yield (cents/ltk) 29.0 32.8 - 11.6
Cargo unit cost (cents/ctk) 18.9 21.4 - 11.7
Cargo breakeven load factor (%) 65.2 65.2 –
Group Airlines (Passenger)
Passengers carried (thousand) 30,405 29,308 + 3.7
Revenue passenger-km (million) 119,008.6 116,489.1 + 2.2
Available seat-km (million) 149,217.1 148,339.0 + 0.6
Passenger load factor (%) 79.8 78.5 + 1.3 points
Employee Productivity (Average) – The Company
Average number of employees 13,983 14,040 - 0.4
Seat capacity per employee (seat-km) 8,465,029 8,547,066 - 1.0
Passenger load per employee (tonne-km) R1 626,572 625,516 + 0.2
Revenue per employee ($) 835,736 884,501 - 5.5
Value added per employee ($) 261,861 242,970 + 7.8
Employee Productivity (Average) – The Group
Average number of employees 24,350 23,963 + 1.6
Revenue per employee ($) 625,400 649,564 - 3.7
Value added per employee ($) 206,986 183,483 + 12.8
R1 Passenger load includes excess baggage carried.
GLOSSARY
Singapore Airlines Tiger Airways
Revenue passenger-km = Number of passengers carried x distance flown (in km) Revenue passenger-km = Number of passengers carried x distance flown (in km)
Available seat-km = Number of available seats x distance flown (in km) Available seat-km = Number of available seats x distance flown (in km)
Passenger load factor = Revenue passenger-km expressed as a percentage of available seat-km Passenger load factor = Revenue passenger-km expressed as a percentage of available seat-km
Passenger yield = Passenger revenue from scheduled services divided by revenue passenger-km Revenue per revenue seat-km = Passenger revenue from scheduled services divided by revenue passenger-km
Passenger unit cost = Operating expenditure (less bellyhold revenue from SIA Cargo) divided by Cost per available seat-km = Operating expenditure divided by available seat-km
available seat-km Breakeven load factor = Cost per available seat-km expressed as a percentage of revenue per revenue
Passenger breakeven load factor = Passenger unit cost expressed as a percentage of passenger yield. This is the seat-km. This is the theoretical load factor at which passenger revenue equates
theoretical load factor at which passenger revenue equates to the operating to the operating expenditure
expenditure (less bellyhold revenue from SIA Cargo) SIA Cargo
SilkAir Cargo load = Cargo and mail load carried (in tonnes) x distance flown (in km)
Revenue passenger-km = Number of passengers carried x distance flown (in km) Gross capacity = Cargo capacity production (in tonnes) x distance flown (in km)
Available seat-km = Number of available seats x distance flown (in km) Cargo load factor = Cargo and mail load (in tonne-km) expressed as a percentage of gross capacity
Passenger load factor = Revenue passenger-km expressed as a percentage of available seat-km (in tonne-km)
Passenger yield = Passenger revenue from scheduled services divided by revenue passenger-km Cargo yield = Cargo and mail revenue from scheduled services divided by cargo load (in tonne-km)
Passenger unit cost = Operating expenditure (less cargo and mail revenue) divided by available seat-km Cargo unit cost = Operating expenditure (including bellyhold expenditure to Singapore Airlines)
Passenger breakeven load factor = Passenger unit cost expressed as a percentage of passenger yield. This is the divided by gross capacity (in tonne-km)
theoretical load factor at which passenger revenue equates to the operating Cargo breakeven load factor = Cargo unit cost expressed as a percentage of cargo yield. This is the theoretical
expenditure (less cargo and mail revenue) load factor at which cargo revenue equates to the operating expenditure
Scoot (including bellyhold expenditure to Singapore Airlines)
Revenue passenger-km = Number of passengers carried x distance flown (in km) Group Airlines (Passenger)
Available seat-km = Number of available seats x distance flown (in km) Revenue passenger-km = Number of passengers carried x distance flown (in km)
Passenger load factor = Revenue passenger-km expressed as a percentage of available seat-km Available seat-km = Number of available seats x distance flown (in km)
Revenue per revenue seat-km = Passenger revenue from scheduled services divided by revenue passenger-km Passenger load factor = Revenue passenger-km expressed as a percentage of available seat-km
Cost per available seat-km = Operating expenditure divided by available seat-km
Breakeven load factor = Cost per available seat-km expressed as a percentage of revenue per revenue
seat-km. This is the theoretical load factor at which passenger revenue equates
to the operating expenditure
Annual Report FY2015/16 5
OVERVIEW
Significant Events
2015
Q1 27 April Q2 25 July
15/16 Singapore Airlines launches all-new 15/16 More than 7,000 people visit SIA
mobile app that provides a functional Training Centre in first-ever open house
and seamless user experience for Apple as part of the Airline’s celebrations for
and Android smartphone users Singapore’s 50th birthday
21 May 9 August
Singapore Airlines unveils its new Singapore Airlines A380, in a special
Premium Economy Class seats and livery, participates in aerial flypast during
inflight offerings following a two- National Day Parade for the first time
year development programme and an
investment of about US$80 million 20 August
Singapore Airlines extends title
29 May sponsorship of Formula 1 Singapore
Singapore Airlines treats more than Grand Prix until 2017
300 beneficiaries to a three and a
half hour flight on the world’s largest 29 September
passenger aircraft, the Airbus A380, on KrisFlyer programme expands to allow
the Airline’s first-ever charity flight members to earn and redeem miles on
Scoot and Tigerair
25 June
Singapore Airlines serves iconic
Peranakan dishes specially Q3 13 October
developed with Ms Shermay Lee on 15/16 Singapore Airlines announces the
selected flights between July and planned re-start of non-stop services
September 2015 to commemorate to the United States as the launch
Singapore’s 50th birthday customer of the new ultra-long-range
variant of the Airbus A350 aircraft
9 November
Singapore Airlines announces the
addition of Dusseldorf to its route
network from 21 July 2016
11 November
Singapore Airlines and Lufthansa sign
a wide-ranging partnership agreement
involving joint venture on key routes
6 Singapore Airlines
2016
Q4 20 January
15/16 Singapore Airlines announces
“Capital Express” Service to connect
Singapore, Canberra and Wellington
starting from 20 September 2016
1 March
Singapore Airlines announces launch
of A350-900 services to Amsterdam
starting from 9 May 2016
3 March
Singapore Airlines welcomes the
arrival of its first A350-900 from the
Airbus Delivery Centre in Toulouse
Singapore Airlines announces launch
of ‘Companion App’ – the first-of-its-
kind mobile application that offers
customers greater control of their
inflight entertainment experience even
before boarding the aircraft
Annual Report FY2015/16 7
Configuring
a Multi-Hub
Strategy
Complementing our strong Singapore Hub, our
multi-hub strategy provides access to the large
and growing markets of India and Thailand. This
adds new engines of growth to our business.
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