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Singapore Airlines

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Table of Contents 1. Introduction 4 2. Executive Summary 5 3. Financial Analysis 5 3.1. Profitability 5 3.2. Analysis of Investment Performance 13 3.3. Financial Condition 17 3.4. Dividend Policy 22 4. Conclusion 26 5. References 27 Introduction The analysis supplied within this report has been undertaken from the perspective of a current shareholder in Singapore Airlines (SIA). The report provides critical assessment of the company's overall performance, assessment that would be relevant and meaningful to shareholders. Two major airlines have been selected to provide competitor comparison throughout this report. The two competitor airlines - Japan Airlines Ltd and Qantas Airways - have been selected …show more content…

Although we see a decrease in fuel, staff and depreciation costs, all other expenses experienced an increase for the reporting period. Vertical Analysis of Income Statement (in $ million) | 2013/14 | % | 2012/13 | % | Total revenue | 15,243.9 | 100 | 15,098.2 | 100 | Total op expense | 14,984.6 | 98 | 14,869.0 | 98 | Depreciation | 1,575.5 | 10 | 1,589.1 | 10 | Staff cost | 2,336.7 | 15 | 2,353.3 | 15 | Fuel costs | 5,702.1 | 37 | 5,899.4 | 39 | Handling charges | 1,038.7 | .07 | 1,006.1 | .07 | Advertising and sales costs | 257.6 | .02 | 209.3 | .01 | Rentals on leased aircraft | 649.5 | .04 | 553.6 | .03 | Other expenses | 3,424.5 | 37.87 | 3,258.2 | 35.89 | By using the vertical analysis method as shown above we see the individual operating expense as a proportion of total revenue for the reporting period. This give greater clarity to the significance the various expense items mean to the airline and its reliance on these expenses to be controlled. We can see from the analysis there is consistency across reporting periods for these significant expenses, with decease in fuel costs. From the above statistical data (horizontal and vertical) we can delve deeper into the financial profitability of the airline by the use of profitability ratios. As with any ratio calculation its value or benefit comes

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