Airline Industry Analysis

Airlines in Singapore
Industry Profile
Reference Code: 0116-0756

Publication date: November 2008
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Singapore - Airlines
Datamonitor (Published November 2008)
Page 2
EXECUTIVE SUMMARY
EXECUTIVE SUMMARY
Market Value
The Singaporean airlines industry grew by 10.3% in 2007 to reach a value of $6.5
billion.
Market Value Forecast
In 2012 the industry is forecast to have a value of $11.2 billion, an increase of 73.7%
since 2007.
Market Volume
The industry grew by 4.8% in 2007 to reach a volume of 17.5 million passengers.
Market Volume Forecast
In 2012 the industry is forecast to have a volume of 21.7 million passengers, an
increase of 24.0% since 2007.
Market Segmentation
Singapore accounts for 7.4% share of the Asia-Pacific industry's value.
Page 3
CONTENTS
TABLE OF CONTENTS
EXECUTIVE SUMMARY
CHAPTER 1
Market Overview
1.1
Market Definition
1.2
Research Highlights
1.3
Market Analysis
CHAPTER 2
Market Value
CHAPTER 3
Market Volume
10
CHAPTER 4
Market Segmentation
11
CHAPTER 5
Five Forces Analysis
12
5.1
Summary
12
5.2
Buyer Power
13
5.3
Supplier Power
14
5.4
New Entrants
15
5.5
Substitutes
17
5.6
Rivalry
18
CHAPTER 6
Leading Companies
19
6.1
Singapore Airlines Limited
19
6.2
British Airways Plc
22
6.3
Cathay Pacific Airways Limited
24
Page 4
CONTENTS
CHAPTER 7
Market Forecasts
26
7.1
26
7.2
27
CHAPTER 8
Macroeconomic Indicators
28
CHAPTER 9
Appendix
30
9.1
Methodology
30
9.2
Industry Associations
31
9.3
Related Datamonitor Research
31
Page 5
CONTENTS
LIST OF TABLES
Table 1:
Singapore Airlines Industry Value: $ billion, 2003-2007 ......................................9
Table 2:
Singapore Airlines Industry Volume: Passengers million, 2003-2007 ...............10
Table 3:
Singapore Airlines Industry Segmentation: % Share, by Value, 2007...............11
Table 4:
Key Facts: Singapore Airlines Limited ..............................................................19
Table 5:
Key Financials: Singapore Airlines Limited .......................................................21
Table 6:
Key Facts: British Airways Plc ..........................................................................22
Table 7:
Key Financials: British Airways Plc ...................................................................23
Table 8:
Key Facts: Cathay Pacific Airways Limited .......................................................24
Table 9:
Key Financials: Cathay Pacific Airways Limited................................................25
Table 10:
Singapore Airlines Industry Value Forecast: $ billion, 2007-2012 .....................26
Table 11:
Singapore Airlines Industry Volume Forecast: Passengers million, 2007-2012.27
Table 12:
Singapore Size of Population (million) , 2003-2007 ..........................................28
Table 13:
Singapore GDP (Constant 2000 Prices, $ billion), 2003-2007 ..........................28
Table 14:
Singapore Inflation, 2003-2007.........................................................................28
Table 15:
Singapore Exchange Rate, 2003 ......................................................................29
Page 6
MARKET OVERVIEW
CHAPTER 1
1.1
MARKET OVERVIEW
Market Definition
The airlines industry comprises passenger air transportation, both scheduled and
chartered, but excludes air freight transport. Industry volumes are defined as the total
number of passengers enplaned at all airports within the country or region. Industry
value is defined as the total revenue obtained by airlines from transporting these
passengers. This avoids the double-counting of passengers. All currency conversions
in this profile were carried out using constant 2007 average annual exchange rates.
For the purpose of this report, Asia-Pacific comprises Australia, China, Japan, India,
Singapore, South Korea and Taiwan.
1.2
Research Highlights
The Singaporean airline industry generated total revenues of $6.5 billion in 2007,
representing a compound annual growth rate (CAGR) of 17.1% for the period
spanning 2003-2007.
Industry volumes increased with a CAGR of 10.9% between 2003-2007, to reach a
total of 17.5 million passengers in 2007.
Singapore has no significant domestic flights, and international flights therefore
constitute 100% of its airlines industry value and volume.
The performance of the industry is forecast to decelerate, with an anticipated CAGR
of 11.7% for the five-year period 2007-2012, which is expected to drive the industry to
a value of $11.2 billion by the end of 2012.
Page 7
MARKET OVERVIEW
1.3
Market Analysis
The Singaporean airline industry posted comparatively strong growth rates during the
2003-2007 period. This trend is expected to continue over the forthcoming five years.
The Singaporean airline industry generated total revenues of $6.5 billion in 2007,
representing a compound annual growth rate (CAGR) of 17.1% for the period
spanning 2003-2007. In comparison, the Chinese and South Korean industries grew
with CAGRs of 20.8% and 11.4%, respectively, over the same period, to reach
respective values of $22 billion and $7.5 billion in 2007.
Industry volumes increased with a CAGR of 10.9% between 2003-2007, to reach a
total of 17.5 million passengers in 2007. The industry's volume is expected to rise to
21.7 million passengers by the end of 2012, representing a CAGR of 4.4% for the
2007-2012 period.
Singapore has no significant domestic flights, and international flights therefore
constitute 100% of its airlines industry value and volume.
The performance of the industry is forecast to decelerate, with an anticipated CAGR
of 11.7% for the five-year period 2007-2012, which is expected to drive the industry to
a value of $11.2 billion by the end of 2012. Comparatively, the Chinese and South
Korean industries will grow with CAGRs of 9% and 7.5%, respectively, over the same
period, to reach respective values of $33.9 billion and $10.8 billion in 2012.
Page 8
MARKET VALUE
CHAPTER 2
MARKET VALUE
The Singaporean airlines industry grew by 10.3% in 2007 to reach a value of $6.5
billion.
The compound annual growth rate of the industry in the period 2003-2007 was
17.1%.
Table 1:
Singapore Airlines Industry Value: $ billion, 2003-2007
Year
$ billion
Si$ billion
% Growth
2003
2004
2005
2006
2007
3.4
4.7
5.3
5.9
6.5
5.2
7.0
7.9
8.8
9.8
35.40%
13.00%
11.60%
10.30%
CAGR, 2003-2007:
17.1%
Source: Datamonitor
Figure 1:
DATAMONITOR
Singapore Airlines Industry Value: $ billion, 2003-2007
% Growth
40.0%
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
2003
2004
Source: Datamonitor
2005
2006
% Growth
$ billion
$ billion
2007
DATAMONITOR
Page 9
MARKET VOLUME
CHAPTER 3
MARKET VOLUME
The Singaporean airlines industry grew by 4.8% in 2007 to reach a volume of 17.5
million passengers.
The compound annual growth rate of the industry volume in the period 2003-2007
was 10.9%.
Table 2:
Singapore Airlines Industry Volume: Passengers million, 20032007
Year
Passengers
million
2003
2004
2005
2006
2007
11.6
14.3
15.4
16.7
17.5
blank
% Growth
23.50%
7.60%
8.70%
4.80%
CAGR, 2003-2007:
10.9%
Source: Datamonitor
Figure 2:
DATAMONITOR
Singapore Airlines Industry Volume: Passengers million, 20032007
% Growth
20
18
16
14
12
10
8
6
4
2
0
25.0%
20.0%
15.0%
10.0%
% Growth
Passengers million
Passengers million
5.0%
0.0%
2003
2004
Source: Datamonitor
2005
2006
2007
DATAMONITOR
Page 10
MARKET SEGMENTATION
CHAPTER 4
MARKET SEGMENTATION
Singapore accounts for a 7.4% share of the Asia-Pacific industry's value.

China accounts for 25% of the regional industry's value.
Table 3:
Singapore Airlines Industry Segmentation: % Share, by Value,

2007
Geography
% Share
Rest of Asia-Pacific
China
South Korea
Singapore
Taiwan
56.70%
25.00%
8.50%
7.40%
2.30%
Total
100.0%
Source: Datamonitor
Figure 3:
DATAMONITOR
Singapore Airlines Industry Segmentation: % Share, by Value,

2007
Singapore Taiw an
2.3%
7.4%
South Korea
8.5%
China
25.0%
Source: Datamonitor
Rest of A siaPacif ic
56.7%
DATAMONITOR
Page 11
FIVE FORCES ANALYSIS
CHAPTER 5
5.1
Summary
Figure 4:
Forces Driving Competition in the Airlines Industry in

Singapore, 2007
Intensity of competition
Buyer Pow er
5
Weak
Strong
3
Degree of rivalry
Supplier Pow er
1
0
Substitutes
New Entrants
Score for each force is mean of scores for its drivers.

Total area & color indicates intensity of competition overall.
Source: Datamonitor
DATAMONITOR
Airlines have struggled throughout 2008 amid a cocktail of soaring fuel prices,
slowing consumer demand and the impact of the credit crisis on bank liquidity. More
than 30 airlines have collapsed around the world, including business class-only airline
Silverjet SILJ.L and travel giant XL in the UK.
Although the oil prices dropped down in third quarter 2008, airline bankruptcies
around the world are set to rise over the winter. The crisis has had severe impact on
suppliers like B/E Aerospace, the world's biggest supplier of plane seats due to a lack
of demand. Nevertheless the airline industry in Singapore is characterized by strong
supplier power; a consequence of the global duopoly of Boeing and Airbus that exists
in the manufacture of aircraft globally and the fact that, as yet, no viable substitute for
jet fuel has been discovered.
The air industry in Singapore has been deregulated to a certain extent, which makes
it more attractive for new entrants, although the bureaucracy and large financial
outlay involved in setting up an airline serve as a deterrent to new companies. The
desire for relatively fast international travel means that other forms of transport pose
no more than a moderate threat to air travel.
Page 12
5.2
Buyer Power
Figure 5:
Drivers of Buyer Power in the Airlines Industry in Singapore,

2007
Strength of buyer power
Weak
Strong
Product dispensability
Buyer independence
Buyer size
5
4
3
2
1
0
Backw ards integration
Oligopsony threat
Low -cost sw itching
Undifferentiated product
Financial muscle
Tendency to sw itch
Price sensitivity
Scores: 1= weak driver...5=strong driver

Source: Datamonitor
DATAMONITOR
The Singaporean airlines industry will be analyzed by taking airlines as players, and
leisure and business travellers as the main buyers. The large number of individual
consumers in this market diminishes buyer power, as the impact on an airline of
losing one customer is marginal. Switching from one player to another does not incur
any additional costs and customers are therefore free to shop around for the best
deal on their particular journey. On the whole this industry is highly price sensitive
and the majority of customers are keen to find the lowest priced ticket for their
journey.
Buyer power is increased marginally by the presence of online booking sites that
allow customers to compare and contrast tickets according to price, flight times and
number of stops en route and travel agents who assist customers in finding the best
deal. In response to the ease of switching from one player to another, many airlines
offer loyalty schemes such as Singapore Airlines KrisFlyer program. Buyer power is
assessed as moderate overall.
Page 13
5.3
Supplier Power
Figure 6:
Drivers of Supplier Power in the Airlines Industry in Singapore,

2007
Strength of supplier power
Weak
Strong
Forw ard integration
Differentiated input
Supplier size
5
4
3
2
1
0
Importance of quality/cost
No substitute inputs
Oligopoly threat
Sw itching costs
Player independence
Player dispensability

Source: Datamonitor
DATAMONITOR
Key inputs for airlines are fuel, aircraft and labour. Airlines employ a relatively large
number of flight and ground personnel, including mechanics, and reservation and
transportation ticket agents. As the airline industry is labour-intensive, staffing costs
are substantial, and may contribute more than 40% of an airlines total costs. Aircraft
are either leased or purchased from manufacturers by negotiating a separate contract
for each order. For example, major Singaporean player, Singapore Airlines, entered
into a contract with Airbus for twenty A350-900 aircraft in June 2007.
A disincentive for airlines to switch suppliers is the fact that they often sign contracts
for a number of aircraft to be produced over a period of time, and that breaking this
contract would incur financial penalties. Supplier power in this industry is boosted by
the presence of a duopoly upstream. Globally, Boeing and Airbus are the only
manufactures of airliners. A number of airlines have formed partnerships or alliances
with other airlines in order to buy fuel or purchase aircraft as a bloc, thereby achieving
higher bargaining power and reducing supplier power. Owing to a series of treaties
between countries, airline fuel is not taxed.
However, airlines have little control over rising fuel prices, and must often use
techniques such as hedging to mitigate the impact of price fluctuations. It is difficult to
find substitutes for the inputs required for airlines to operate an airline must have
aircraft, a supply of jet fuel and a sufficient workforce before it can offer flights. Unlike
other modes of transport, airlines have no alternative source of energy. Overall,
supplier power is strong.
Page 14
5.4
New Entrants
Figure 7:
Factors Influencing the Likelihood of New Entrants in the

Airlines Industry in Singapore, 2007
Likelihood of new entrants
Weak

5
Market grow th
4
3
Weak brands
Scale unimportant
2
1
0
Little IP involved
Low fixed costs
Strong
Suppliers accessible
Distribution accessible
Little regulation
Incumbents acquiescent

Source: Datamonitor
DATAMONITOR
To a certain extent the airline industry in Singapore has been deregulated and
airlines are now free to negotiate their own operating arrangements with different
airports, enter and exit routes easily, and to set fares and flight volumes according to
market conditions. The entry barriers for new airlines are lower in a deregulated
market, making it a more attractive prospect for new entrants. However, air carrier
companies must comply with a large number of rules, and there is a large amount of
bureaucracy involved in setting up a new airline.
A new company must apply to Civil Aviation Authority of Singapore for an air operator
certificate. This is a complex process and takes months, during which time it is
difficult to generate any revenues. Entering the market as a new company requires
considerable capital (for example, to acquire a fleet of planes); and, even for an
existing company to begin operating in Singapore, the market may impose significant
costs in terms of overheads, wages, and so on. Access to good distribution channels
may be difficult. Infrastructure in Singapore is lagging behind the growth in air traffic.
Congestion at Changi International Airport means that slots there (the right to takeoff or land at a particular time) have become an important commodity for many
airlines.
This situation creates difficulties for a new airline aiming to negotiate primetime slots
at busy airports and can result in it being restricted to offering flights only at off-peak
times, or having to fly to airports further away from popular destinations. The year
2008 was difficult for the airline industry due to global economic meltdown and high
Page 15

oil prices and the situation on Singaporean airline market is no different. So although
Singaporean market revenues have grown strongly in recent years, the likelihood of
new entrants is weak to moderate.
Page 16
5.5
Substitutes
Figure 8:
Factors Influencing the Threat of Substitutes in the Airlines

Industry in Singapore, 2007
Threat of substitutes

5
Weak
Strong
4
3
2
1
0
Beneficial alternative
Cheap alternative

Source: Datamonitor
DATAMONITOR
The main substitutes for airlines are other forms of transport: road, rail and marine.
Singapore is a small country, and there are no domestic flights. There is a
comprehensive bus network that provides frequent and efficient services along with a
convenient Mass Rapid Transit (MRT) subway system that is relatively inexpensive.
Some consumers may see the greater environmental impact of air travel as a
significant disadvantage compared to rail.
Singapore is the southern terminus of Malaysia's rail system, and three trains go to
Kuala Lumpur each day. A bus service links Singapore to almost all large Malaysian
cities with fares that are generally inexpensive. There are also ferry links with
Malaysia and islands in Indonesian archipelago, although these may be timeconsuming and only serve certain destinations. Overall, the threat of substitutes for
air travel is moderate.
Page 17
5.6
Rivalry
Figure 9:
Drivers of Degree of Rivalry in the Airlines Industry in

Singapore, 2007
Degree of rivalry
Weak
Competitor size
5
Zero-sum game?
Number of players
4
3
Storage costs
2
1
0
Similarity of players
Strong
Lack of diversity
Hard to exit
Low fixed costs

Easy to expand

Source: Datamonitor
DATAMONITOR
The Singaporean airline industry is fairly concentrated, although the rise of the budget
carriers has tended to decrease this; for traditional airlines, low-cost competitors have
provided a key competitive challenge in recent years. Consumers can switch between
different airlines quite easily, although the players at the high end of the industry
differentiate their products in terms of quality of service, which makes it difficult for
them to abandon completely the more expensive services they offer for low-budget
alternatives.
It is notable that the largest players in this industry own the majority of their aircraft
(although they lease a few facilities and services). In consequence, exit barriers are
high, since leaving the airline industry would require divestment of substantial - and
often quite specialized - assets. Expanding an airlines flight network may involve
providing more frequent flights to a destination or adding new destinations to its
service.
It is possible to do either of these in a cost effective manner by signing a code share
agreement with another airline. Fixed costs are likely to be high which also tends to
intensify rivalry. Some leading players have diversified into carrying airfreight and into
other transport businesses, which reduces rivalry by making them less reliant on
passenger airline ticket sales, and market revenue growth has been strong. There is
a moderate degree of rivalry in this market overall.
Page 18
LEADING COMPANIES
CHAPTER 6
6.1
LEADING COMPANIES
Singapore Airlines Limited

Table 4:
Key Facts: Singapore Airlines Limited
Address:
Telephone:
Fax:
Website:
Financial Year-End:
Ticker:
Stock Exchange:
07 D, Airline House, 25 Airline Road, 819829 Singapore,

SGP
65 654 15880
65 654 29605
www.singaporeair.com
March
SIAL
Singapore
Source: Company Website
DATAMONITOR
Singapore Airlines along with its subsidiaries is engaged in airline operations, airport
terminal services, engineering services, and other related activities. The group
operates East Asia, South West Pacific, Europe, Americas, and West Asia and Africa
regions.
The group divides its business into three segments: airline operations, airport terminal
services, and engineering services.
The airline operations of the group include passenger and cargo air transportation.
Singapore Airlines and its wholly owned subsidiary, Silk Air (Singapore) Private
carries the passenger air transportation. As of March 2008, Singapore Airlines
group's operating fleet consisted of 126 aircraft-112 passenger aircraft and 14
freighters. Out of these, the Singapore Airlines operated 98 passenger aircraft and
Silk Air operated 14 aircraft. In FY2008, Singapore Airlines carried a total of 19.1
million passengers. The group carried out its cargo air transportation through SIA
Cargo, a subsidiary of Singapore Airlines, with 14 B747 400 freighters. SIA cargo
operates in around 70 cities across the world.
As of March 2008, Singapore Airlines along with its code share agreements operated
726 weekly flights to 66 destinations in 36 countries. Taking into account code-share
services with Star alliance and partner airlines, the route network grew to 149
destinations in 46 countries.
The group's airport terminal services include airline catering services; passenger,
baggage, cargo and ramp handling; aircraft interior cleaning; aircraft security; and
aircraft linen laundry. The group carries these services through Singapore Airport
Page 19
LEADING COMPANIES
Terminal Services (SATS), a subsidiary of Singapore Airlines. As of March 2008,
SATS maintained a network of 40 airports in 9 countries in the Asia-Pacific region.
In FY2008, Singapore Airport Terminal Services (SATS) group secured many
contract renewals as well as attracted new clients at Singapore Changi Airport. SATS
was also engaged to handle Cebu Pacific operations at the Budget Terminal. The
group also launched the refurbished SATS Premier Club in Changi Airport's Terminal
1, and the installation of 14 Auto Check-in Machines at Terminal 2.
SIA Engineering Company (SIAEC), together with its 20 joint ventures across seven
countries, forms the SIAEC Group. The SIAEC Group provides maintenance, repair
and overhaul (MRO) of aircraft to more than 85 international airlines worldwide. The
group maintains six hangars and 22 in-house workshops in Singapore to provide
complete MRO services in airframe, component, engine, aircraft conversions and
modifications to major airlines from four continents.
At Singapore Changi Airport, SIAEC provides line maintenance services to more than
60 airlines passing through Singapore. The company also extended its network to
more than 40 airports in Australia, China, Indonesia and the Philippines.
Tradewinds Tours & Travel Private, a wholly owned subsidiary of SilkAir, is licensed
as a tour operator. It provides inbound and outbound package tours and hotel
accommodation and organizes conventions.
The group's other wholly owned subsidiaries include Singapore Aviation and General
Insurance Company, Singapore Flying College, SIA (Mauritius) and Sing-Bi Funds.
Some of SIA's associate companies include Abacus Travel Systems (in which the
company owns a 56% stake), Virgin Atlantic (49%), Service Quality Centre (50%),
Tiger Airways (49%), Asia Leasing (21%), Singapore Aircraft Leasing Enterprise
(35.5%) and RCMS Properties Private (20%).
The Singapore government owns 57% of SIA through Temasek Holdings. Singapore
Airlines is a member of Star Alliance, an international airline alliance comprising 18
international carriers.
Page 20
LEADING COMPANIES
Table 5:
Key Financials: Singapore Airlines Limited
Metric
Revenues
Net Income
Profit Margin
Total Assets
Total Liabilities
Employees
2004
6,476.8
497.6
7.7%
13,204.8
3,721.3
14,010
2005
7,970.3
897.3
11.3%
14,427.2
4,136.7
13,572
2006
8,851.6
823.2
9.3%
15,505.2
4,423.4
13,729
2007
9,616.8
1,412.4
14.7%
17,245.2
4,687.0
13,847
2008
10,597.5
1,417.8
13.4%
17,592.4
4,776.1
0
All in $ millions, except for employee numbers and margins

Source: Company Filings
Revenues & Profitability: Singapore Airlines Limited

Revenues
Net Income
Profit Margin
16.0%
12,000
14.0%
US$ Millions
10,000
12.0%
8,000
10.0%
8.0%
6,000
6.0%
4,000
4.0%
2,000
Profit Margin (%)
Figure 10:
DATAMONITOR
2.0%
0.0%
2004
2005
2006
2007
2008
Year
DATAMONITOR
Page 21
LEADING COMPANIES
6.2
British Airways Plc

Table 6:
Key Facts: British Airways Plc
Address:
Telephone:
Fax:
Website:
Financial Year-End:
Ticker:
Stock Exchange:
Waterside, Harmondsworth, UB7 0GB, GBR

44 20 8759 5511
44 20 8759 4314
www.britishairways.com
March
BAY, BAIRY
London, OTC Bulletin Board
DATAMONITOR
British Airways is engaged in the operation of international and domestic scheduled

air services for the carriage of passengers, freight and mail and the provision of
ancillary services. The company primarily operates in Europe and the Americas
region. The company also has its operations spread across Far East Asia, Australia,
Africa, Middle East and the Indian sub-continent. At the end of March 2008, the
company had 245 aircraft in service, compared to 242 in March 2007.
The company divides its business into two segments: airline business and non-airline
business.
The airline business comprises the company's main scheduled passenger and cargo
operations and revenues from ancillary services.
The company's passenger transportation services provide domestic and international
air transport: scheduled as well as chartered services. British Airways is one of the
world's largest scheduled international passenger airlines. The company's airline
route network comprises around 300 destinations all over the world. In FY2008, the
company carried more than 33 million passengers. The company's wholly owned
subsidiary, BA Connect, operates on regional (UK) routes.
The company's principal base is the Heathrow International Airport, where the
company carries an estimated 41% of the airport's passengers. In addition, the
company has a second base of operations at Gatwick, London. The company
operates offices, maintenance hangars, and other support facilities at Heathrow,
Gatwick and other UK airports. The company also occupies space and desks under
lease or license in airports throughout the UK including Manchester, Birmingham,
Newcastle, Edinburgh and Glasgow.
The company's cargo transportation services carried 805,000 tons of cargo to
destinations in Europe, the Americas and other parts of the world during the financial
year ended March 31, 2008. A majority of the cargo is carried in the holds of
Page 22
LEADING COMPANIES
passenger aircraft, while the balance is carried on leased or part-chartered freighter
aircraft, where market conditions allow their deployment.
The company also provides a variety of services to other airlines including cargo
handling at airports; airframe maintenance; computer and communications services;
and consultancy services.
Non-airline businesses include principally Airmiles Travel Promotions (the UK's most
popular travel loyalty scheme provider), BA Holidays (a subsidiary of the company
offers hotels, cars, sightseeing and transfer options across 250 destinations around
the globe), and The London Eye Company (a popular visitor attraction in the UK;
visited by over 3 million people a year).
Table 7:
Key Financials: British Airways Plc
Metric
Revenues
Net Income
Profit Margin
Total Assets
Total Liabilities
Employees
2003
15,380.0
144.0
0.9%
25,806.7
20,153.2
53,440
2004
15,123.9
260.1
1.7%
24,270.3
21,369.6
49,072
2005
15,548.0
784.2
5.0%
23,348.1
20,205.3
47,472
2006
17,034.4
934.2
5.5%
24,354.3
20,553.3
47,012
2007
16,988.4
580.2
3.4%
22,773.9
20,351.3
49,490

Revenues & Profitability: British Airways Plc
US$ Millions
Revenues
Net Income
Profit Margin
18,000
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
Profit Margin (%)
Figure 11:
DATAMONITOR
0.0%
2003
2004
2005
2006
2007
Year
DATAMONITOR
Page 23
LEADING COMPANIES
6.3
Cathay Pacific Airways Limited

Table 8:
Key Facts: Cathay Pacific Airways Limited
Address:
Telephone:
Fax:
Website:
Financial Year-End:
Ticker:
Stock Exchange:
5th Floor South Tower, 8 Scenic Road, Hong Kong,

International Airport, Cathay Pacific City, HKG
852 2747 1577
852 2560 1411
www.cathaypacific.com
December
00293
Hong Kong
DATAMONITOR
Cathay Pacific is an international airline based in Hong Kong. It offers scheduled

cargo and passenger services to 113 destinations in 37 countries and territories. The
company operates in Asia, Europe, China, Africa and the US. As of December 2007,
the company had 93 passenger aircraft and 19 freighters. The company transported
23,253,000 passengers and carried 1,642,000 tons of cargo in 2007. Cathay Pacific
ranks as is the world's 11th most profitable airline and 20th largest airline in the world
by virtue of its operating margin.
The company operates through three key business segments: passenger services;
cargo services; and catering, recoveries and other services.
The company's passenger services provide domestic and international air transport.
The company provides passenger services through the Hong Kong Dragon Airlines
Limited (Dragonair), a wholly owned subsidiary integrated in 2006. In 2006, five new
destinations were added to the Dragonair network and many routes were
strengthened to improve connections with Cathay Pacific's international network.
Cathay Pacific offers leisure travel service and also operates Hong Kong Airport
Services Limited (HAS), a wholly owned subsidiary of the company.
In 2007, the company began operations at Tokyo's Narita Airport. The company also
opened new lounges in Bangkok following the opening of Suvarnabhumi Airport.
AHK Air Hong Kong (AHK), a wholly owned subsidiary, undertakes the company's
cargo services. AHK is an all-cargo carrier focusing on express services for DHL
Express. AHK provides its overnight express cargo network to Seoul, Bangkok,
Osaka, Penang, Singapore, Taipei and Tokyo. It also utilizes the excess capacity of
Cathay Pacific's passenger airlines, such as Dragonair, to transport cargo.
The company provides catering, recoveries and other services through a number of
subsidiaries. This segment is also engaged in ramp handling services through Hong
Kong Airport Services (HAS) at the Hong Kong International Airport (HKIA). HAS is
Page 24
LEADING COMPANIES
one of the largest franchised ramp handling companies at the HKIA. The company
also provides aircraft maintenance, modification and overhaul services at HKIA.
Cathay Pacific also provides laundering and dry-cleaning services to airlines at HKIA.
The company provides engineering services through Hong Kong Aircraft Engineering
(HAECO), which is one of the largest aeronautical engineering companies in Asia,
and is the only service provider of both base and round-the-clock line maintenance at
Hong Kong International Airport. HAECO also provides B747 freighter conversion
services.
Table 9:
Key Financials: Cathay Pacific Airways Limited
Metric
Revenues
Net Income
Profit Margin
Total Assets
Total Liabilities
2002
4,240.9
510.5
12.0%
9,180.1
5,064.1
2003
3,790.8
167.0
4.4%
9,617.0
5,637.3
2004
5,006.7
566.1
11.3%
9,648.6
5,433.5
2005
6,524.7
422.7
6.5%
10,029.3
5,511.4
2006
7,790.1
547.5
7.0%
13,212.3
7,354.5

Revenues & Profitability: Cathay Pacific Airways Limited
US$ Millions
Revenues
Net Income
Profit Margin
14.0%
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
12.0%
10.0%
8.0%
6.0%
4.0%
Profit Margin (%)
Figure 12:
DATAMONITOR
2.0%
0.0%
2002
2003
2004
2005
2006
Year
DATAMONITOR
Page 25
MARKET FORECASTS
CHAPTER 7
7.1
MARKET FORECASTS

In 2012, the Singaporean airlines industry is forecast to have a value of $11.2 billion,
an increase of 73.7% since 2007.
The compound annual growth rate of the industry in the period 2007-2012 is
predicted to be 11.7%.
Table 10:
Singapore Airlines Industry Value Forecast: $ billion, 2007-2012
Year
$ billion
Si$ billion
% Growth
2007
2008
2009
2010
2011
2012
6.5
7.7
8.7
9.6
10.4
11.2
9.8
11.6
13.2
14.4
15.7
16.9
10.30%
19.00%
13.60%
9.20%
8.80%
8.10%
CAGR, 2007-2012:
11.7%
Source: Datamonitor
Figure 13:
DATAMONITOR
Singapore Airlines Industry Value Forecast: $ billion, 2007-2012
$ billion
% Growth
$ billion
10
8
6
4
2
0
2007
2008
Source: Datamonitor
2009
2010
2011
% Growth
20.0%
18.0%
16.0%
14.0%
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
12
2012
DATAMONITOR
Page 26
MARKET FORECASTS
7.2

In 2012, the Singaporean airlines industry is forecast to have a volume of 21.7 million
passengers, an increase of 24% since 2007.
The compound annual growth rate of the industry volume in the period 2007-2012 is
predicted to be 4.4%.
Table 11:
Singapore Airlines Industry Volume Forecast: Passengers

million, 2007-2012
Year
Passengers
million
2007
2008
2009
2010
2011
2012
17.5
18.4
19.2
20.0
20.9
21.7
blank
% Growth
4.80%
5.40%
4.20%
4.20%
4.30%
4.00%
CAGR, 2007-2012:
4.4%
Source: Datamonitor
Figure 14:
DATAMONITOR
Singapore Airlines Industry Volume Forecast: Passengers

million, 2007-2012
% Growth
25
6.0%
20
5.0%
4.0%
15
3.0%
10
2.0%
1.0%
0.0%
2007
2008
Source: Datamonitor
2009
2010
2011
% Growth
Passengers million
Passengers million
2012
DATAMONITOR
Page 27
MACROECONOMIC INDICATORS
CHAPTER 8
Table 12:
Singapore Size of Population (million) , 2003-2007
Year
Population (million)
% Growth
2003
2004
2005
2006
2007
4.3
4.4
4.4
4.5
4.6
1.80%
1.60%
1.50%
1.40%
Source: Datamonitor
Table 13:
DATAMONITOR
Singapore GDP (Constant 2000 Prices, $ billion), 2003-2007
Year
Constant 2000
Prices, $ billion
% Growth
2003
2004
2005
2006
2007
97.0
105.5
112.1
116.6
121.1
8.70%
6.30%
4.00%
3.80%
Source: Datamonitor
Table 14:
DATAMONITOR
Singapore Inflation, 2003-2007
Year
Inflation Rate (%)
% Growth
2003
2004
2005
2006
2007
0.5
1.6
0.4
0.5
0.2
238.40%
-75.90%
23.90%
-54.30%
Source: Datamonitor
DATAMONITOR
Page 28
Table 15:
Singapore Exchange Rate, 2003
Year
Exchange Rate
($/Si$)
2003
2004
2005
2006
2007
0.5738
0.59144
0.60074
0.62916
0.66348
Source: Datamonitor
DATAMONITOR
Page 29
APPENDIX
CHAPTER 9
9.1
APPENDIX
Methodology
Datamonitor Industry Profiles draw on extensive primary and secondary research, all
aggregated, analyzed, cross-checked and presented in a consistent and accessible
style.
Review of in-house databases Created using 250,000+ industry interviews and
consumer surveys and supported by analysis from industry experts using highly
complex modeling & forecasting tools, Datamonitors in-house databases provide the
foundation for all related industry profiles
Preparatory research We also maintain extensive in-house databases of news,
analyst commentary, company profiles and macroeconomic & demographic
information, which enable our researchers to build an accurate market overview
Definitions Market definitions are standardized to allow comparison from country to
country. The parameters of each definition are carefully reviewed at the start of the
research process to ensure they match the requirements of both the market and our
clients
Extensive secondary research activities ensure we are always fully up-to-date with
the latest industry events and trends
Datamonitor aggregates and analyzes a number of secondary information sources,
including:
National/Governmental statistics
International data (official international sources)
National and International trade associations
Broker and analyst reports
Company Annual Reports
Business information libraries and databases
Modeling & forecasting tools Datamonitor has developed powerful tools that
allow quantitative and qualitative data to be combined with related macroeconomic
and demographic drivers to create market models and forecasts, which can then be
refined according to specific competitive, regulatory and demand-related factors
Continuous quality control ensures that our processes and profiles remain focused,
accurate and up-to-date
Page 30
APPENDIX
9.2
Industry Associations
Association of Asia-Pacific Airlines
9th Floor, Kompleks Antarabangsa,
Jalan Sultan Ismail,
50250 Kuala Lumpur, Malaysia
Tel: 60 3 2145 5600
Fax: 60 3 2145 7500
http://www.aapairlines.org
International Air Transport Association
Travel Industry Designator Service, 800 Place Victoria,
P.O. Box 113, Montreal, Quebec, H4Z 1M1, Canada
Tel: 1 514 874 0202
Fax: 1 514 874 1753
http://www.iata.org
International Air Carriers Association
Rue Montoyer, 23,
BE-1000 Brussels, Belgium
Tel: 32 2 546 1060
Fax: 32 2 546 1070
http://www.iaca.be
9.3
Related Datamonitor Research

Datamonitor Industry Profiles
Global Airlines
Airlines in the Netherlands
Airlines in Asia-Pacific
Airlines in China
Airlines in Japan
Airlines in Europe
Airlines in France
Airlines in Germany
Airlines in Italy
Airlines in Spain
Airlines in the United Kingdom
Page 31

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Airlines in Singapore

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Five Forces Analysis

Singapore Airlines Limited

British Airways Plc

Cathay Pacific Airways Limited

Market Value Forecast

Market Volume Forecast

Related Datamonitor Research

Singapore Airlines Industry Value: $ billion, 2003-2007 ......................................9

Singapore Airlines Industry Volume: Passengers million, 2003-2007 ...............10

Singapore Airlines Industry Segmentation: % Share, by Value, 2007...............11

Key Facts: Singapore Airlines Limited ..............................................................19

Key Financials: Singapore Airlines Limited .......................................................21

Key Facts: British Airways Plc ..........................................................................22

Key Financials: British Airways Plc ...................................................................23

Key Facts: Cathay Pacific Airways Limited .......................................................24

Key Financials: Cathay Pacific Airways Limited................................................25

Singapore Airlines Industry Value Forecast: $ billion, 2007-2012 .....................26

Singapore Airlines Industry Volume Forecast: Passengers million, 2007-2012.27

Singapore Size of Population (million) , 2003-2007 ..........................................28

Singapore GDP (Constant 2000 Prices, $ billion), 2003-2007 ..........................28

Singapore Inflation, 2003-2007.........................................................................28

Singapore Exchange Rate, 2003 ......................................................................29

Singapore Airlines Industry Value: $ billion, 2003-2007

Singapore Airlines Industry Value: $ billion, 2003-2007

Singapore Airlines Industry Volume: Passengers million, 20032007

Singapore Airlines Industry Volume: Passengers million, 20032007

Singapore accounts for a 7.4% share of the Asia-Pacific industry's value.

Singapore Airlines Industry Segmentation: % Share, by Value,

Singapore Airlines Industry Segmentation: % Share, by Value,

FIVE FORCES ANALYSIS

FIVE FORCES ANALYSIS

Forces Driving Competition in the Airlines Industry in

Score for each force is mean of scores for its drivers.

FIVE FORCES ANALYSIS

Drivers of Buyer Power in the Airlines Industry in Singapore,

Strength of buyer power

Backw ards integration

Scores: 1= weak driver...5=strong driver

FIVE FORCES ANALYSIS

Drivers of Supplier Power in the Airlines Industry in Singapore,

Strength of supplier power

Forw ard integration

Scores: 1= weak driver...5=strong driver

FIVE FORCES ANALYSIS

Factors Influencing the Likelihood of New Entrants in the

Likelihood of new entrants

Low -cost sw itching

Scores: 1= weak driver...5=strong driver

FIVE FORCES ANALYSIS

FIVE FORCES ANALYSIS

Factors Influencing the Threat of Substitutes in the Airlines

Low -cost sw itching

Scores: 1= weak driver...5=strong driver

FIVE FORCES ANALYSIS

Drivers of Degree of Rivalry in the Airlines Industry in

Low fixed costs