Imagine you are Candy lying in bed, unable to sleep at the end of the day Essay

Lying on my bunk bed in my barn I stared at the wooden ceiling finished by brown boards joint together. The brown boards were filled with deep cracks, weathered and old, reminding me of my aged, ailing, sheepdog who was infested with rheumatism. As I thought of him, I unconsciously plunged into a deep depression and waves of emotions swept over me. My eyes blurred with tears as I thought of my old dog. Again and again, I tried to fall asleep, tossing and turning on the bed, but the task seemed unattainable. I leaned up and turned my face to the window, staring out at the pale crescent moon which shone like a silvery claw as well as the blanket of stars that stretched to infinity, and let an audible sigh. Today was a very disheartening day for me. I have never felt as despondent and fatigue before. Not only was my heart filled with sorrow, it was filled with pangs of guilt. I had allowed Carlson to shoot my own dog Bingo, which I had own since he was a puppy. Bingo was innocent, and had done nothing wrong. Although he was diseased with rheumatism, did that give Carlson the right to kill Bingo? Was it right to do that? Bingo was not just a dog to me; he was like a friend, a best friend. We spent many cherished and unforgettable moments together, including herding sheep together. He was my long life companion, and without him, life would never be as complete as it used to be. Even though Bingo was now toothless, foul smelling, brittle with age and would never run as fast as my herd sheep like he did when he was younger, my love for him remained unchanged. I valued all of the elation and devotion that my once splendid dog had brought to me in my life. Did I make the right choice? I could not comprehend why nobody understood me. Did Slim and Carlson really think that another dog could substitute Bingo? Did they not have any feelings for Bingo? Bingo was one of a kind, and nothing would be able to supplant him. Now that Bingo was gone, life feels so empty and insecure. Being a faithful dog Bingo was, he used to follow me everywhere. Bingo was there during my ups and downs. Even though he was incapable of speaking, it was as if his eyes were able to communicate every single thought of his. The sound of the gunshot played repeatedly in my mind. I knew that my companion did have limited time left in his life, and that he would pass away eventually even if it were not for the advance killing of Bingo. However, tears started rolling down my cheeks as I pondered over whether the shot had caused any pain for Bingo. Though Carlson promised that the shot would not hurt Bingo in anyway, I could not restrain myself from thinking about it. I would rather have taken care of Bingo than cause any pain for him, even if it might be a burden. Then again, I thought through about the fact that it might have been better that Bingo died, because it might be better to terminate his life since he was in so much pain. I started regretting about letting Carlson kill Bingo, instead of killing the dog himself. I realized the responsibility to kill my own dog. â€Å"I’m sorry. I love you, and I would never forget you† I whispered. Calming myself down, I started envisaging what he had discussed with George and Lennie, the two new workers, about our dream house, visualizing and fascinating at the inspiration of how our house would be like after we manage to buy it and started to feel much more relieved. Ripples of excitement burst through me as I thought of how our future house would be like, and I became even more determined to chip in $350 to buy the house. My final decision was made; I would chip in to buy the house. Thinking of Lennie, I recalled being so astonished that he and Curly gotten into such a big fight. I had never seen Curly that infuriated before. Lennie had stood rooted to the ground helplessly not knowing what to do, receiving all the punches by Curly, staring and requesting George for help. He could not make the decision for himself and only after George told him to fight back did I truly realize how strong Lennie was. I had never imagined him being capable of grabbing onto one’s hand especially till there would be a need for him to be sent to see the doctor. I started wondering how Lennie was feeling, and hoped that he was not regretting it too much. Lennie most probably did not mean to do that deliberately. Nonetheless, I prayed that Curly was healthy and that nothing serious had come over him.

Singapore International Airlines

Contents COVER LETTER4 1PROSPECTS OF ECONOMY5 1. 1Global Financial Crisis5 1. 2Oil Prices5 2PROSPECT OF AIRLINE INDUSTRY5 2. 1General Trend of the Airline Industry5 2. 2Analysis of competitiveness of industry6 3VALUE CHAIN7 3. 1Training of Pilots/ Cabin crew/ Ground handling staff7 3. 2Branding and publicity7 3. 3Reservations and Ticketing7 3. 4Ground Operations7 3. 5In-flight Services8 3. 6Aircraft Operations8 3. 7Fleet Management and maintenance8 3. 8Customers8 4SINGAPORE AIRLINE’S COMPETITIVE ADVANTAGE8 4. 1The 4 components of SIA’s competitive strategy8 5FINANCIAL STATEMENT ANALYSIS9 5. Operating Performance Analysis9 5. 2Liquidity Analysis10 5. 3Solvency Analysis10 5. 4Profitability Analysis10 5. 5Stock Prices Analysis11 5. 6Comparison with Industry Average11 6SINGAPORE AIRLINES’ NON-FINANCIAL PERFORMANCE11 6. 1Learning and Growth11 6. 3 Internal Processes12 7RECOMMENDATIONS12 8APPENDIX13 9REFERENCES32 Cover Letter To: Ms Leo, CEO From: Investment Team Subje ct: Investment Report – Singapore Airlines Ltd This report contains an analysis of Singapore Airlines Ltd (SIA) with response to your query on desirability of making a fairly large medium-to-long term investment in the shares of SIA. Firstly, an analysis of the prospects of the airline industry which SIA operates in would be given to develop a better understanding of the business environment. The current state of economy will also be one of the highlights as it is perhaps one of the biggest concerns amongst investors. Next, the company’s value chain and competitive strategies would also be presented and analyzed to justify if SIA have the ability to sustain its growth despite numerous world-wide challenges such as the financial crisis and high oil prices. On top of that, an analysis of the company’s past financial statements and especially for the year 2007/08 would be presented to analyze the profitability and quality of earnings. For a more holistic approach, analysis of the company and industry using non-financial performance measures would also be used to address issues where financial measures are insufficiently informative. Comparisons with the industry and main competitors will also be made along the way to show how they fare and if the stock price has the potential to grow amongst stiff competition in the airline industry. Lastly, recommendations on the desirability of the investment would be given on our stand based on our analysis. 1Prospects of Economy 1. 1Global Financial Crisis The world’s economy is currently facing one of the worst financial threats ever since the Great Depression in 1929. Demise of US banks such as Lehman Brothers were due to huge corporate debt default which caused them to incur a large impairment loss. This tight credit crunch caused the downfall of the global stock market with fearful investors withdrawing their investments. In response to the gloomy outlook of the worldwide economy, assurance was given by the G7 as they announce to unveil a 5-point plan to counter the crisis and to stabilize the financial market. 1. 2Oil Prices The airline industry was drastically hit by the rocketing of aviation fuel prices for the past one year , forcing many companies to increase air ticket prices to cover the increased expenditure. Expenditure is accelerating at a faster rate than revenue; hence this has caused many airline companies to suffer a loss in operating profit. However, basket average crude oil prices has been on a declining trend. â€Å"Prices fell $18. 1/b or more than 14% in August, declining sharply from the record levels reached in July,† according to OPEC Monthly Oil Market Report September 2008. 2Prospect of Airline Industry 2. 1General Trend of the Airline Industry The current situation in the airline industry remains bleak. It is caused by a mix of weakening passenger demand, particularly i n the First and Business Classes, and the existing uncertain global economic outlook. Cargo demand has also plummeted, with a 6. 5% drop in demand for Asia-Pacific carriers in July 2008. However, SIA has been able to anticipate changes and continue to break new grounds. The procurement of A380 Airbus has helped SIA achieve substantial cost savings. In addition, conversion of five Airbus A340-500 aircraft into an All-Business Class set-up, and constantly ensuring that capacity best matches SIA’s demand , have proved to be profitable for SIA alone despite the overall weakening passenger demand. 2. 2Analysis of competitiveness of industry Since SIA’s overall profitability is largely influenced by the presence of competition, we have used Porter’s Model of Five Forces to analyze the competitiveness of the industry. Threats of substitutes Over the years, the airline industry has become increasingly competitive with entry of new competitors such as budget airlines. As such, some passengers are choosing to fly budget airlines for short travelling distances. Hence, demand from customers are becoming relatively price elastic, forcing some firms to lower their prices in order to stay competitive. Buyer Bargaining Power Buyer bargaining power is increasing due to the price transparency concerns of customers, as they can choose which airline to take. However, on the industry level, bargaining power is low. Supplier Bargaining Power Supplier bargaining power in the airline industry is high as the input required (aircraft, aviation fuel) is unique and there are no similar substitutes available. Rivalry among existing players The intensity of competition among airlines has increased substantially over the years as firms are narrowing the gap of the service quality and on board amenities. This has led to increasing emphasis in effective cost management for firms. Threat of Entry There are substantial barriers to entry for the industry due to the high initial fixed outlay and proprietary know-how. However, the entry of budget airlines poses potential threats to the existing players. Many firms have responded by buying shares in firms of budget airlines. 3Value Chain 3. 1Training of Pilots/ Cabin crew/ Ground handling staff SIA’s places great emphasis in training by continuously sending its employees for comprehensive and rigorous training. To present only the best service, SIA also imposes stringent selection tests of employees at the recruitment stage. 3. 2Branding and publicity SIA’s spending on advertising has been static over the recent years. Recently, TBWA replaced Batey agency which popularised the iconic Singapore Girl . SIA adopts a global approach to advertising in the international media, keeping the Singapore Girl icon as its representation of high quality service. 3. 3Reservations and Ticketing SIA’s website allows flight timetable downloads for gadgets such as pocket PCs and palm tops and synchronizes the data when it is amended. SIA’s ticketing offices are located in over 70 countries and it operates 24 hour telephone reservations and service call centres to help its customers. The use of interline e-ticketing allows ticket information to be stored in SIA’s secured database and shared among airlines on the customer’s itinerary. 3. 4Ground Operations SATS handles all ground operations which includes baggage/ airfreight handling and apron services. Technology such as Internet check-in, biometric checks and downtown check-in services are ingrained to speed up processing time. The application of Fully Automated Seamless Travel (FAST) integrates three processes comprising airline check-in, pre-immigration security checks and immigration clearance. SIA’s loyalty customers also have the privilege of priority check-in and enjoying exclusive facilities at its lounges. 3. 5In-flight Services Its in-flight on-demand entertainment system has over a thousand demand options and office software for passengers. Also, SIA also integrated the full size ‘space-bed’, on-board email and internet services in its First and Business classes. 3. 6Aircraft Operations SIA flies directly to 66 destinations and has recently increased flights to more popular destinations. SIA has transformed its cabins to full business class seating for its SG-NY flights and will be doing the same for its SG-LA Flights. . 7Fleet Management and maintenance SIA maintains young fleets of passenger and cargo planes. These fuel efficient planes are on the average age of 6-7yrs. It leases 34 out of its 126 aircraft on an agreement of range 4. 7-10. 5 years with options to sub-lease. SIAEC has also joined Airbus’ Maintenance Training Network, givin g it access to Airbus’ latest training methodologies. 3. 8Customers SIA’s KrisFlyer customer retention scheme has been effective to date and it now focuses on services for wealthy and business travellers, in conjunction with the PPS club . Singapore Airline’s Competitive Advantage Through the value chain comparison with competitors, SIA has achieved both differentiation and low cost strategies in its operations and stands out as a leader in the industry. 4. 1The 4 components of SIA’s competitive strategy 4. 1. 1Rigorous service design, development and continuous innovation SIA’s service development department constantly researches for and tests out new innovations. It uses the centralized innovation approach which involves three-step processes. The effective feedback channel helps to ensure that any useful suggestions are adopted. Employees are also sent on ‘spy flights’ on competitor’s planes to report their findings . SIA’s continuous innovation supports cost effectiveness and it transfers this margin to its customers. Some examples are improvements in seat and screen size, as well as in-flight services, which compares favourably to its competitors . 4. 1. 2Profit and cost-cutting mentality of employees SIA’s employees are well aware of the implications of high costs and they always strive to achieve customer satisfaction in a cost effective manner. Compared to the industry, SIA maintains a relatively young yet fuel efficient fleet. 4. 1. 3Holistic Staff Development All employees have a training and development plan which includes both functional and interpersonal skills. SIA’s aircrew is organized in teams of 13 and flies together for at least 2 years . Hence, these have helped to develop team bonding for delivering excellent service. 4. 1. 4Strategic synergies through diversification and world-class infrastructure SIA has reaped strategic synergies through diversification of its subsidiaries: SIA Engineering Company, SATS, SATS In-flight catering and Tiger airways. Diversifying has helped to avoid tough competition and to capture a larger market share by offering more types of services. Hence, SIA still gains the general market share through its 49% stake in the low-cost carrier Tiger Airways while focusing on wealthy and business travellers, 5Financial Statement Analysis 5. 1Operating Performance Analysis Revenue from the company’s operating activities increased by 12. 5% and expenditure increased by 7. 7%, causing the operating profit to increase by 60. 1% from 2007. Also, net cash provided by operation activities was has been positive and on an increasing trend. This tremendous improvement in operating profit is due the increased demand for SIA’s flights. 5. 2Liquidity Analysis 5. 2. 1Quick Ratio The ratio dropped from 1. 4 in 2007 to 1. 29 in 2008. This is largely due to the company recognizing more sales in advance of carriage under current liabilities. However, the overall quick ratio trend has been greater than 1. This indicates the relatively stronger liquidity position to meet current debts, especially compared with its competitors . 5. 3Solve ncy Analysis 5. 3. 1Debt-to-Equity Ratio The ratio dropped from 0. 12 in 2007 to 0. 11 in 2008. The result projects an optimistic outlook because the company was able to complete their purchase of new A380 planes without relying on outside funds and the value of the ratio is lower than its competitors. This indicates SIA’s strong ability to generate cash from operating activities for future growth. 5. 4Profitability Analysis 5. 4. 1Return on Average Equity Holders’ Funds The return on average equity holders’ funds dropped from 14. 9% in 2007 to 13. 56% in 2008. The major reason behind the decrease was due to sale of SIA building and investment in Singapore Aircraft Leasing Enterprise Pte Ltd in 2007. The extraordinary events led to a significantly large amount of profit in 2007. Hence, the drop in return on average equity holders’ funds is not a big concern. Compared to the 2006 figure of 9. 61% and 2005 figure of 11. 01%, the company has been more successful in generating returns for its equity holders. 5. 4. 2Earnings after Tax per Share (diluted) This is a conservative measure that takes into account of the employees exercising their share options. The diluted earnings after tax per share dropped from $1. 71 in 2007 to $1. 66 in 2008, largely due to the one time sale of assets in 2007 mentioned above. The drop is not a concern because it still shows an increasing trend. 5. 4. 3Dividends per Share The overall trend of the dividend payout is positive and investors are expected to receive a fair share of dividends annually . 5. 5Stock Prices Analysis The general price trend of SIA stocks shows an upwards inclination. It reached a peak at around November 07 and prices have been decreasing since. One of the reasons why stock prices started to decrease is due to rising fuel prices. In view of the recent financial turmoil, the unstable economy is expected to have a significant impact on stock price. As compared to its major competitors, the stock price decrease was fortunately not as drastic. Also, we should note that this is a temporary mark to market loss suffered and not a permanent impairment loss incurred by SIA. 5. 6Comparison with Industry Average Overall, SIA’s financial performance is above industry average in comparison. 6Singapore Airlines’ Non-Financial Performance Non-financial performances are an integral part of a company which is bound to affect a company’s financial position in the long run and will determine its sustainability amidst stiff competition. A comparison with their closer competitors is also being considered . 6. 1Learning and Growth SIA places large emphasis on its employees. One of its strategies to train its employees includes company-wide Core Developmental Competency Framework, which seeks to help staff identify their strengths and opportunities for improvements. SIA Group also has seven training schools to deliver training in each core functional areas. This includes the Transforming Customer Service (TCS) initiative and general management training. Furthermore, SIA has in place share-based remuneration programmes which aim to more directly align the interests of senior management with the interests of shareholders. . 2Customer perspective One of SIA’s strengths lies in its superior customer service and excellent facilities on board. On top of that, SIA also places large emphasis on the safety of its customers on air and have introduced various new methods and equipment on board with the customers’ welfare and convenience in mind. SIA’s efforts in providing excellent customer service ar e evident by the many awards and accolades they garnered over the past years. These awards have enhanced their reputation and enabled them to dominate in the Airline industry. 6. 3 Internal Processes SIA’s Value Chain was analyzed to gain better understanding of its internal process. 7Recommendations From the above analysis, we understand that the airline industry that SIA operates in is extremely volatile and competitive. Coupled with the problem of rising fuel prices, the future do poses many challenges for SIA. However, having analyzed SIA’s strategies and operation style, we can see that SIA has been effective in managing the challenges faced to date, despite it being a relatively small and young airline compared to the other players in the industry. This is evident from the good financial performance of SIA. Thus, our team is optimistic about SIA’s growth prospects for the next 5 to 10 years and we predict that an attractive return can be guaranteed if the shares were bought. However, in view of the financial turmoil, we suggest putting the investment plan on hold first and wait for share prices to plummet to a sufficiently low point before buying the shares. Ultimately, this will help our company to take advantage of the low share price and maximize returns in the future. 8Appendix Appendix 1 Article 1 From The Times October 9, 2008 Interest rate cuts overshadowed by spectre of recession IMF says world is heading for major downturn Patrick Hosking, Banking and Finance Editor Interest rates across the world were slashed yesterday as central banks took unprecedented emergency action in an effort to contain the worst economic threat since the Great Depression. Hours after the Government unveiled a ? 500 billion rescue package for the British banking system, the Bank of England joined forces with its counterparts across the Western world to cut rates by half a percentage point. The extraordinary level of coordination was designed to demonstrate resolve in the face of financial panic but failed to restore confidence in the stock market. Share prices rallied briefly in London but the FTSE 100 index closed down 239 points at 4,367, its lowest point for four years. In its bleakest forecast for years, the International Monetary Fund said that the world was entering a major downturn in the face of â€Å"the most dangerous shock . . . since the 1930s†. The US and Europe were either on the brink of or already in recession. Appendix 2 Article 2 Home > Breaking News > Money > Story Oct 11, 2008 G7 vows to fight crisis WASHINGTON – GROUP of Seven finance chiefs on Friday unveiled a five-point plan to fight the global economic firestorm and restore confidence in the financial system by shoring up struggling banks. ‘The G7 agrees today that the current situation calls for urgent and exceptional action,' the US Treasury said in a statement on behalf of the G7 nations. We commit to continue working together to stabilise financial markets and restore the flow of credit, to support global economic growth,' it added after the finance ministers and central bank chiefs from the G7 nations – the United States, Germany, Japan, France, Britain, Italy and Canada – met in Washington. Appendix 3 Graph 1 Appendix 4 Newspaper Extract 1 The Straits Times, October 19 2008 Money Section Appendix 5 Exhibit 1 Airline Industry†™s Value Chain and competitive advantage The diagram below describes the Primary activities that is included in SIA’s Value Chain Appendix 6 Article 3 SIA stays the course with its branding strategy American advertising agency TBWA took over the coveted account from Singapore- based agency Batey – the name behind SIA's ad campaigns for the past 35 years.. †¦ Many marketing experts, who were looking for a significant change in SIA's branding strategy, were surprised by the lack of it, while others felt the ads weren't much of a head turner†¦ SIA spokesman Stephen Forshaw says critics have got it all wrong. Branding is not only about advertising. More importantly, it is about the substance behind the brand. ‘It perplexes me that people think the key to branding is advertising. It's not,' he says. ‘The key to branding is getting the fundamentals of the business right first. ‘Advertising is merely a way of communicating between the organisation and its customer base. ‘ †¦ †¦ But there remains a key constant – the Singapore Girl icon. ‘The representation of the Singapore Girl is what the brand delivers to customers – that is very high quality service,' Mr Forshaw says†¦. †¦ A significant application of biometric technologies currently being developed at SIA’s hub at Changi Airport in Singapore is the FAST (Fully Automated Seamless Travel) process. In November 2004, a six-month pilot test of FAST has been initiated based on a biometrics technology that integrates three processes: airline check-in, pre-immigration security checks, and immigration clearance†¦ †¦ This initiative at Changi Airport is a world’s first of integrating these processes with the clear objective of driving service excellence at airport operations and SIA’s ground services, while at the same time driving efficiency and improving security.. Appendix 7 Table 1 Kris Flyer Programs The table below describes the KrisFlyer programs of SIA. Level Benefits Young Explorer Club†¢Earn and redeem miles for free travel just like other KrisFlyer members †¢Miles earned go towards qualification for higher tiers of membership Kris Flyer Elite Silver†¢25% bonus on actual miles flown whenever you fly Singapore Airlines, SilkAir or Virgin Atlantic. †¢Priority Reservation Waitlist and Priority Airport Standby Kris Flyer Elite Gold†¢25% tier bonus on actual miles flown each time you credit the miles you earn on Singapore Airlines, SilkAir and Virgin Atlantic. †¢Increased Check-in Baggage Allowance (20kg, or one extra piece of baggage). Priority Airport Check-in and boarding and baggage handling †¢ Access to Star Alliance Gold Lounges. PPS Club†¢Exclusive Gift Vouchers to purchase items from our inflight shopping service, KrisShop. †¢Enjoy reduced or waived fees for various KrisFlyer services. †¢Travel Assistance and Insurance. †¢25% tier bonus on actual miles flown each time you credit the miles you earn on Singapore Airlines, SilkAir and Virgin Atlantic. †¢If your reservation for a seat in First or Raffles/Business Class cannot be confirmed immediately, you will be offered the option of a guaranteed seat in Economy Class on the same flight. 100% increased check-in baggage allowance on all Singapore Airlines and SilkAir flights †¢ Extended Use of Silver Kris Lounges. †¢Access to Virgin Atlantic Clubhouses. Solitaire PPS Club †¢25% tier bonus on actual miles flown each time you credit the miles you earn on Singapore Airlines, SilkAir and Virgin Atlantic to your KrisFlyer account. †¢Supplementary Card for your spouse, who will be accorded the same level of service as you whenever they travel. Appendix 9 Article 5 Cost-effective service excellence: lessons from Singapore Airlines An additional source of intelligence is SIA’s â€Å"spy flights†, where advisors travel with competitors and report on their offerings†¦ †¦ SIA builds team spirit within its 6,600 crew members through its â€Å"team concept†, where small teams of 13 crew members are formed and then fly together as far as possible for at least two years. This leads to the development of team spirit and social bonds within the team that reinforces the culture of cost-effective service excellence and the peer pressure to deliver SIA’s promise to customers†¦. Appendix 10 Table 2 The tables below show the comparison between the in-flight facilities provided by SIA and their competitors. Airline comparison in terms of screen size AirlineEconomy ClassBusiness ClassFirst ClassOthers Singapore Airlines10. 6’15. 4’ LCD23’ LCD (1280Ãâ€"768 Pixels)100 movies, 180 TV shows, 20 radio stations, 65games, 700music CDs, office software, noise cancelling headsets Cathay9’ widescreen15’ widescreen17’ widescreen100 movies, 350 TV shows, 22 radio stations, 888 CDs, 70 interactive games, noise cancelling headsets Qantas6. 3’10. 2’8. 3’60 movies, 200 TV shows, 20 radio stations, 10 games, 150 music CDs, noise cancelling headsets Airlines comparison in terms of in-flight services AirlineSingapore AirlinesQantasCathay 1st Class- 88. 9cm wide, fine grain leather seats – Flat bed – Adjustable table height – Dressing table with mirror – Plush duvet, fluffy pillows – Ferragamo Toiletries – Givenchy Sleeper Suite and suede slippers – Power outlet – Noise cancelling headsets- 198cm long flat bed – Light meals/ snacks available anytime – Built in massage capability in each chair – Payot paris toiletries – Akira Isogawa pyjamas, eyeshades – Power outlet – Noise cancelling headsets- 205. 7cm long, 63. 5cm wide flat bed – Personal Closet for clothes, hoes, mattress, pillows – Extra large tray table – Mood Lighting – Adjustable reading light – Built in massage capability in each chair – Acca Kappa Amenities set – Power outlet – Noise cancelling headsets Business Class- 1-2-1 layout with 76cm width seats – Flat bed – Light duvet, large pillows – Computer usage with USB ports and keyboard – Business lounge – Snack corner – Eau de toiletries – Power Outlet – Noise cancelling headsets- 2-2-2 layout – Shoe compartment – Coat Hook – Built in massage capability in each chair – Meal and cocktail table – Adjustable reading light – Inflight bar – Marc Newson amenities kit with Korner skincare product – Power Outlet – Noise cancelling headsets- 2-3-2 layout with 198cm long, 52 cm wide seats – Flat bed – Built in massage capability in each chair – Extra large tray table – Mood Lighting – Adjustable reading light – Extra large tray table – Agnes B Amenities kit with Murad/Dermalogica skincare products – Power Outlet – Noise cancelling headsets Appendix 11 Table 3 Average Age of Aircraft Average Age of Aircraft, 31March 20082007-20082006-20072005 – 20062004 – 2005 SIA Passenger Fleet (Months)77757664 SIA Freighters (Months)88766865 Industry Wide (Months)162160159157 Appendix 12 Table 4 Operating Performance of Company The CompanyCathay Qantas in S$ million 200820072006200520082008 Revenue12,759. 6011,343. 9010,302. 809,260. 109753. 27715051. 7 Expenditure-11,115. 60-10,316. 90-9,651. 80-8,562. 20-8751. 65-13774. 2 Operating Profit1,644. 001,027. 00651697. 91001. 6271277. 527 Percentage Change60. 10%57. 80%-6. 70% 33. 40% (compared to previous year) Cash Flow from Operating Activities4269. 43163. 52309. 62786. 62,540. 032,101. 91 Appendix 13 Table 5 Quick Ratio Calculation Quick Ratio = Quick Assets/ Current Liabilities (Quick Assets exclude inventories & prepaid assets) The GroupCathayQantas n S$ million 200820072006200820082008 Current Assets8,313. 308,248. 805,938. 304,943. 90339075616. 2 Inventories507. 7534. 1517. 5442. 5882215. 7 Section 44 tax prepayments-46. 7166. 2221. 4– Prepayments104. 986. 1—- Quick Assets7,700. 707,581. 905,254. 604,280. 00330255400. 5 Current Liabilities5,957. 705,258. 404,842. 503,901. 60273947603. 9 Quick Ratio1. 291. 4 41. 091. 101. 210. 71 Appendix 14 Table 6 Debt-to-Equity Ratio Calculation Debt-to-Equity ratio shows the composition of debt and equity in the capital structure and measures the degree to which the company relies on outsider for funds. Debt-to-Equity Ratio = Total long-term liabilities/ Total stockholders' equity The GroupCathayQantas in S$ million 200820072006200520082008 Long-term Liabilities1,599. 201,805. 801,824. 402,333. 304860. 20913. 5022 StockholderEquity15,125. 2015,100. 0013,470. 6012,342. 3016759. 325753. 29 Debt-to-Equity Ratio0. 110. 120. 140. 190. 290. 16 Appendix 15 Table 7 Return on Equity Holder's Fund Calculation Return on equity holders’ funds = Profit attributable to equity holders of the Company / Average equity holders’ funds (Percentage) The GroupCathayQantas 200820072006200520082008 in S$ million Profit attributable to equity holders2049. 2128. 81,240. 701,309. 507023969 Equity Holder's funds15,125. 2015,100. 0013,470. 6012,342. 30505495731. 2 Average equity holders' funds15112. 614285. 312906. 4511898. 747967. 55683. 05 Return on equity holders' funds13. 56%14. 90%9. 61%11. 01%14. 64%17. 05% Appendix 16 Table 8 Earnings after Tax per Share (diluted) Calculations Earnings afte r tax per share (diluted) is computed by dividing profit attributable to equity holders of the Company by the weighted average of ordinary shares in issue excluding treasury shares, adjusted for the dilutive effect on the exercise of all outstanding share options. The Group 2008200720062005 Profit attributable to equity holders of the Company(S$ millions)2,049. 402,128. 801,240. 701,352. 40 Adjustment for dilutive potential ordinary shares (S$ millions) (5. 10) (4. 80) (3. 60)- Adjusted net profit attributable to equity holders of the Company (S$ millions)2,044. 302,124. 001,237. 10- Weighted average number of ordinary shares in issue (million)1,216. 001,233. 601,219. 501,218. 20 Adjustment for dilutive potential ordinary shares (million)14. 910. 02. 1- Adjusted weighted average number of ordinary shares (million)1,230. 901,243. 601,221. 601,218. 0 Diluted earnings per share (cents)166. 1170. 8101. 3111. 0 Appendix 17 Table 9 Dividend Schedule The Group 2008200720062005 Interim dividend (cents per share)20. 015. 010. 010. 0 Proposed final dividend (cents per share)80. 035. 035. 030. 0 Dividend cover (times)1. 71. 72. 32. 8 Appendix 18 Exhibit 3 SIACathay PacificQantas Airways SIACathay PacificQantas Airways 52 Weeks Range Volatility47%63%59% H ighest Price in 52 Weeks$19. 90$24. 00$6. 06 Lowest Price in 52 Weeks$10. 52$8. 77$2. 50 Appendix 19 Table 10 Figures for Industry Averages are taken from Reuters (www. reuters. com) Industry AverageGroup's Average Quick Ratio0. 921. 29 Interest Coverage0. 0426. 42 Return on Assets0. 19%8. 10% Return on Equity-0. 04%13. 60% Appendix 20 Table 11 Non Financial Evaluation in the form of a BSC Learning and Growth Aspects of MeasurementMeasuresEvaluation Employee DevelopmentEmployee training programmes implemented †¢Implementation of a company-wide Core Developmental Competency Framework. Consisting of eight core competencies, it allows staff to identify strengths and opportunities for improvement. †¢Three areas have been prioritised for follow-up action: Pay and Benefits, Career Development, and Working Relationships. This shows that they are concerned about its employees’ welfare, not just giving them financial satisfaction. †¢Introduced a web-based self-learning security program for cabin and technical aircrew. †¢Seven training schools Employee satisfactionEmployee benefits schemes †¢Short-Term Incentives Short-term incentives generally take the form of an annual profit-sharing bonus. Payment of the variable bonus is based on employees achieving the target levels in the following: (i) SIA Group’s Return on Shareholders’ Fund; (ii) SIA Company’s Operating Profit Margin; and iii) SIA Company’s Passenger Load Factor †¢Long-Term Incentives The Company has put in place share-based remuneration programmes allowing employees to share in its growth and success. These plans comprise the Performance Share Plan (PSP), Restricted Share Plan (RSP) and Employee Share Option Plan (ESOP). InnovationNew technology and innovations†¢KrisWorld, Singapore A irlines' award-winning and ever-expanding inflight entertainment system, offers customers a wide range of entertainment options. Customers can choose from a variety of movies, TV programmes, music CDs and channels. There is also an extensive selection of video games and interactive applications including Berlitz Word Traveler, a fully interactive learning programme. These techonology implemented allowed them to be one of the best airlines in the industry to offer such entertainment system. †¢Uses Three-step centralized innovation process. Examples are the recently launched design of the Airbus A380 cabin. Customer Overseas presenceNetwork Development†¢As of 31 March 2008, Singapore Airlines operated 726 weekly flights to 66 destinations in 36 countries. Including codeshare services with Star Alliance and partner airlines, the Airline’s global route network grew to 149 destinations in 46 countries. †¢In August 2007, SIAEC acquired 100% of Aircraft Maintenance Services Australia to offer line maintenance services at international airports in Australia. The acquisition is part of the Company's continuing effort to capture a larger slice of the global maintenance, repair and overhaul (MRO) market by extending its reach o new growth markets and to broaden the span of its services to offer total maintenance solutions to airlines. SafetySafety measures introduced†¢Introduced a web-based self-learning security program for cabin and technical aircrew. It also successfully completed its second renewal of the IATA Operational Safety Audit. The audit covered key operational areas across the Airline, including flight safety, emergency management, engineering maintenance and ground handling. The Airline is also working closely with other safety organisations, such as IATA and AAPA, to promote and enhance flight safety. Service rangeNew services improvements to current flights†¢KrisShop launches new online sales portal krisshop. om, featuring an online catalogue and selections exclusive to Singapore †¢ECONOMY CLASS Improved design and use of light, thinner materials which provide more personal space and legroom. Other features include a non-intrusive reading light installed underneath the seatback screen, personal storage space for spectacles and smaller items, and adjustable footrest. †¢BUSINESS C LASS The A380 is configured with 60 Business Class seats. All seats offer direct access to the aisle, with a 1-2-1 forward-facing configuration. The new Business Class seats onboard the A380 are the widest in its class for any airline. At 85-cm wide, the seat is similar but slightly bigger, than the Business Class seats fitted on the Airline’s Boeing 777-300ER fleet. Business Class on the A380 also features a Passenger Corner, specially created for these customers to pick up snacks and socialise during long flights. †¢AIRLINES KRISWORLD Customers can choose from more than 1000 entertainment options featured on the new KrisWorld, including movies, television programmes, music, learning applications and 3D games. Screens across all classes are bigger: 58cm in Suites, 39cm in Business and 30cm in Economy. Singapore Airlines customers flying on the A380 and B777-300ER, are also able to work. Inflight through a comprehensive suite of office applications which can be accessed via the handset and without a laptop. All seats come with their very own USB port and in-seat power supply. †¢INTERLINE E-TICKETING Singapore Airlines ranks as the first non-US carrier, and third in the airline industry, in implementing interline e-ticketing. As of March 2008, 97% of all tickets issued from the Airline’s sales channels were e-tickets. All Singapore Airlines’ stations in the network are e-ticket enabled. According to IATA ranking in March 2008, Singapore Airlines has 120 Interline e-ticketing partners, among the highest in the industry. Corporate Social ResponsibilityRaising money for charities †¢Over $1. 9 million was raised and distributed to charities in Sydney, Singapore and the global humanitarian organisation, Medecins Sans Frontieres. Singapore Airlines announces it will auction seats in the world’s first A380 flight on the global online marketplace, eBay. All money raised from the auction is to be donated to four charities. The auction starts on 27 August 2007 and runs for two weeks. Environment†¢The A380 is a cleaner, greener, new generation aircraft – fuel burn, compared to a Boeing 747, on a per-seat basis is 20% less, and its noise footprint at take-off and landing is about 95% lower than any aircraft introduced 40 years ago. It is the cleanest, most environmentally friendly large passenger plane to take to the skies. Importantly, it will also help to deal with congestion at busy airports by offering more seats without the need for more frequencies. And it is delivering a substantially lower fuel burn per seat mile than the older generation large passenger jets. Image and reputationAwards and Accolades September 2008 Business Traveller Asia-Pacific â€Å"Best Airline† for the 17th consecutive time in its 2008 Readers' Poll. †¢Best Asia-Pacific Airline, Best First Class Best Business Class and Best Economy Class. With ten editions worldwide, Business Traveller is the world's leading publication geared towards frequent business traveller s. †¢World's Best Awards 2008 survey â€Å"Best International Airline† for the 13th consecutive time in its. The magazine has a readership of almost five million. February 2008 †¢Air Transport World (Global) Airline of the Year March 2008 †¢Frost & Sullivan Asia Pacific Aerospace & Defence Awards (Asia) Airline of the Year Business Process Process efficiency Solutions to improve business efficiency †¢Introduction of A380 to cater to high demand from customers and also attempted to cut costs that was passed on from high oil prices since the use of bigger airplanes will be more cost efficient as opposed to flying smaller airplanes with more frequency. In addition, five new Boeing 777-300ER aircraft were delivered. These raised the number of Boeing 777 aircraft in the operating fleet to 72, reaffirming Singapore Airlines’ position as the world’s largest operator of the Boeing 777 family. The four-time weekly service via Moscow started in March 2008, boosting the number of weekly passenger flights between Singapore and the USA to more than 50. Frequency was increased between Singapore and cities in Asia and Europe to meet growing demand for air travel. This shows that they continually increase their frequency to meet demands and improve services towards customers. Employee EfficiencyValu e added per employee†¢There is an improvement from $497,662 to $530,859 which is an increment of 6. 7% over the last financial year. Appendix 21 Table 12 Comparison with Close Competitors SIACathay PacificQantas Learning & GrowthAir Crew training -4 month long training for stewardesses which includes both functional and interpersonal skills -Promote team dynamics by organizing aircrews in teams of 13 and flies together for at least 2 years Self Learning – Web-based self-learning security program for its cabin and technical crew to increase efficiency in learning Air Crew training – Staff alignment survey to ensure better employees’ expectations. – Leading-edge training and development programmes to enhance the skills of our workforce. -Business-driven learning Confidential counselling through our Employee Assistance Programme. Air Crew training – Comprehensive training program that covers topics including customer service, medical aviation, aircraft and personal safety, emergency procedures. – QGFT provides high level practical and theoretical training in dedicated facilities. Internal Business Processes-Cost cutting solutions to improve business efficiency through introduction of Airbus 380 which offers the state of the art aircraft and that it also cuts back on fuel costs. – Diversity of businesses by tapping into budget airline Tiger Airways. Average fleet age of 6. 41 years-Cost cutting solutions to improve business efficiency by publicly announcing plans to replace a few older aircraft with new fuel-efficient plans and retrenching employees. -Average fleet age of 11 years. -Cost cutting solutions to improve business efficiency through introduction of Airbus 380 which offers the state of the art aircraft and that it cuts back on fuel costs. -Overly focused on cost cutting such that safety is being compromised, and they are currently under supervision by CASA -Average flight age of 9. 3 years Diversity of businesses by tapping into budget airline and currently holds stakes in Jetstar. Customer Perspective- Close relationship and builds loyalty through branding. – Excellent in flight ente rtainment on board that is crucial for longer flights. – Low safety concern: Introduced a web-based self-learning security program for cabin and technical aircrew and has completed its second renewal of the IATA Operational Safety Audit. The Airline is also working closely with other safety organisations, such as IATA and AAPA, to promote and enhance flight safety. Build and maintain a good social image and reputation- Excellent in flight services on board with brand new state-of-the-art in-flight entertainment system with audio and video on demand for the business class. – Low safety concerns and they emphasized that safety is of utmost importance: established the Board Safety Review Committee and Airline Safety Review Committee – Safety problems have been an issue recently with numerous cases of technical problems and causing flight delays. The Civil Aviation Safety Authority (CASA) told Qantas to improve the maintenance of its planes, after several flights ha d been cancelled or delayed due to engine problems. † – Social image declining due to adverse news reports about concerns over safety levels. Appendix 22 Article 6 Singapore world's best airline STUART INNES 20 September 2008 SINGAPORE Airlines, the first to have daily international flights through Adelaide Airport, has been named best airline by Business Traveller Asia-Pacific magazine The readers' votes also gave the airline wins in categories for best first class, best business class and best economy class. The gongs come on top of other awards to Singapore Airlines such as the annual Skytrax survey, which voted it airline of the year. US-based magazine Travel + Leisure readers voted Singapore Airlines as best international airline in its 2008 World's Best Awards. 9References Books Loizos Heracleous, Jochen Wirtz & Nitin Pangarkar (2006) Flying High in a competitive industry: Cost-effective service excellence at Singapore Airlines McGraw-Hill Educatiion (Asia) Databases Factiva http://global. factiva. com. ezlibproxy1. ntu. edu. sg/sb/default. aspx? NAPC=S&fcpil=en Journal Articles Shank, K. J. and Govindarajan, V. (1992). Strategic Cost Management and the Value Chain. Journal of Cost Management, Winter 1992, 5(4):5-21 Chivaka, R. (2007). Strategic Cost Management: Value Chain Analysis Approach. Accounting SA, August 2007, 25-27. Porter, M. E. (1985). Competitive Advantage. The Free Press, New York, Ch. 1, pp 11-15. Newspaper Reports The Straits Times, October 19 2008, Money Section, SIA sees 1. 6% drop in flier numbers Other Reports Singapore Airlines Ltd Financial Report 2007-08 Singapore Airlines Ltd Financial Report 2006-07 Singapore Airlines Ltd Financial Report 2005-06 Singapore Airlines Ltd Financial Report 2004-05 Cathay Pacific Financial Report 2007-2008 Qantas Airways Financial Report 2007-2008 Websites www. cathaypacific. com www. qantas. com. au www. reuters. com www. singaporeair. com http://business. timesonline. co. uk/tol/business/industry_sectors/banking_and_finance/article4909976. ece http://www. straitstimes. com/Breaking%2BNews/Money/Story/STIStory_288507. html www. venturerepublic. com/resources/Singapore_Airlines_ ¬_An_Excellent_Asian_Brand. asp www. singaporeairfreight. com/ttd_bizenterprise/Singlenews. aspx? DirID=64&re

Evaluate the usefulness of David Eastons model of the political system Essay - 1

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