Financial Analysis of Singapore Airlines Inc.

Table of Contents:

S.NO.              Particulars

  1. Executive Summary
  2. Introduction
  3. Horizontal Analysis
  4. Vertical Analysis
  5. Economic Affairs
  6. Ratio Analysis
  7. Dividend Ratio
  8. Sustainable & Liquidity Ratio
  9. Market Trend
  10. Non-Financial Aspects
  11. News & Comments
  12. Conclusion
  13. Bibliography

Executive Summary:

Singapore Airlines is a Singapore based airlines company which is now operating in 32 countries with 62 destination worldwide. A company with special features within cabins, business class and royal services from the “Singapore Girls” has been emerged as the second largest airlines in the world by market capitalization, worth US $14 billion. Company has tremendous increase in their operating business and their workforce. This has built their organization to serve millions of customers during the year.

The company has good corporate governance which leads the company to perform well during each year and engage in R&D in terms of new technologies and launching new features in each segments of their operations.

Customer feedback and their honest operation has rank them amongst the top 15 carriers worldwide in terms of revenue passenger kilometers and is ranked 10th in the world for interational passengers carried.


Singapore Airlines is operated and managed by the Singapore government, which also holds 56% of the voting stock. The company has its hub at Singapore Changi Airport. Company has reported $14868.5m as revenue from its major operation during the year 2016-17.

As Group includes many airlines related subsidiaries like repair and overhaul the company has been able to operate its business across the globe. Singapore airlines has modern passenger fleet and operating more than 100 aircraft in today scenario. The Group comprises of 25 subsidiaries, 32 associates and two joint ventures at the year 2016-17. Singapore airlines has some wholly owned subsidiary like Scoot, Tiger Airways Silk Air and SIA cargo, which comprises of more than 180 aircrafts. Further, if we comprise all these subsidiaries operation then it has been analyzed that the company has its operation network in 35 countries at 131 destinations. It has been reported that during the year 2016/17 the four Singapore based airlines has carried more than 31 million passengers.

Though Singapore airlines is operating with 25,000 staff but the charm of the staff crew is the “Singapore girl” which is also known an iconic symbol of quality customer care and service in the Singapore airlines. She is the one who epitomizes Singapore airlines’ traditional of friendly service and Asian hospitality.

As the company operates at a large scale it has to face a bunch of competitors to achieve its objectives. Delta Air Lines Inc. is one of the toughest competitor among those bunches. Delta Air Lines reported Market capital of USD 38,229, against which the SIA reported only 9,223. Delta Air operates over 5400 flights daily which have over 319 destinations in 54 countries on six continents.

Horizontal Analysis

Particulars31-3-201731-3-2016 Increase or (Decrease)31-3-2015 Increase or (Decrease)31-3-2014 Increase or (Decrease)31-3-2013 Increase or (Decrease)
$ m$ mAmountPercent$ mAmountPercent$ mAmountPercent$ mAmountPercent
Equity attributable to owners of the parent
Share capital1856.101856.100.000.001856.100.000.001856.100.000.001856.100.000.00
Treasury shares-194.70-381.50186.80-48.96-326.30-55.2016.92-262.20-64.1024.45-269.807.60-2.82
Other reserves11421.6011280.10141.501.2510933.80346.303.1711643.30-709.50-6.0911503.20140.101.22
Non-controlling interests387.20378.209.002.38466.50-88.30-18.93337.40129.1038.26312.6024.807.93
Total Equity13470.2013132.90337.302.5712930.10202.801.5713574.60-644.50-4.7513402.10172.501.29
Deferred accounts234.50225.309.204.08141.7083.6059.00226.40-84.70-37.41146.7079.7054.33
Deferred taxation1890.501681.70208.8012.421599.6082.105.131788.90-189.30-10.581948.20-159.30-8.18
long term liabilities1794.701283.40511.3039.841521.20-237.80-15.63904.30616.9068.22944.50-40.20-4.26
Defined benefit plans131.20129.301.901.47129.70-0.40-0.31169.60-39.90-23.53163.705.903.60
Current Liabilities6288.606440.00-151.40-2.356640.40-200.40-3.025391.401249.0023.175401.60-10.20-0.19
Property, Plant and equipments
Aircraft, spares and spare engines16433.3010510.705922.6056.359957.50553.205.5610100.80-143.30-1.4210875.60-774.80-7.12
Total PPE16433.3014143.502289.8016.1913523.20620.304.5910327.703195.5030.9413098.00-2770.30-21.15
Intangible assets423.50515.80-92.30-17.89497.6018.203.66223.40274.20122.74218.504.902.24
Subsidiary companies0.
Associated companies1056.90901.90155.0017.19922.20-20.30-2.20729.40192.8026.43554.40175.0031.57
joint venture companies160.20156.303.902.50167.90-11.60-6.91126.5041.4032.73120.805.704.72
Long term investments405.70773.10-367.40-47.52927.60-154.50-16.661125.20-197.60-17.56706.90418.3059.17
Other long-term assets479.30496.80-17.50-3.52573.80-77.00-13.4292.20481.60522.34213.90-121.70-56.90
Deferred accounts61.106.0055.10918.3356.40-50.40-89.368.4048.00571.4316.10-7.70-47.83
Current Assets5700.006776.30-1076.30-15.887252.90-476.60-6.577310.70-57.80-0.797499.50-188.80-2.52
Total Assets24720.0023769.7023921.6019943.5022428.10
31-3-201731-3-2016 Increase or (Decrease)31-3-2015 Increase or (Decrease)31-3-2014 Increase or (Decrease)31-3-2013 Increase or (Decrease)
Net Sales14,86915,239-370-2.4315,566-327-215,243323215,0981450.96
Cost of sales8,3778,958-581-6.499,400-442-59,839-439-49,750890.91
Gross profit6,4926,2712213.526,16610525,405761145,348571.07
Operating expenses:
Sales, General and admin96395580.841,352-397-2976558777724415.66
Other operating expense4,9064,6342725.874,40423054,3812314,395-14-0.32
Total operating expense5,8695,5892805.015,756-167-35,146610125,119270.53
Operating income623682-59-8.6541027266259151582293013.1
Interest expense, net4549-4-8.1650-1-2050043-43-100
Other income, (exp.)-59340-399-117.3583257310109-26-24296-187-63.2
Income before income taxes519972-453-46.604435291193687520482-114-23.7
Income tax expense77121-44-36.363685236-5793-16340-97-243
Income from continued operations442851-409-48.06407444109425-18-4442-17-3.85
Net income36080436843611836082379-19-5.01
Earning per share
Vertical Analysis:




$ m$ m$ m$ m$ m
Equity attributable to owners of the parent
Share capital1856.101856.101856.101856.101856.10
Treasury shares-194.70-381.50-326.30-262.20-269.80
Other reserves11421.6011280.1010933.8011643.3011503.20
Non-controlling interests387.20378.20466.50337.40312.60
Total Equity13470.2013132.9012930.1013574.6013402.10
Deferred accounts234.50225.30141.70226.40146.70
Deferred taxation1890.501681.701599.601788.901948.20
long term liabilities1794.701283.401521.20904.30944.50
Defined benefit plans131.20129.30129.70169.60163.70
Current Liabilities6288.606440.006640.405391.405401.60
Total Equity54.4955.2554.0559.9559.76
long term liabilities7.265.406.363.994.21
Defined benefit plans0.530.540.540.750.73
Current Liabilities25.4427.0927.7623.8124.08
Property, Plant and equipments
Aircraft, spares and spare engines16433.3010510.709957.5010100.8010875.60
Total PPE16433.3014143.5013523.2010327.7013098.00
Intangible assets423.50515.80497.60223.40218.50
Subsidiary companies0.
Associated companies1056.90901.90922.20729.40554.40
joint venture companies160.20156.30167.90126.50120.80
Long term investments405.70773.10927.601125.20706.90
Other long-term assets479.30496.80573.8092.20213.90
Deferred accounts61.106.00568.416.1
Current Assets5700.006776.307252.907310.707499.50
Total Assets24720.0023769.7023921.6019943.5022428.10
Total PPE66.4859.5056.5351.7858.40
Intangible assets1.712.
Long term investments1.643.253.885.643.15
Other long-term assets1.942.092.400.460.95
Current Assets23.0628.5130.3236.6633.44
Net Sales14,86915,23915,56615,24315,098
Cost of sales8,3778,9589,4009,8399,750
Gross profit6,4926,2716,1665,4055,348
Operating expenses:
Sales, General and admin9639551,352765724
Other operating expense4,9064,6344,4044,3814,395
Total operating expense5,8695,5895,7565,1465,119
Operating income623682410259229
Interest expense, net454950043
Other income, (exp.)-5934083109296
Income before income taxes519972443368482
Income tax expense7712136-5740
Income from continued operations442851407425442
Net income360804368360379
Earning per share
Cost of sales56.3458.7860.3964.5564.58
Gross profit43.6641.1539.6135.4635.42
Sales, General and admin6.486.278.695.024.80
Other operating expense32.9930.4128.2928.7429.11
Total operating expense39.4736.6836.9833.7633.91
Operating income4.194.482.631.701.52
Interest expense, net0.300.320.320.000.28
Other income, (exp.)-0.402.230.530.721.96
Income tax expense0.520.790.23-0.370.26
Net income2.425.282.362.362.51

As vertical and horizontal analysis has been shown above for last five years, it has been observed that company has not been able to generate the revenue since last 3 years but still have a positive impact in profits in 2015. Similar analysis has been done with other operations of the like assets and liabilities, where it has been monitored that during last five years the company has been able to increase the equity for the company, which in comparing to the assets is quite high for the company. So, the debt equity        ratio has also been recorded at a lower side, from the above analysis.

Trend Analysis:

Total Assets24,72023,77023,92219,94422,428


Industry Analysis

As compared with the industry the Profit and Sales are lower than the Delta Airlines, so Singapore Airlines should benchmark the result with the industry growth rate.

Economic Affairs:

In terms of economic condition is concern then it has been studied by the Oxford Economics that Singaporean aviation’s has a huge economic benefits in terms of three aspects:

  1. Contribution to Singaporean GDP:
  2. During the years it has been monitored that aviation sector has contributed S$14.2billion (5.4%) to the Singaporeans GDP.
  3. There has been a huge increment in the employment to the local people. It has been recorded that 119,000 jobs has been predicted from aviation sector.
  • Increase in contribution to public finance has been increased to S$1.5 billion in term of tax
  1. Increase in Aerospace manufacturing benefits by generating S$2.6billion.
  2. Increase in the consumer satisfaction and benefited more than 37 million passengers and generated excess income worth S$24.9billion a year.
  3. Enabling a long term economic growth in terms of increasing exports and increasing more opportunity in the foreign markets by supplying the goods across the world.

Ratio Analysis:

Ratio Analysis has been performed in comparing with the competitor, Delta Airlines Inc.

Singapore Airlines Limited
Ratio Analysis of Financial Statements
1Gross Profit RatioGross profit/Net sales*10043.6641.1539.6135.4635.42
2Net Profit RatioOperating profit/Net sales*1002.425.282.362.362.51
3Return on assetsNet Income/Total Assets*1001.463.381.541.811.69
4Return on equityNet Income/Shareholders Equity0.
S.No.Delta Airlines Inc.31-3-201731-3-201631-3-201531-3-201431-3-2013
1Gross Margin59.7958.0043.144.540.94
2Net Margin11.0311.121.6327.92.75
3Return on Assets8.388.441.2421.782.29
4Return on equity37.846.046.442221.610

As shown in the Table and the chart, in comparing to the industry, the GP of the Singapore Airlines seems lower, it might be because the cost of goods sold in the industry varies from 40-60%, whereas in Singapore Airlines the same ratio has been increased to 60-80%. Further the ratio of revenue is also quite than Singapore Airlines.

Net Profit analysis shows the profit after taxes and all other operating expenses. So, the higher the Net profit the higher will be the EPS and higher will be the market price. So, as in comparing to the industry the Net profit also seems quite low in various of the years. Though it has improved in 2015, but in 2016 and 2017 it still shows poor performance.

Return on Assets shows the potential of the company to generate profit in percentage to the total assets. So, in comparing to the industry the same ratio also seems quite low. So, accumulating all the years, Singapore Airlines should improve their performance in order to re-generate the profit in ratio to the assets.

Dividend Ratios

Dividend Ratio’s has been analyzed with comparing with the Delta Airlines Inc.

Singapore Airlines

Dividend Yield Ratio02.311.422.550
Dividend Payout Ratio71.95153.180.119.1
PE Ratio33.2316.6238.334.4434.08
Earning per share0.30.690.310.30.32

Delta Airlines Inc.

Dividend Yield Ratio1.370.890.610.440
Dividend Payout Ratio9.811.42.42.50
PE Ratio8.488.9963.882.249.97
Earning per share5.795.630.7812.291.19

Dividend yield ratio indicates the dividend paid per market price, so as shown in the chart, the Dividend yield of Singapore Airlines is higher in comparing to the industry, as it might be the case where the price of the share is lower and the dividend paid is higher.

Dividend Payout ratio indicates that how much the company pays profit to the shareholders, so as shown in the chart the Dividend payout ratio of Singapore Airlines is more than the Delta Airlines Inc. which means that the company believes in higher return to their shareholders in comparing to the competitors.

PE Ratio is the ratio of MPS per EPS, so it means the sum one is ready to pay for each rupee worth of the earning of the company. So, it the major tools for indicating the progress of the company and the shareholders. As PE ratio of Singapore airlines is higher than the Delta Airlines in most of the years, so it seems favourable condition for the company’s shareholders growth.

Earning per share is the most imaginary tool to identify the return that the shareholder will get from the company profit. So, higher the EPS the higher the return can be expected. So, as the company Singapore Airlines has lower EPS in comparing to the industry, so the operating profit should be at the increased in order to build the shareholders interest.

Stability and Liquidity Ratio

Stability and Liquidity Ratio has been analyzed with the Delta Airlines Inc. performance:

Debt to Equity Ratio0.680.660.720.520.52
Interest Coverage Ratio12.5220.89.93012.29
Current Ratio0.490.520.740.680.62
Quick Ratio0.350.320.390.380.38
Debt to Equity Ratio0.60.771.10.97-5.96
Interest Coverage Ratio17.9216.223.393.992.68
Current Ratio0.490.520.540.680.62
Quick Ratio0.430.480.490.610.55

Efficiency Ratio:

Efficiency Ratio has been analyzed with reference with Delta Airlines Inc. for last five years:

Efficiency ratio31-3-201731-3-201631-3-201531-3-201431-3-2013
Asset Turnover Ratio1.
Debtor Turnover Ratio7.707.517.357.517.58
Stock Turnover Ratio45.9546.841.5535.5633.74
Cash Cycle9.310.913.813.413.9
Asset Turnover Ratio0.760.760.760.780.83
Debtor Turnover ratio19.220.1517.5723.4821.66
Stock Turnover Ratio20.0822.0723.9920.127.8
Cash Cycle-20-26-7-5-5

Market Price/Trend

Last five year market price has been observed and has been reported here under:

Return on Investment3.452.315.562.612.25
Asset value per share11.0710.9610.6611.2611.14
Current Market price10.1711.5111.9510.3910.87

As shown in the chart and the table it has been observed that the market price of the company has a variance to the market. From 2012-13 to 2016, it has been an increasing trend but it has a sudden downfall in 2017. So, this might be the situation when the investor are looking for more high profitable project from the company and some handsome dividend payout ratio, which will attract the market and the share price.

Return on investment of the company has also been reviewed at an increasing trend, in 2013-15, but somehow it has down fall in 2015 and 2016. So, the return on investment has to be improved as it is the return per invested capital by the shareholders. This will also be reasonable to increase the share price of the company.

Asset value per share is used by the shareholder to compare the price of the company’s stock to the underlying value of the company’s stock. So, it needs to be strong position.

Further analysis of other non-financial things are here under:



KPI’s of the company has been taken into accounts with regards to Return on shareholders fund, Operating profit margin and passenger load factors.


Strength: Young and highly fuel efficient fleet

Weakness: Location drawback

Opportunity: Growth in India and other countries

Threats: There is a high fluctuation in Aviation turbine fuel prices.

Market price

As stated above the company market price is being fluctuated in last five years.


Company has received “Eisenhower Global Innovation Award” from the Business council for international understanding, so this shows how much company being innovative to its operations.

Management capability

Management has capability to achieve any objective and goals framed by the company. Further issues like cyber security, crisis response plan, stakeholders compliant resolution, risk mitigation and assurance reporting are some of the areas where management found more effective.

Employee relations

Company has been found in good and healthy relation with the employees along with the corporate bodies and industry. Employees are treated as being human, so as the company provide good office and personal life balance.

CSR activities

Harapan Rainforest initiative, elephant conservation, Training to employees, SEP training are some of the areas where the company has been found engage in CSR activities.

Sustainability activities

Singapore Airlines is an active member of sustainable aviation fuel users group and they work to accelerate the development and commercialization of sustainable aviation fuel and adopt sustainably produced aviation biofuels, without degrading or minimal impact on biodiversity and provide a positive socioeconomic impact.

Service quality

 Company has been able to maintain its high standards of product and service quality in each regions they operate, along with their subsidiary workings.


Staff turnover

During the year 31 March, 2017 company has increase the staff strength to 14,800 i.e. an increase of 754 over last year.

Patents and trademarks

The patents and trademarks of the company has been assumed to be amortized in 23-24 years.

Supply chain

SIA cargo has been rewarded with the “Best Air Cargo carrier in Asia” at the 206 Asian Freight, Logistics and supply chain awards.

R&D activities

Company has been engaged in daily R&D activities, so to improve the quality of service and operation with decrease in ticket fares.


SIA and Silk Air to be rolled out new airfare pricing (The Straits Times, 2017). In the recent news section it has been traced that Singapore airlines and silk air will start charging advance seat selection charges from the Economy class passengers.

Singapore Airlines plane caught fire while emergency landing (The guardian, 2016). A plane carrying 241 people caught fire as it has emergency landing, this make the passenger fear and also challenge the company reputation on building high quality maintenance.

Company subsidiary has offered to introduce biz class offer to the Fullerton Hotel. (Zeenews, 2017)This will benefit to extend the groups network by seeding and developing new landmarks and new destinations in the region of Asia-pacific.

Singapore Airlines launches many new departure during this year and Auckland is one of them. (breaking travel, 2017). This will lift the 165000 seats annually between two cities.


From the various criticism has been recorded against the company. Steran criticized that the company has been poor in providing meals and beverages, customer service is poor and there is no flight entertainments.

In the social media there are lots of such news against the company. Once it was found that netizens on social news site reddit claim luggage was not over weight but still airliines messed up with ther. (, 2017)

Corporate Governance:

In the corporate governance section company has been able to implement various committee and able to redress to the customer redressals. Some of the committee formed by the company are: Board Executive committee who will be function for buy back of the committee as well, Board Audit Committee, who will be responsible for conducting the audit of the company, Board Safety and Risk Committee, which will work in reviewing key risk and controls which are put by the management, Board Nomination committee which will nominate the KMP of the company; Board compensation and industrial realtions committee to maintain a foreign relation and company has worked with various other plans so required in the short and long terms for the company growth.


As per recent report, there are 9 directors in the company, which are also the board of directors. Peter Seah Lim Huat is the Chairman of the company responsible to conduct and resolve the meetings.Goh Choon Phong is the CEO of the company, responsible to manages Scroot and Tigerair and other operations of the company. All the 9 directors are termed as non-executive/Independent director of the company and holds their chair to perform and plan the company’s long term and short term objectives. The business is being conducted with the working operation of the Board of these directors.

Vision and strategic financial goals:


Company vision to provide air transportation services of the highest quality and maximizing returns for the benefit of shareholders and employees.

Company has an strategic alignment, not financial returns, which guide them for investment decisions. So, they work on what investment strategy should be adopted to benefit their customers, like, they invest $700,000 to build a facility that enables chefs to taste food under pressurized flight conditions.


After analyzing the facts and figures of the company it has been observed that the company has increment net profit margin in each year and a trend of increasing employee and opportunity in the business. So, building the potential to run the company in future the company has been poor in some financial aspects in comparing to the industry, so if those sectors, as mentioned above were traced out, then with the new innovation techniques and the management goals the company will perform so well in future not only interm of company financial returns, but also in terms of corporate relations, customer satisfactions and also will help to increase the market share.

So, it can be concluded that the ratios of the company should be the area to work upon to make it a comparable site in the industry and should bench mark the progress of industry and competitors in order to perform well in future.


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  14. India.Com, (2017), “Silk Air introduces biz class offer”, Available from:
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  17. com, (2017), “Return to profit of Singapore Airlines Limited”, Available from:

Happy Reading!!

Published by

Shushant mallik ( Chartered Accountant & Cost Accountant )

Shushant is a Chartered Accountant and a Cost Accountant. He has secured All India Rank-34 in CMA Final Exams. He is a Financial Controller at Mount Meru Soyco Limited, Rwanda. He is a administrator of this site . In his spare time he hang out with his friends and discuss about the current issues in market. You can find his latest blog posts at and at his facebook profile.

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