SATS Business Strategy

We aim to be a premier global provider of airport ground handling and inflight catering services through the expansion of our operations.

Our growth strategy is to:

• Maintain our market position at Singapore Changi Airport

  An important component of our business strategy is to maintain our position as the leading provider of ground handling and inflight catering services at Singapore Changi Airport. To service the anticipated increase in passenger and air freight traffic, we have invested in new state-of-the-art ground handling and inflight catering facilities.

• Develop new joint ventures overseas

  We expect that the global trend towards consolidation in the ground handling and inflight catering industries will continue, following the trend towards consolidation and strategic alliances in the airline industry. We believe that in time, this will result in relatively few large international ground handling and inflight catering providers. To meet the growing challenge of global operators, we intend to continue expanding our joint ventures and acquisitions. This will enable us to provide high quality and seamless ground handling and inflight catering services to our airline clients over a greater number of destinations. We believe this strategy will enhance our future growth and further strengthen our relationships with our international airline clients.

• Acquire existing ground handling and inflight catering operations at key international airports

  We intend to make acquisitions that we feel will enhance our revenue growth, operations and profitability. We believe that as airlines increasingly focus on their core flight operations business, they will divest their ground handling and inflight catering subsidiaries. We intend to actively explore opportunities to acquire these businesses, if suitable, for our long-term growth plans.

• Acquire companies with related businesses that can provide synergy to our operations

  We intend to source, develop or acquire related businesses that we feel will complement our growth plans and enhance our earnings profile.

Competitve Strengths

In pursuing our growth strategies, we intend to leverage on our competitive strengths, which include:

• our position as the leading provider of ground handling, inflight catering and aviation security services at Singapore Changi Airport;
• our reputation for the high quality of our customer service;
• our strong and established ties with our airline clients;
• our expertise in successfully developing and managing ground handling and inflight catering joint ventures in other countries in the Asia-Pacific region; and
• our highly trained, motivated and experienced ground handling and inflight catering staff.

Though competition has increased in Singapore with the entry of a third ground handler, SATS continues to hold its ground and achieves growth in business volumes despite pressure on rates. Intense competition amongst airlines, coupled with rising fuel costs, will continue to place pressure on service providers such as ourselves, as airlines look to trim costs. Having weathered competition and challenges throughout our operating history, we have built a strong reputation in the industry and we remain committed to our role in maintaining Singapore's status as a amajor air hub. We aim to leverage on our competitive strengths to maintain our leadership position in Singapore and grow our business even further. Our focus in the coming years will continue to centre on overseas expansion as well as prudent cost management and productivity improvements, thereby enhancing our cost competitiveness.