1. Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Depreciation at Delta Air Lines and Singapore Airlines
UAA – ACCT Seminar in Executive Uses of Accounting Dr. Fred Barbee
Dr. Fred Barbee

2. Financial Reporting

3. Yeah!
MBA

5. Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Why study this case?
To “compare and contrast” depreciation assumptions from two airlines that . . .
Are in some ways alike, and
In other ways vastly different
We are not really concerned with how they depreciate – both airlines use straight-line depreciation.
We are also not concerned with how they depreciate for tax purposes – only financial accounting.
Dr. Fred Barbee

6. Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Why Look at an Airline?
PP&E for airlines usually comprise greater than 50% of total assets.
Aircraft of one airline are substantially similar to aircraft of another airline (at least to the lay person).
Dr. Fred Barbee

7. Depreciation – The Concept1

8. Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
The
Accounting
System
Recognition
Revenue
Principle
Matching
Dr. Fred Barbee

9. Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Time
Consumed as Depreciation Expense
Dr. Fred Barbee

10. Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Depreciation is not an attempt to establish the value of an asset.
Depreciation is not a measure of the decline in value of an asset.
Dr. Fred Barbee

11. Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Depreciation Defined
The process of allocating the cost of property, plant, and equipment as an expense in a systematic and rational manner to those periods expected to benefit from the use of the asset.
Plant assets are measured and recorded at cost, and that cost is allocated to the periods benefiting from the use of the assets on the basis of several estimates concerning their use.
Dr. Fred Barbee

12. Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Depreciation
BEGINNING
ENDING 96 97 98 99 00 01 02 03 04 05
Life of the Asset
Depreciation is a process of allocation, not valuation.
Dr. Fred Barbee

13. Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Depreciation
Balance Sheet
Income Statement
Cost
Acquisition Cost
Expense
Allocation
Unused
Used
An application of the matching principle.
Dr. Fred Barbee

14. Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Depreciation
Income Statement
Depreciation Expense
Depreciation for the current year
Balance Sheet
Accumulated Depreciation
Total depreciation to date of balance sheet
Dr. Fred Barbee

15. Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Long-Term Assets
Dr. Fred Barbee

16. Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Long-Term Assets
Have a useful life of more than one year.
Are acquired for use in the business.
Are not intended for resale to customers.
Are reported at carrying (book) value.
Dr. Fred Barbee

17. Management Issues related to Accounting for Long Term Assets
Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Management Issues related to Accounting for Long Term Assets
Dr. Fred Barbee

18. Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Management Issues
The cost of the asset must be measured.
The depreciable life of the asset must be estimated.
Dr. Fred Barbee

19. Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Management Issues
The salvage value of the asset at the end of its life must be estimated
A pattern for recognizing depreciation over the depreciable life of the asset must be selected.
Dr. Fred Barbee

20. Issues Related to Long-Lived Assets
Depreciation at Delta Air Lines and Singapore Airlines
Issues Related to Long-Lived Assets
April 19, 2017
Asset Service Potential
Use in business operations
Acquisition
Disposal
Decline in future service benefits.
Book Value
Time
Accounting Issues
Measuring Cost
Allocation of cost
Accounting For post acquisition expenses.
Recording Disposals
Dr. Fred Barbee

21. Issues Related to Long-Lived Assets
Depreciation at Delta Air Lines and Singapore Airlines
Issues Related to Long-Lived Assets
April 19, 2017
Asset Service Potential
Use in business operations
Acquisition
Disposal
Gain or
Loss
Cost
Principle
Decline in future service benefits.
Matching
Principle
Book Value
Time
Accounting Issues
Measuring Cost
Allocation of cost
Accounting For post acquisition expenses.
Recording Disposals
Dr. Fred Barbee

22. Acquisition cost of Property, Plant, and Equipment
Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Acquisition cost of Property, Plant, and Equipment
Fundamental Issue #1: What is the value of the asset?
Dr. Fred Barbee

23. Measuring the Carrying Amount of Long-Lived Assets1

24. Expected Benefit Approach
Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Expected Benefit Approach
Recognizes that assets are valuable because of the future cash inflows they are expected to generate.
Dr. Fred Barbee

25. Economic Sacrifices Approach
Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Economic Sacrifices Approach
Focuses on the amount of resource expenditures required to acquire an asset.
Dr. Fred Barbee

26. Measuring the Carrying Value of Long-Lived Assets
Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Measuring the Carrying Value of Long-Lived Assets
Expected Benefit Approaches
Discounted present value.
Net realizable value.
Economic Sacrifice Approaches
Historical cost less accumulated depreciation.
Replacement cost.
Dr. Fred Barbee

27. 1

28. Hypothetical Case – A Truck
Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Hypothetical Case – A Truck
Original cost $100,000
Two years old, has remaining useful life of 8 years
No salvage value
Depreciated using straight-line
Dr. Fred Barbee

29. 1

30. Discounted Present Value
Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Discounted Present Value
Expected net operating cash inflows = $18,000 per year (assumed) for eight remaining years, discounted at a 10% (assumed) rate.
x $18,000 = $96,029
Dr. Fred Barbee

31. Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Net Realizable Value
Current resale price from an over-the-road equipment listing (Purple Book) for the specific vehicle model.
$85,000 (Assumed)
Dr. Fred Barbee

32. 1

33. Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Historical Cost
Historical Cost less Accumulated Depreciation
$100,000 – [(100,000/10 years) x 2 years] = $80,000
Dr. Fred Barbee

34. Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Replacement Cost
Replacement cost of a two-year-old vehicle in equivalent condition
$90,000 (assumed)
Dr. Fred Barbee

35. Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Possibilities
Discounted PV Approach
$96,029
Net Realizable Value
85,000
Historical Cost (Less A/D)
80,000
Replacement Cost
90,000
Dr. Fred Barbee

36. Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Possibilities
Discounted PV Approach
$96,029
Net Realizable Value
85,000
Historical Cost (Less A/D)
80,000
Replacement Cost
90,000
Dr. Fred Barbee

37. Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
“Value” of Asset
“Cost” includes all reasonable and necessary expenditures incurred in:
Acquiring an operational asset;
Placing it in its operational setting; and
Preparing it for use;
Less any cash discounts allowed.
Dr. Fred Barbee

38. Acquisition cost of Property, Plant, and Equipment
Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Acquisition cost of Property, Plant, and Equipment
Fundamental Issue #2: Allocating the Cost of an Asset?
Dr. Fred Barbee

39. Theoretical Justification
Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Theoretical Justification
The matching principle requires the cost of an asset be charged to expense in the periods benefited.
The allocation process is called depreciation.
Dr. Fred Barbee

40. Revenue-Expense Association The Matching Principle
Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Revenue-Expense Association The Matching Principle
Three principles govern the inclusion of an expense in the matching process:
Association of cause and effect
Systematic and rational allocation
Association of Cause and Effect
Refers to the fact that some expenditures are directly associated with specific revenues and are included in determining net income for the period in which those revenues are received.
Examples: DM, DL
Dr. Fred Barbee

41. Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Manufacturing Costs
Balance Sheet
Unused DM
DM Inv.
Used
Used
Unfinished DL
WIP
WIP Inv.
Product Costs
Applied
MOH
Finished
FG Inv.
Sale
Sales -
COGS
Sold =
Income Statement
Gross Margin -
S&A
Period Costs =
Net Income
Dr. Fred Barbee

42. Revenue-Expense Association The Matching Principle
Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Revenue-Expense Association The Matching Principle
Three principles govern the inclusion of an expense in the matching process:
Association of cause and effect
Systematic and rational allocation
Immediate recognition
Association of Cause and Effect
Refers to the fact that some expenditures are directly associated with specific revenues and are included in determining net income for the period in which those revenues are received.
Examples: DM, DL
Dr. Fred Barbee

43. Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
The depreciable life of the asset must be established.
The salvage value of the asset at the end of its life must be estimated.
Dr. Fred Barbee

44. Factors in Computing Depreciation

45. Factors in Computing Depreciation
Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Factors in Computing Depreciation
The calculation of depreciation requires three amounts for each asset:
Cost
Useful life
Salvage value
Dr. Fred Barbee

46. Depreciation Methods Based on Time
Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Depreciation Methods Based on Time
Straight-Line
Accelerated
Sum-of-the-years’- digits
Declining Balance
Dr. Fred Barbee

47. Depreciation Methods Based on Activity Level
Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Depreciation Methods Based on Activity Level
Productive output
Service quantity
Dr. Fred Barbee

48. Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Depreciation
If an asset is expected to benefit all periods equally,
a straight-line method of depreciation would be appropriate.
As we indicated earlier, Accountants attempt to identify the measure of useful life that is most closely associated with the decline in the service potential of the asset to the firm.
Dr. Fred Barbee

49. Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Depreciation
If more benefits are expected early in the life of an asset . . .
an accelerated method of depreciation would be appropriate.
Accelerated methods sometimes referred to as reducing-charge methods, are designed to recognize larger amounts of depreciation in the early years of an asset’s life and smaller amounts in the later years.
Dr. Fred Barbee

50. Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Depreciation
If benefits are related to the output of an asset . . .
the units-of-production method of depreciation would be appropriate.
Of course, regardless of the method of depreciation, over the life of the asset the total depreciation will be the same. The only difference will be in the timing of that depreciation.
Dr. Fred Barbee

51. Types of Accounting Changes

52. Types of Accounting Changes
Change in Accounting Principle
Change in Accounting Estimate
Change in Reporting Entity
Errors in Financial Statements

53. What Can Change? Estimated Life These are set at acquisition
Estimated Salvage Value
Pattern of Depreciation
These are set at acquisition
A change can be made if another method is preferable.

54. Methods of Depreciation
Straight-Line Method

55. Straight-Line Depreciation – The Rationale
Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Straight-Line Depreciation – The Rationale
Decline in service potential relates primarily to the passage of time.
Level of activity is important but use of asset is relatively constant.
Dr. Fred Barbee

56. Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Straight-Line Method
Known
Estimated
Cost - Salvage Value Useful life in years
Depreciation
Expense per Year =
Appropriate if an asset is expected to benefit all periods equally.
Estimated
Dr. Fred Barbee

57. Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Straight-Line Method
On December 31, 2001, equipment was purchased for $50,000 cash. The equipment has an estimated useful life of 5 years and an estimated salvage value of $5,000.
Depreciation Expense Per Year =
$50,000 - $5,000
5 Years
$9,000
Dr. Fred Barbee

58. Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Depreciation Schedule
Salvage Value
Straight-Line Method
Dr. Fred Barbee

59. Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Depreciation Expense is reported on the Income Statement.
Depreciation Expense
Book Value is reported on the Balance Sheet.
Dr. Fred Barbee

60. Methods of Depreciation
Declining-Balance

61. Accelerated Depreciation – The Rationale
Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Accelerated Depreciation – The Rationale
Superior Performance
Repair and Maintenance
Obsolescence
Obsolescence
The greater the potential for obsolescence, the greater the need for increased depreciation early in the asset’s life to reflect its rapidly expanding decline in service potential. This reduces the probability that a significant write-off will be required later in the asset’s life.
Dr. Fred Barbee

62. Accelerated Depreciation
Repair Costs
Depreciation

63. Double-Declining-Balance Method
Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Double-Declining-Balance Method
Step 1:
Straight-line depreciation rate =
100 %
Useful life in periods
Step 2:
Double-declining- balance rate
= 2 ×
Straight-line depreciation rate
Dr. Fred Barbee

64. Double-Declining-Balance Method
Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Double-Declining-Balance Method
A Constant Rate
Step 3:
Depreciation expense =
Double-declining- balance rate ×
Beginning period book value
A Declining Balance
Ignores salvage value.
Dr. Fred Barbee

65. Double-Declining-Balance Method
Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Double-Declining-Balance Method
On December 31, 2001, equipment was purchased for $50,000 cash.
The equipment has an estimated useful life of 5 years and an estimated residual value of $5,000.
Calculate the depreciation expense for and 2003
Dr. Fred Barbee

66. Double-Declining-Balance Method
Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Double-Declining-Balance Method
Step 1:
Straight-line depreciation rate =
100 %
5 years
= 20%
Step 2:
Double-declining- balance rate
= 2 × 20% = 40%
Step 3:
Depreciation expense
= 40% × $50,000 = $20,000 (2002)
Dr. Fred Barbee

67. Double-Declining-Balance Method
Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Double-Declining-Balance Method
2002 Depreciation:
40% × $50,000 = $20,000
2003 Depreciation:
40% × ($50,000 - $20,000) = $12,000
Dr. Fred Barbee

68. Double-Declining-Balance Method
Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Double-Declining-Balance Method
Below salvage value
($50,000 – $43,520) × 40% = $2,592
Dr. Fred Barbee

69. Double-Declining-Balance Method
Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Double-Declining-Balance Method
We usually have to force depreciation expense in the
latter years to an amount that brings BV to salvage value.
Dr. Fred Barbee

70. Comparing Depreciation Methods
Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Comparing Depreciation Methods
Life in Years
Annual Depreciation
Straight-Line
Life in Years
Annual Depreciation
Double-Declining-Balance
Dr. Fred Barbee

71. Reporting Depreciation
Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Reporting Depreciation
Net property, plant, and equipment is the undepreciated cost (book value) of the plant assets.
Book value  Market value
Dr. Fred Barbee

72. Selecting an Appropriate Depreciation Method
Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Selecting an Appropriate Depreciation Method
What are the factors that should be considered in selecting a depreciation method?
Dr. Fred Barbee

73. Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Depreciation at Delta Air Lines and Singapore Airlines
Now On to the case!!!
Dr. Fred Barbee

74. Delta
Singapore
Let’s Compare

75. Delta Air Lines

76. Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Delta Air Lines
Third largest U.S. airline in 1993
$12 billion in annual revenues (almost $15 billion in 1999)
Served 161 cities in 44 states
Operated flights to 33 foreign countries.
Dr. Fred Barbee

77. Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Delta Air Lines
Losing money
Average age of aircraft 8.8 years (9.6 in 2000)
Changed depreciation assumptions in 1993
Dr. Fred Barbee

78. Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Delta Air Lines
Average passenger trip length was 969 miles in 1993.
Capacity utilization 62.3%
Long term debt was $3,717
Dr. Fred Barbee

79. Singapore Airlines

80. Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Singapore Airlines
Largest private-sector employer in Singapore
Route network covered 70 cities in 40 countries
Total operating revenues in $5.1 billion (Singapore $)
Dr. Fred Barbee

81. Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Singapore Airlines
Average age of aircraft was 5.1 years
Profitable
Capacity utilization 71.3%
Average trip length 2,720 miles
No long-term debt
Dr. Fred Barbee

82. Let’s Compare Depreciation
Delta
Singapore
Let’s Compare Depreciation

83. Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Comparison . . .
Calculate the annual depreciation expense that Delta and Singapore would record for each $100 gross value of aircraft.
Dr. Fred Barbee

84. Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Delta Air Lines . . .
20-year depreciable life
Salvage value equal to 5% of cost
[100 x (1-.05)] / 20 = $4.75
Dr. Fred Barbee

85. Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Singapore Airlines . . .
10-year depreciable life
Salvage value equal to 20% of cost
[100 x (1-.20)] / 10 = $8.00
Dr. Fred Barbee

86. Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Life (in Years)
Salvage Value
Depr. Exp Per $100
Singapore Airlines
< 4/01/89 8
10%
$11.25
> 4/01/89 10
20%
8.00
Delta Air Lines
< 7/01/8610
$9.00
7/86 to 3/93 15
6.00
> 4/01/93 20 5%
4.75
Dr. Fred Barbee

87. Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Life (in Years)
Salvage Value
Depr. Exp Per $100
Singapore Airlines
< 4/01/89 8
10%
$11.25
> 4/01/89 10
20%
8.00
Delta Air Lines
< 7/01/8610
$9.00
7/86 to 3/93 15
6.00
> 4/01/93 20 5%
4.75
Dr. Fred Barbee

88. Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Comparison . . .
Are the differences in the ways the two airlines account for depreciation expense significant?
Why would companies depreciate aircraft using different depreciable lives and salvage?
Dr. Fred Barbee

89. Useful Life

90. Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Comparison . . .
Why would companies depreciate aircraft using different depreciable lives and salvage values?
What reasons could be given to support these differences?
Is different treatment proper?
Dr. Fred Barbee

91. Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Useful Life
Singapore Air
10 Years
Delta Air
20 Years
Dr. Fred Barbee

92. Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Useful Life - Factors
Technology
Singapore has newer aircraft
Aircraft Use
Frequent takeoffs and landings
Maintenance
Remember Valuejet?
Dr. Fred Barbee

93. Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Financial Considerations
Singapore Air
$1,600,000,000
For three year period
Delta Air
($1,200,000,000)
Dr. Fred Barbee

94. Can we quantify Delta’s more liberal depreciation policies?
Delta Air Lines
Can we quantify Delta’s more liberal depreciation policies?

95. Delta Air Lines
Assuming the average value of flight equipment that Delta had in 1993, how much of a difference do the depreciation assumptions it adopted on April 1, 1993 make?

96. Delta Air Lines
How much more or less will its annual depreciation expense be compared to what it would be were it using Singapore’s depreciation assumptions?

97. Look at Exhibit 2 1993 1992 Owned Aircraft $9,043 $8,354
Leased Aircraft
173
Gross Value of Aircraft
$9,216
$8,527
Average Gross Value
$8,872

98. Depreciation at Delta Air Lines and Singapore Airlines
April 19, 2017
Life (in Years)
Salvage Value
Depr. Exp Per $100
Singapore Airlines
< 4/01/89 8
10%
$11.25
> 4/01/89 10
20%
8.00
Delta Air Lines
< 7/01/8610
$9.00
7/86 to 3/93 15
19%
6.00
> 4/01/93 20 5%
4.75
Dr. Fred Barbee

99. Difference in Depreciation
Look at Current Policies
Average Gross Value
Delta Air
$8,872 x ( ) = $288
Singapore Air
Difference in Depreciation

100. Look at Previous Delta Policies
Delta’s Current Policy
Average Gross Value
$8,872 x ( ) = $111
Delta’s Previous Policy
Difference in Depreciation

101. Delta Vs. Singapore
There is yet another difference in the two airlines leading to a savings of Delta over Singapore on depreciation expense.
Historical cost basis; and
Age of the aircraft

102. Delta Vs. Singapore
Does the difference in the average age of Delta’s and Singapore’s aircraft fleets have any impact on the amount of depreciation expense they record?
If so, how much?

103. Look at the age of the aircraft
Delta
8.8
Singapore
5.1
Difference in age
3.7
Assume a 3% - 4% annual inflation in the mid to late 80s.

104. Additional Depreciation
Average Gross Value
$8,872
3.5% Inflation x 3.7 Years
12.95%
Increased Value
$1,150
Adjusted Gross Value
$10,022
Increased Value
Singapore’s Rate
$1,150 x .08 = $92
Additional Depreciation

105. Delta Vs. Singapore
Savings in depreciation expense due to more liberal assumptions
$288
Savings in depreciation due to older aircraft 92
Total savings Delta over Singapore
$380

106. Delta Vs. Singapore
Singapore Airlines maintains depreciation assumptions that are very different from Delta’s
What does it gain or lose by doing so?
How does this relate to the company’s overall strategy?
Compare Strategies

107. Singapore Airlines Renowned for customer service
State-of-the-art aircraft
Capacity utilization = 71.3%
1993 Annual Report: “A superior product will probably enable us to sustain relatively high load factors.

108. Singapore Airlines Long-haul Airline
Average passenger trip length in 1993 was 2,720 miles (Delta = 969)
Less wear and tear on aircraft – long trips are less stressful than frequent landings and takeoffs

109. Singapore Airlines Gain on sale of aircraft Average gain $134 million
Direct result of depreciation policies?
Result of corporate strategy
Depreciate fast resulting in low book values on disposal

110. Singapore Airlines Owned Vs. Leased Aircraft
Singapore operates none of their aircraft under operating leases
Delta operates close to 50% of their aircraft under non-cancelable operating leases.

111. Delta Air Lines Owned Vs. Leased Aircraft
Singapore operates none of their aircraft under operating leases
Delta operates close to 50% of their aircraft under non-cancelable operating leases.