Charging airport levy earlier means avoiding large spikes later

Charging airport levy earlier means avoiding large spikes later: Ng Chee Meng

Charging a levy for the development of Changi Airport Terminal 5 (T5) and Changi East projects before they are operational means passengers will avoid large spikes in fees later on, Second Minister for Transport Ng Chee Meng said in Parliament on Wednesday (Mar 7).

He reiterated the reasons for the implementation of an Airport Development Levy (ADL) of S$10.80 on all travellers flying out of Changi Airport from Jul 1, announced last week (Feb 28) by the Ministry of Transport (MOT) and Civil Aviation Authority of Singapore (CAAS).

Speaking at MOT’s Committee of Supply debate, Mr Ng said that the Government is funding the majority of the project, or more than S$9 billion of the tens of billions required to build not just T5 but a third runway and systems that will help move passengers, baggage and airside vehicles.

“Given the importance of the air hub to Singapore, we need to strike the right balance, and keep charges for airlines and passengers at a level that will ensure that Changi remains competitive,” he said while emphasising the need to expand Changi Airport’s capacity to meet rising needs.

The “Changi Experience” is what distinguishes Changi from all other airports around the world, he said. Expanding airport capacity ahead of time thus maintains and enhances this experience.

“T5 will allow better integration of airport operations … It will benefit passengers like you and me by offering quicker access to boarding gates and convenient transfers. The ‘Changi Experience’ will be further enhanced and new standards for passenger experience will be set,” he said.

In 2018, traffic through Changi Airport is projected to grow between 3.5 per cent and 5.5 per cent. In the coming years, traffic growth is expected to be at 3 per cent to 4 per cent each year.

Changi East will allow the airport to serve up to an additional 50 million passengers per annum in its initial phase, a 60-per-cent increase from Changi’s current capacity, and more than the combined capacities of Terminals 2 and 3, he added.

Responding to a query by Member of Parliament (MP) Zaqy Mohamad, Mr Ng said that the ministry did consider differentiating the ADL by distance travelled but decided against it.

“Passengers make use of the same facilities at the airport, regardless of where they are flying to, it is only fair that the charges that they pay are the same,” he said.

NEW TECHNOLOGIES IN AVIATION

Mr Ng also touched on new technologies that will be used in airport operations and the use of drones in many new areas.

CAAS will launch an Aviation Transformation Programme (ATP) to promote the use of new technologies like autonomous vehicles, artificial intelligence, and augmented reality to improve airport operations.

The ATP will focus on four areas: Strategic air traffic management; seamless ground operations; effective and efficient Security; and a premium travel experience.

As air traffic volumes grow, CAAS will leverage on technology to enhance air traffic management capabilities, he said. Under the Air Transport Industry Transformation Map, 4,700 jobs will be created by 2020.

The second key technological development in the air transport sector is that of unmanned aircraft systems (UAS) or drones, Mr Ng said.

"There is huge potential for UAS to spur new and innovative applications across industries," he said.

"This would further increase productivity and enhance service delivery. One such area is in logistics, where UAS can quickly deliver parcels by air to the consumer. In time to come, UAS can potentially even ferry people through the air, adding a new dimension to urban mobility."

However, Singapore will also address concerns about the security and safety of such systems.

"Given Singapore’s busy airspace and dense urban environment, we need to be extra careful that UAS do not pose risks to manned aircraft operations or public safety," he said.

Source: CNA/hm

Travellers using Changi Airport to pay higher fees and charges from July 1

Travellers using Changi Airport to pay higher fees and charges from July 1

Passengers who now pay $34 to fly out of Changi will have to fork out an extra $13.30 from July 1, to help fund major expansion plans for the airport that aim to cement Singapore's status as a key aviation hub.

Transit passengers will have to pay $3 more for each flight, with the increases to be included in their air fares.

Airlines will also have to pay more in aircraft parking and landing fees, said the Ministry of Transport, Civil Aviation Authority of Singapore (CAAS) and Changi Airport Group on Wednesday (Feb 28).

By April 1, 2024, the total departure fee for passengers departing from Changi Airport will go up to $62.30, the authorities said, even as they stressed that the bulk of the costs for the Changi East development, which includes the construction of Terminal 5, will be borne by the Government and Changi Airport Group (CAG), which operates the airport.

It is not clear if the departure fee will be reduced when the Changi East development is completed and T5 opened around 2030.

The departure fee is made up of a passenger service and security fee, an aviation levy charge and the new airport development levy.

The Sunday Times had reported in January that passenger fees will increase by between $10 and $15 to help pay for the works, which include a third runway, ground improvement works at the site of more than 1,000ha and the building of massive drains and tunnels, some of which will move bags and people between T5 and the current airport.

The total bill is expected to run into tens of billions, the Government said on Wednesday, without divulging actual numbers.



When completed, T5 is expected to eventually handle up to 70 million passengers a year - more than T1, T2 and T3 combined. However, the third runway being built in the same project will be operational in the early 2020s before the completion of T5.

CAAS director-general Kevin Shum told journalists: "Changi East is our investment to secure Singapore's future. We need to cater to increasing air traffic as Singaporeans travel more. At the same time, we want to plug into the growth of the region. That is why we are doing all of these to ensure that Singapore remains the premier air hub for the region."

Transport Minister Khaw Boon Wan stressed in a Facebook posting that the Government will be the main funder through grants, while CAAS and CAG will dip into their reserves and future surpluses to help fund T5.

"Airport users, like airlines and passengers will also have to do their part in funding this project... Having the Government and the airport community contribute towards the project is a fair way to finance the project, which will bring benefits to our people, businesses and the Singapore economy."

CAG said in a statement that the airport handled a record number of 62.2 million passengers in 2017, with growth expected to continue with the demand for air travel in the Asia-Pacific region projected to triple over the next two decades.

Based on its projections, the airport's current handling capacity of 85 million passengers per annum is expected to be fully utilised by the late 2020s.

"Without further expansion, service standards may drop, with passengers experiencing delays," the airport said.



Other airports have introduced user charges to support growth plans.

In 2016, Hong Kong International Airport, which is building a third runway due to be completed in 2024, started collecting between HK$70 and HK$180 (S$11.85 to S$30.50) a traveller. Also in 2016, airports in Dubai, United Arab Emirates and Doha in Qatar introduced a departure tax for travellers - the equivalent of about $13 - to help fund ongoing expansion projects.

The International Air Transport Association - the global voice of airlines - has, however, said repeatedly it does not support pre-funding, where airlines have to pay for services and facilities they do not currently utilise.

Its regional vice-president (Asia Pacific) Conrad Clifford told The Straits Times: "While we recognise that the (Singapore) Government will be bearing the majority of the costs for the development of Changi East and Terminal 5, we are still disappointed with the decision to proceed with the pre-funding model despite the feedback provided by the industry.

"We are also hoping to have greater transparency on what is the projected cost of Changi East and Terminal 5, and how the costs are being apportioned between the Government, CAG, airlines and passengers."

He noted that aviation is an economic catalyst and the added capacity does not just benefit the aviation community but the entire Singapore economy, including tourism, trade and manufacturing.

He said: "Making air travel more expensive for passengers will have a negative impact on travel, tourism, and as a result, aviation's contribution to an economy. Increasing charges for airlines could also affect the financial viability of their services to and from the airport."

Despite the higher charges for travellers and airlines, some aviation analysts said they do not expect that this will have a significant negative impact on Changi Airport and Singapore's aviation hub status.

~News courtesy of Straits Times~