Tuesday, August 7, 2012

Changi Airport must act decisively

Business Times: Tue, Aug 07

BY any measure, Singapore's Changi Airport is not just a national icon, it is also a world renowned success story. This is an airport which is among the busiest international hubs in the world - and a multiple award-winning one at that, having bagged over 390 awards since 1981.

But past achievements are no guarantee of future success. While it would be an overstatement to say that storm clouds are gathering over Changi, this hub airport nevertheless faces increasing challenges, not just from rival hub airports in Asia and the Middle East, but also from changes impacting its key customer airlines.

In recent years, Changi has come under increasing pressure as rival hubs such as Dubai, Incheon (South Korea), Hong Kong and others have upped their game. For example, during the last two years, Incheon beat out Changi to second spot in the global Airport Quality Awards. Located some 70km away from Seoul, Incheon has developed into a unique "airport city", offering aesthetic medical services, fashion-retail, casinos and other tourist-related attractions targeted at travellers from north-eastern China. Further south, Hong Kong has been raising the ante by offering direct sea and ferry connectivity to the Pearl River Delta, home to some 120 million people. In the Middle East, the growth of mega carriers such as Emirates, Etihad and Qatar Airways, coupled with the economic dynamism of the Indian sub-continent, are fuelling the growth of airports in Dubai, Abu Dhabi and Doha.

Changi could also face new challenges which have to do with the fortunes of its two biggest customer airlines: Singapore Airlines (SIA) and Qantas.

SIA, which fuelled Changi's early growth by directing all flights through Singapore, has been under pressure internationally and on regional services. It is Changi's home airline and single biggest operator by far, so its troubles will ultimately be those of the airport as well.

Meanwhile, Qantas - Changi's second biggest customer - is in discussions to get into an alliance with Emirates. If that happens, many of its hub operations could move from Changi to Dubai.

Besides these issues, the airport is already grappling with airside congestion, which has reached a level where flights are regularly delayed by up to half an hour.

But the airport is moving to address this. Plans for Changi's third runway will be unveiled at the end of this year by the Changi 2036 Steering Committee. The runway already exists, though exclusively for military use. It has to be extended for large civil aircraft, and also incorporate the adjacent 1,000 hectares to the existing 1,300 ha Changi Airport real estate.

Faced with new realities - which include double-digit passenger growth, a third of its passengers travelling budget, and three-quarters coming to destination Singapore (rather than transit) - Changi has to move quickly, decisively and think out of the box. This is because, at the speed at which events are moving in the aviation industry, concepts can be rendered obsolete by the time they get implemented.

 Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C
Senior Sales Director
Email: marshe_inc@yahoo.com.sg
DTZ Debenham Tie Leung (SEA) Pte Ltd (L3006301G)

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