Expansion of Air Hub Development Fund is one more example of Changi's practical partnership

Singapore's Changi Airport is working proactively to meet the needs of airlines facing challenges in the current economic climate.

Last month, the Civil Aviation Authority of Singapore (CAAS) announced its decision to extend and expand its Air Hub Development Fund "to help airlines and airport partners affected by the global economic downturn," it said in a 12 December media release.

Due to expire 31 December, 2008, the fund was extended by another year and expanded by 30% to a total of S$130 million. According to a report in the Straits Times, this is the largest amount set aside in a single year since the fund was introduced in 2003 to meet industry needs during the SARS crisis.

Mr Peter Harbison, Executive Chairman of the Centre for Asia Pacific Aviation (CAPA), welcomed the move as "just one more example of Singapore Changi's practical partnership in the industry".  CAPA awarded Changi "Airport of the Year" in its Aviation Awards of Excellence 2008 last October.

Under the new package, airlines and other partners will continue to receive the 15% across-the-board rental rebate for tenants of offices, airline lounges and warehouses at Changi Airport and Seletar Airport. 

In addition, landing fee rebates will be increased to 25%, up from 15% last year as "a one-time economic relief measure introduced for 2009". Changi's landing fees, among the most competitive in the region, are one of the reasons why airlines are attracted to the airport, which accounts for 100,000 jobs and is worth over S$10 billion to the Singapore economy.

The new package, will support the various ongoing incentive schemes which encourage airlines to look for growth opportunities to extend their network and capacity or drive traffic to and through Changi Airport.

Mr Lim Kim Choon, Director-General and Chief Executive Officer, CAAS, said CAAS recognised the tough operating environment that airlines and airport partners are currently operating in and added that this move was "an assurance of CAAS' commitment to support the airlines at Changi Airport and aviation industry players in Singapore, especially in bad times".

In addition to rebates and incentives, CAAS has also implemented initiatives on the air traffic management front to help airlines reduce operating costs.  For example, the authority worked with ICAO (International Civil Aviation Organization) to implement a regional air traffic management system that regulates Europe-bound air traffic over the Bay of Bengal, resulting in a reduction of air traffic congestion, which in turn reduces delays and operating costs for airlines. 

This, together with other initiatives, have helped to increase capacity and efficiency on the usage of airspace, and reduce flight delays, resulting in estimated fuel savings of over S$45 million per annum for airlines, said CAAS.

Mr Harbison told P@SSPORT, "A lot of airports talk about it, but Changi has shown over and over again that it has both the imagination and the courage to try to influence outcomes."

Despite airport charges being a relatively small part of the aviation equation, they are especially significant for shorter haul services, where they constitute a proportionately higher overall cost.

"Changi's air traffic management innovations also contribute to reducing greenhouse gas emissions, so there is a double benefit - and set an example which will hopefully be followed by others. Many of these ATC (Air Traffic Control) changes are really little more than common sense and, once a leader starts showing the way, history tells us that others look - and eventually follow," Said Mr Harbison.

Singapore Airlines' spokesman, Mr Stephen Forshaw, commenting on the latest CAAS measures, said, "We welcome any initiatives that lower the cost burden on airlines, particularly at this difficult time, and applaud the CAAS for its proactive stand on supporting air traffic development through Changi."

Changi may not be spared the effects of the global slowdown in air traffic so the move to help airlines is timely. For the first 11 months of 2008, passenger movements rose by 3.1% to 34.2 million, compared January to November 2007.  However, November numbers saw a drop of 3.2% to 3.08 million, compared to November 2007. 

Airfreight tonnage for November 2008 too fell by 14.2% compared to November last year.  For the first 11 months this year, it dipped by 0.2% compared to the same period in 2007. 

The seven-day closure of Bangkok's Suvarnabhumi Airport could have affected these numbers and may have some effect on December's figures as Bangkok, a vital aviation hub for the region, has close ties to Changi in terms of routes for passenger and cargo travel.

Bangkok is currently the third-busiest route out of Changi after Kuala Lumpur and Jakarta and in terms of passenger numbers, the Singapore-Bangkok route is the busiest, with 2.29 million passengers flying the route in the first 10 months of 2008.

According to data from the Airports of Thailand (AOT), Changi was the top contributor of international passenger traffic to Bangkok last year, sending 2.9 million people through the airport, almost 9% of the total traffic. Cargo to and from Singapore also made up 9% of the total, at 106,841 tonnes.