Public Others Government Business Arts Community
Entertainment Lifestyle Services People Travel Internet Stuff

 

 

     FrontPage Edition: Fri 12 November 2004

Weather: Meteorological Service Singapore    High & Low Tides

Yesterday     2004     2003     2002     2001     2000     1999

Changes in Singapore Aviation Landscape

 

There have been significant changes to Singapore’s aviation landscape since the start of the year.

Singapore now has two new Singapore carriers, Valuair and Tiger Airways, with another, Jetstar Asia, planning to start services by year end. With Tiger’s commitment, CAAS has decided to build a dedicated terminal for such low cost carriers.

A third ground-handling licence was awarded to Swissport International in Jun 04 while Dnata bought CIAS in Sep 04.

For the past six months, Changi’s network continued to grow, with an increase of four new airlines, nine new passenger city links and 121 weekly services. Changi’s passenger and cargo traffic is projected to reach a record of 30.2m passengers and 1.74m tonnes in 2004.

Low Cost Carriers (LCC) Operations at Changi

Since Apr 04, two new Singapore LCCs, Valuair and Tiger have joined Thai AirAsia at Changi. These three LCCs now account for about 5% of Changi’s total flights.

Increased competition has also reduced Singapore-Bangkok air fares on sectors like Singapore-Bangkok. Nonetheless, full service carriers (FSCs) have maintained their frequency of services on these routes.

Overall traffic on sectors served by LCCs for Jun-Aug 04 has grown by an average of 12% as compared to the same period in 2002[1]; ahead of Changi's overall traffic growth of 6%. The NATAS travel fair in Sep 04 drew record sales, with strong demand for destinations like Hong Kong and Thailand.

Jetstar Asia is expected to be launched in Dec 04.

With more flights and passengers at Changi, other aviation-related companies such as the ground-handlers, inflight caterers and maintenance, repairs and overhaul (MRO) companies could also see an increase in business. There would also be multiplier effects on our overall economy.
With Tiger Airways’ commitment, CAAS has decided to construct a dedicated low cost terminal to cater to the no-frills operating model of LCCs.
The terminal will be simple, functional and cost-effective. There will be no aerobridges or a complex baggage handling system. The single storey terminal will also eliminate the need for escalators or lifts. CAAS plans to introduce an appropriate mix of retail and food and beverage outlets to make the experience a pleasant one.
The 25,000 sqm (about 3 football fields) terminal will be completed by mid-2006, and can handle 2.7m passengers a year. The terminal can be expanded modularly as traffic grows.
FSCs can also use the low cost terminal if it suits their operating model. Similarly, LCCs can choose to use Terminals 1 and 2.
Changi's Ground Handling landscape
In Jun 04, CAAS awarded Zurich-based Swissport International a 10-year licence to be the third ground handler at Changi.
Swissport plans to start operations by Jul 05. It is the world’s second largest ground handler in terms of revenue, with an annual turnover of US$925m in 2003.
It operates at 160 airports worldwide, but mostly in the US and Europe. With its strong global links and international experience, Swissport is well-placed to contribute to Changi’s growth.
In Sep 04, Temasek Holdings sold its entire stake in CIAS to Dnata, a unit of Dubai’s Emirates Group. Dnata is the sole ground handling agent at the Dubai International Airport, with about 10 years of experience in overseas operations, namely in Pakistan, Manila and Tehran.
As part of its restructuring to make itself more competitive, SATS had undergone a retrenchment and outsourcing exercise in Sep 04.
The restructuring exercise will reportedly incur a one-time cost of around $28m in the current financial year and result in annual cost savings of around $20m. When completed, SATS will have a staff strength of about 7,700, down 16% from last year’s peak of 9,200.
Intensifying Airport & Airline Competition
Today, Changi is an important international hub serving many key routes. Many airlines hub at Changi because of our efficiency, competitive charges and excellent connectivity. For example, we are a leading player on the Kangaroo Route (between UK and Australia) as SIA and Qantas/British Airways hub at Changi.
However, competition will continue to intensify as travellers on the Kangaroo Route can choose to transit at other airports such as Bangkok and Dubai. Even Hong Kong, which appears to be geographically less ideal to serve the Kangaroo Route, is a possible transit point as the total flight time between Australia and Europe via Hong Kong is only marginally longer than via Singapore.
In addition, new aircraft technology in the form of the ultra-long range aircraft (Airbus 340-500) has made it technically possible for airlines to bypass Singapore (between UK and Australia). Currently, there are no direct flights between Europe and Australia. As end-to-end traffic between European points and Australia grows, it may be commercially viable to have such flights in future.
To maintain our competitiveness on key routes such as the Kangaroo route, SIA will have to continue to innovate and improve its product while Changi will have to continually re-invent the “Changi Experience” for passengers and be even more efficient and cost competitive to anchor our airline partners.
Singapore will also have to remain attractive as a business centre and leisure destination so that there is sufficient origin-destination traffic (e.g. UK-Singapore and Australia-Singapore) for airlines to continue to transit at Changi.
As Changi takes steps to enhance the “Changi Experience”, other major airports like Dubai and Bangkok also continue to upgrade themselves.
Dubai International Airport
The construction of Dubai’s new Terminal 3 is on-schedule for completion in 2006. When completed, Dubai’s handling capacity will be more than tripled to 70m passengers.
Dubai’s Terminal 3 also incorporates a new underground design concept that directly links it to two concourses. Dubai will hence become a very passenger-friendly airport with ample capacity for future growth.
Dubai’s airport expansion and upgrading is supported by the UAE’s open skies policy and the rapid expansion of its national airline, Emirates. Emirates has been instrumental in helping to build up Dubai as a hub for major trunk routes like the Kangaroo route.
Emirates today operates more than double SIA’s flights to the UK, and has significantly increased its own services to Australia and New Zealand since 2003.
Last year, Dubai won several best airport awards from international organisations/publications such as IATA and Business Traveller. With the expansion of its airport, heavy investments in improving Dubai as a leisure/business destination and aggressive expansion by Emirates, Dubai is set to become a major international air hub.
New Bangkok International Airport
Bangkok’s new Suvarnabhumi Airport will remove the capacity constraints of the existing airport. It is envisaged to have an interim handling capacity of 45m passengers, and 100m upon full development.
Bangkok’s traffic base and position as a hub is further supported by Thai Airways’ (TG) revamp and Thailand’s liberal approach in allowing foreign carriers to set up airlines in Thailand.
TG has revamped its domestic network, added more international destinations, increased frequencies to existing destinations, and expanded its fleet (including the Airbus 380 and Airbus 340-500/600 aircraft). Malaysia’s AirAsia also started operations from Thailand under the Thai AirAsia set-up.
On the cargo front, Qantas has recently taken a 49% stake to set up a Bangkok-based cargo airline, Thai Air Cargo, with the view to operate regional cargo operations from Bangkok.
[1] 2003 was not used as a base because of SARS.

Source: Ministry of Information, Communications & The Arts Press Release 8 Nov 2004

Important Notice

Our FrontPage Editions are a historical record of our Web site and reflect the changing of the times, and also of our Web site through time. We do not and will not update the links and stories on these FrontPages even if they have become obsolete.

 

If you have an event or some news to share with our readers, send the details, including picture(s), to us at editor@getformesingapore.com.

We are now 7228 pages thick and growing.

Public Holidays HARI RAYA PUASA is the next public holiday. It falls on 14 November 2004.