Analysis - Changi Terminal 3 Lifts Singapore as Regional Air-Hub

(Analysis from Asia Today International, Australia's regional business magazine. Contact: asiatoday(at)asiatoday.com.au)

SINGAPORE, May 15 Asia Pulse - After several years in planning and construction, Singapore Changi Airports Terminal 3, costing S$1.75 billion (US$1.27 billion), finally opened for scheduled flights in January. Design started in 2001, and the terminal was due to open earlier, but authorities delayed because they felt Terminals One and Two could handle passenger growth.

Terminal 3 lifts Changi capacity to 70 million passengers a year, and increases the number of gates from which the new A-380 can operate. In 2006, some 35 million passengers used Changi airport. Singapore plans a sharp rise in arrivals, with completion of two integrated resorts, both with casinos, due in the next two years, and more hosting of international events, including the world's first night-time Formula One this year.

Aside from income generated from tourism, running an airport is a lucrative business. Changi, which ranks as the sixth-largest airport in the world, generates revenue of more than S$1 billion each year, and a surplus of more than S$300 million a year for its owner/ operator, the Civil Aviation Authority of Singapore (CAAS).

More than a purely utilitarian facility for air travellers, Changi also offers entertainment and shopping for both air travellers and casual visitors. Commercial revenue makes up 60 per cent of annual revenue, compared to the global average of 48 per cent. Just 40 per cent of Changi revenue comes from aeronautical changes. Goh Yong Long, CAAS Director of Corporate Communications, says the policy is to use commercial revenue to supplement aeronautical revenue.

"CAAS has always kept its landing fees low, to remain competitive against other airports in the region. To keep our airline fees low, our terminals offer more than 260 shops and more than 120 food and beverage outlets," he says.

Changi offers a wide range of services often overlooked by harried passengers rushing to their boarding gates. These services are designed to enhance Changi's role as a hub airport, where passengers connect to other destinations in Southeast Asia. Goh points out that Terminal One offers a swimming pool for passengers in transit. Those who know about the facility bring their bathing costumes and use the pool, he says. Changi also offers theme gardens, and, to break the tedium of waiting for the next connection, at times even arranges for entertainment for passengers.

It operates a facilities centre with day rooms for those who need a nap, a shower or a change of clothes. In fact, in the new T-3, there is an arrival lounge offering similar facilities for disembarking passengers. Described as the first in Asia, the Plaza Premium Lounge has Internet connections, meeting rooms, napping rooms and a lounge.

Terminal 2 houses JetQuay (www.jetquay. com.sg), a terminal within a terminal for elite travellers who shun the hassle of a regular airport. For S$1,000, passengers, whether travelling on commercial airlines or private jets, can be whisked away by limousine as soon they touch down to the terminal where immigration and customs formalities are handled.

For outbound passengers, JetQuay staff will take care of duty-free shopping as they wait to board their plane. The fee includes a police escort to and from the aircraft. JetQuay can also provide a buggy service to collect and drop passengers to their aircraft, for S$250 per passenger. Koh Euleen, Jet-Quays Director, Sales and Marketing, says boards of multinationals which have their regional headquarters in Singapore sometimes hold Board meetings at the private terminal. "We would have a Board meeting every week," she says, adding that executives based in Singapore are escorted into the Board room for their meetings with visiting Directors. JetQuay, which now handles 50 passengers and two private jets a day, was converted from the old VIP section in 2006. Koh says most of its members are corporations, including foreign governments.

Construction of T3 began in 2000. It will have annual handling capacity of 22 million passengers, bringing the total capacity of the airport to 70 million a year. Goh says Changi's budget terminal now caters to two airlines. Budget airlines deliver 10 per cent of passengers and represent 13 per cent of flights. CAAS has added an airport logistics park, designed as a free trade zone, to the airport complex. It is the second FTZ at the airport, occupying a total of 47 hectares.

ASIA PULSE