Singapore Changi Airport will begin construction work on Terminal 5 in 2014, even as Terminal 4 which is presently being built is not targeted to be ready by then. The addition of the fifth terminal, which will extend from Terminal 1 into its current car park, will double Changi’s capacity by the mid-2020s.
The announcement by Singapore’s prime minister Lee Hsien Loong should not surprise. Changi is consistently upgrading and expanding. When plans were made to shift the nation’s hub airport from Paya Lebar to Changi – which was inaugurated in 1981 – the master-plan already made provisions for at least three terminals. The second terminal was added in 1990, and the third in 2008. The budget terminal, which operated from 2006 to 2012 and added to meet the growth of low-cost operators in the region, has made way for a new Terminal 4 which is expected to be ready in 2017.
Changi’s present capacity of 66 million passengers already surpasses Kuala Lumpur International Airport (KLIA)’s 40 million passengers and Bangkok Suvarnabhumi Airport’s 45 million passengers. Lee cited these two regional rivals as being geographically better placed than Changi to be Southeast Asia’s major air hub. The exhortation in itself tells the Changi success story thus far – that in spite of it, the airport is able to attract and retain customers, offering superior infrastructure, competitive rates and extensive connections, and above all, operating on the back of a very liberal air policy.
Can this change? In the bigger arena, Qantas’ tie-up with Emirates Airline resulting in the shift of its hub for the kangaroo route from Changi to Dubai International shows that it can. The next question then is whether KLIA and Suvarnabhumi, within Southeast Asia, can be as good a Dubai alternative to Changi. The challenge arose a few times in the past – when Qantas considered routing their flights through Bangkok instead of Singapore that would cut down on flight time, when some airlines considered transiting at KLIA’s predecessor Subang Airport because of cheaper rates, and of course when both Bangkok and Kuala Lumpur opened Suvarnabhumi and KLIA respectively. But Changi held out. It is a constant catch-up game, and therefore imperative that Changi continues to maintain its lead over its rivals by moving ahead of them.
Already KLIA and Suvarnabhumi are making plans to accommodate 100 million passengers annually. It is a hard truth of the airport business and competition. Forward planning is key, and often on a very long term fraught with uncertainties in a fast-changing environment. In 2012 Changi handled 51 million passengers, well over 20% below capacity. When Terminal 4 becomes operational in 2017, it will still be – happily, hopefully – over-capacity. The rule of thumb is: Capacity creates demand.
There will be a lot more air movements when Asean Open Skies is implemented in 2015. Many regional airlines, in particular low-cost carriers such as AirAsia and Lion Air, are stepping up efforts to carve out a bigger slice of the growing pie. Local LCC Tigerair Singapore is expanding in its stronghold which Jetstar Asia, part-owned by Qantas, also calls home (“Singapore Airlines reaches a make or break point“, 16th Aug, 13). Secondary airports will enjoy some prominence and primary airports will compete to be the gateway to those secondary destinations. The competition within the region will intensify, hence understandably Changi’s focus closer home to being the hub in Southeast Asia.
Similar to Dubai, Changi is a major transit hub, with transit passengers making up about 30% of its traffic. In principle, through transit may be handled at any port so long as it meets the minimum standards or requirements of the user airline whose concern in present times may be largely influenced by cost. Bahrain Airport was a jewel in the Middle East during the 1970s, but bypassed by many airlines today. Consider how as Bahrain lost its shine, Dubai became the new shining star. Attractive physical features aside, Dubai is well-connected and has become a gateway to the Middle East, Africa, Europe, even the United States offering a wide array of transfer options. In the same way, Changi has relied on its extensive network connections to attract passengers who want to pass through Changi. Of course, its facilities have impressed almost every passenger who passes through the spacious and comprehensively endowed airport.
Hub airports, particularly east of Europe, have employed the “airport city” concept to enhance their attraction not only as a transit stop but also as a destination in itself. That is why Changi has been consistently voted by transit passengers – especially those with long layover time – as one of the world’s best airports, where you can sample a variety of food, drink beer to your heart’s content, have a shower or a massage, watch a movie, keep updated with global news, swim or bask in the sun, listen to birdsong or relax in one of its gardens and even catch a nap in some specially dedicated private area for that purpose. Besides Changi, you think also of Hong Kong International Airport with its array of passenger facilities, range of shops and restaurants.
Certainly other hub airports can replicate several of those facilities, thus levelling the playing field. Dubai for one backed by the country’s national wealth has created a very opulent airport aimed at attracting premium travellers. But interestingly, Bahrain and Dubai located within the same Middle East region have shown how an airport’s fortune can rise and fall. It may be a little overcautious to think that many airports within the same Southeast Asia region could easily challenge Changi on its success, but Singapore has always been known to guard itself against resting on its laurels. The sentiment aside, what else can Changi do to reaffirm its leading airport status?
Prime minister Lee said his government aimed to continue making Singapore a vibrant hub city in Southeast Asia. To encourage more airlines to call at Changi, Singapore has to be an attractive destination in itself that will bring in more visitors than just travellers passing through the airport. It must aim to be the Heathrow of not just Southeast Asia but the bigger Asia, a challenge that it will face increasingly as more airlines operate end-to-end traffic within the region and across long distances with improved technology. A case in point may be the shift of the Qantas’ kangaroo hub from Changi to Dubai; Qantas has allayed local concerns that this would be compensated by more flights from Australia to Singapore and that Changi would be its regional hub instead for hops to other Asian destinations (“Why is Singapore important to Qantas“, 5th Aug, 13).
Just making a hop without visiting, which may not necessarily be confined by Singapore’s physical boundary, even for a short stay may risk a Dubai replay especially when it is said that KLIA and Suvarnabhumi are better placed geographically, however remote the chances of that happening in the foreseeable term may be. With superior infrastructure, exemplary service and extensive connections, Changi has enjoyed a competitive edge over regional airports for transit traffic. But Changi too can be more than a Dubai, benefitting from Singapore’s attraction as a destination in itself – both as a tourist getaway, the kind of allure that Bangkok has, and as a significant business hub that it already is today.