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22-08-13, 12:21
http://www.businesstimes.com.sg/archive/tuesday/premium/top-stories/build-it-and-theyll-come-20130820
Published August 20, 2013
COMMENTARY
Build it and they'll come
Changi is preparing for the future and building up its capacity now
By Ven Sreenivasan [email protected]
Associate News Editor
IN the movie Field of Dreams, Kevin Costner, who plays an avid baseball player, hears the voices of dead baseball players saying: "If you build it, they will come."
Perhaps this is an apt phrase for hub airports. After all, this is an industry where supply creates demand. And this is more so today as many travellers plan their own itineraries and select their own flight connections, often leading to longer layovers at airports. That is when the quality of the airport facilities, the comfort and conveniences at the airport terminals, the efficiency of immigrations and customs clearance, and the on-time departures, come into play. And this is where Changi has beaten the competition.
The decision to build a 16 million passenger capacity Terminal 4 in place of the smaller Budget Terminal was just the first step in a move to ensure that Changi keeps ahead of the growth curve. Now plans have been unveiled for Project Jewel and even T5. Like T1, T2 and T3, they will be designed to cater to travellers who increasingly "decant" for hours while waiting for connecting flights.
And on Sunday, Prime Minister Lee Hsien Loong provided a teaser on what the Changi air hub could look like in about 20 years. An iconic glass-canopied mixed-use complex codenamed "Project Jewel" will sit on a 3.5 hectare plot now occupied by the open-air carpark fronting Terminal 1. Offering aviation and travel-related facilities, a wide range of unique retail and recreational offerings to travellers as well as landside visitors, it will be a crown jewel of Changi Airport.
Beyond this, there are plans to develop some 1,000 ha of land - about three times the size of Marina Bay - lying south-east of the current airport, which itself occupies some 1,350 ha. This plan envisages a new runway 3, and Terminal 5 sandwiched between this new third runway and the second runway. Further south-east, and parallel to the other runways, will be a fourth runway catering to the air force and possibly the current tenants of Paya Lebar Airbase. These are huge initiatives and by some estimates the entire expansion could cost between $6 billion and $10 billion. But why all this emphasis on Changi?
Simple: it is the lifeblood of the Singapore economy. Around the world, the health and vibrancy of the main hub airport impacts the health of the economy. And this linkage has become stronger as the world becomes increasingly tightly knit by air travel and air connectivity. That is why policymakers in places like Dubai, Abu Dhabi, South Korea, Thailand, Malaysia, Indonesia and Hong Kong have put in such huge resources to develop their hub airports.
Yet Changi has persevered as the primary hub in Asia. For the 12 months to January this year, it was ranked by Airport Council International as the third busiest Asia-Middle East hub airport by international passenger numbers, behind Dubai and Hong Kong.
Handling 100 airlines which operate 6,400 weekly flights connecting Singapore to over 250 cities in about 60 countries and territories worldwide, Changi is the primary gateway to Singapore. In 1981, its first year in operation, Changi handled 8.1 million passengers, 193,000 tonnes of air freight and 63,100 aircraft movements. Last year, it handled over 51 million passengers, 1.8 million tonnes of freight and 324,722 aircraft movements. Changi and the Singapore aerospace hub that has grown around it directly and indirectly account for over 150,000 jobs and some 6 per cent of the economy. And the Changi hub's growth has been one of a symbiotic partnership with another Singapore icon - Singapore Airlines.
These achievements are all the more remarkable given that Singapore is not a natural hub for air travel. If one were flying in from Europe to connect into Asia and the Pacific, Bangkok or Kuala Lumpur make more sense in terms of geography. Further east, Incheon in Korea and Hong Kong make for more natural connections to the vibrant North-east Asia region. Meanwhile, Abu Dhabi and Dubai sit at the geographical epicentre for air connectivity between Africa, Asia, Europe and the Americas.
Changi continues to take them on. That said, the more pressing issue for it is not terminal capacity. Rather, it is runway congestion. Over the last several years, budget carriers have accounted for almost all the growth at the airport. But the narrowbody planes operating at higher frequencies have added more to runway traffic than they have to terminal traffic. Last year, aircraft movements were up by 15 per cent, versus passenger movement growth of 10 per cent. This has been the trend since the launch of budget carriers in the Singapore market in 2004. That is why the multi-agency Changi 2036 Steering Committee has been charting a comprehensive Changi developmental masterplan.
All this comes at a time when Changi's competitors are upping their game. Hong Kong Airport is capturing the Pearl River Delta market, with its 120 million passenger traffic, by using airport ferries and purpose-built piers to transfer passengers to and out of the airport to cities in the region.
Incheon, located some 70 km away from Seoul, is developing its own "city" offering aesthetic medical services, fashion-retail, casinos and other attractions targeted at travellers from north-eastern China. KL International Airport, Bangkok's Suvarnabhumi and Soekarno-Hatta in Jakarta are boosting their respective capacities.
While Changi was third in Asia-Middle East international passenger numbers, its competitors are seeing rapid growth. Singapore's international passenger numbers grew 8.9 per cent last year, compared to 13.9 per cent for Dubai, 13 per cent for Bangkok and 11.4 per cent at Incheon.
It took 10 years for Changi's passenger numbers to increase from 30 million to 40 million in 2010. But with growth accelerating to 10 per cent in recent years, and over 51 million people already passing through its gates last year, Changi could hit its 85 million capacity limit by 2020.
Changi Airport's success over the past four decades was largely due to its ability to study trends and prepare for the future, well before it arrives. And we were given a glimpse of the future last weekend.
It continues to build so they will come.
Published August 20, 2013
COMMENTARY
Build it and they'll come
Changi is preparing for the future and building up its capacity now
By Ven Sreenivasan [email protected]
Associate News Editor
IN the movie Field of Dreams, Kevin Costner, who plays an avid baseball player, hears the voices of dead baseball players saying: "If you build it, they will come."
Perhaps this is an apt phrase for hub airports. After all, this is an industry where supply creates demand. And this is more so today as many travellers plan their own itineraries and select their own flight connections, often leading to longer layovers at airports. That is when the quality of the airport facilities, the comfort and conveniences at the airport terminals, the efficiency of immigrations and customs clearance, and the on-time departures, come into play. And this is where Changi has beaten the competition.
The decision to build a 16 million passenger capacity Terminal 4 in place of the smaller Budget Terminal was just the first step in a move to ensure that Changi keeps ahead of the growth curve. Now plans have been unveiled for Project Jewel and even T5. Like T1, T2 and T3, they will be designed to cater to travellers who increasingly "decant" for hours while waiting for connecting flights.
And on Sunday, Prime Minister Lee Hsien Loong provided a teaser on what the Changi air hub could look like in about 20 years. An iconic glass-canopied mixed-use complex codenamed "Project Jewel" will sit on a 3.5 hectare plot now occupied by the open-air carpark fronting Terminal 1. Offering aviation and travel-related facilities, a wide range of unique retail and recreational offerings to travellers as well as landside visitors, it will be a crown jewel of Changi Airport.
Beyond this, there are plans to develop some 1,000 ha of land - about three times the size of Marina Bay - lying south-east of the current airport, which itself occupies some 1,350 ha. This plan envisages a new runway 3, and Terminal 5 sandwiched between this new third runway and the second runway. Further south-east, and parallel to the other runways, will be a fourth runway catering to the air force and possibly the current tenants of Paya Lebar Airbase. These are huge initiatives and by some estimates the entire expansion could cost between $6 billion and $10 billion. But why all this emphasis on Changi?
Simple: it is the lifeblood of the Singapore economy. Around the world, the health and vibrancy of the main hub airport impacts the health of the economy. And this linkage has become stronger as the world becomes increasingly tightly knit by air travel and air connectivity. That is why policymakers in places like Dubai, Abu Dhabi, South Korea, Thailand, Malaysia, Indonesia and Hong Kong have put in such huge resources to develop their hub airports.
Yet Changi has persevered as the primary hub in Asia. For the 12 months to January this year, it was ranked by Airport Council International as the third busiest Asia-Middle East hub airport by international passenger numbers, behind Dubai and Hong Kong.
Handling 100 airlines which operate 6,400 weekly flights connecting Singapore to over 250 cities in about 60 countries and territories worldwide, Changi is the primary gateway to Singapore. In 1981, its first year in operation, Changi handled 8.1 million passengers, 193,000 tonnes of air freight and 63,100 aircraft movements. Last year, it handled over 51 million passengers, 1.8 million tonnes of freight and 324,722 aircraft movements. Changi and the Singapore aerospace hub that has grown around it directly and indirectly account for over 150,000 jobs and some 6 per cent of the economy. And the Changi hub's growth has been one of a symbiotic partnership with another Singapore icon - Singapore Airlines.
These achievements are all the more remarkable given that Singapore is not a natural hub for air travel. If one were flying in from Europe to connect into Asia and the Pacific, Bangkok or Kuala Lumpur make more sense in terms of geography. Further east, Incheon in Korea and Hong Kong make for more natural connections to the vibrant North-east Asia region. Meanwhile, Abu Dhabi and Dubai sit at the geographical epicentre for air connectivity between Africa, Asia, Europe and the Americas.
Changi continues to take them on. That said, the more pressing issue for it is not terminal capacity. Rather, it is runway congestion. Over the last several years, budget carriers have accounted for almost all the growth at the airport. But the narrowbody planes operating at higher frequencies have added more to runway traffic than they have to terminal traffic. Last year, aircraft movements were up by 15 per cent, versus passenger movement growth of 10 per cent. This has been the trend since the launch of budget carriers in the Singapore market in 2004. That is why the multi-agency Changi 2036 Steering Committee has been charting a comprehensive Changi developmental masterplan.
All this comes at a time when Changi's competitors are upping their game. Hong Kong Airport is capturing the Pearl River Delta market, with its 120 million passenger traffic, by using airport ferries and purpose-built piers to transfer passengers to and out of the airport to cities in the region.
Incheon, located some 70 km away from Seoul, is developing its own "city" offering aesthetic medical services, fashion-retail, casinos and other attractions targeted at travellers from north-eastern China. KL International Airport, Bangkok's Suvarnabhumi and Soekarno-Hatta in Jakarta are boosting their respective capacities.
While Changi was third in Asia-Middle East international passenger numbers, its competitors are seeing rapid growth. Singapore's international passenger numbers grew 8.9 per cent last year, compared to 13.9 per cent for Dubai, 13 per cent for Bangkok and 11.4 per cent at Incheon.
It took 10 years for Changi's passenger numbers to increase from 30 million to 40 million in 2010. But with growth accelerating to 10 per cent in recent years, and over 51 million people already passing through its gates last year, Changi could hit its 85 million capacity limit by 2020.
Changi Airport's success over the past four decades was largely due to its ability to study trends and prepare for the future, well before it arrives. And we were given a glimpse of the future last weekend.
It continues to build so they will come.