07/02/2018

Changi Airport May Increase Fees To Build Terminal 5

Update 1 Sep 2020: PAP MP Liang Eng Hwa: Should S'pore still go ahead with Terminal 5?

Liang argued that air travel will most like be reduced even after Covid-19, and might never recover to previous levels.

He then asked if the T5 project should go ahead in this environment:
  • "Are our assumptions and parameters still valid in the new permanently changed setting? Are the risks now too high to go ahead with this massive investment?
  • Can we work within our existing 4 terminals, regenerate new value proposition and optimise with what we have instead? We can perhaps still go ahead with the new runway but do we need another terminal building?
  • I hope the government will review the decision. Such mega projects do also consume high numbers of migrant workers and crowd out the more urgent demand by other construction projects."
MOT recently stated that they were using the Covid-19 downtime to revamp the aviation infrastructure by developing a "three-runway system", and reviewing the layout and design of the upcoming Changi Terminal 5.


Changi Airport T5 construction to be 'paused' for at least 2 years amid COVID-19
Terminal 5 was scheduled to be completed around 2030.PHOTO: ST FILE

The mega Changi Airport Terminal 5 project will be paused for at least two years amid uncertainty about how the Covid-19 pandemic will change the aviation sector, Transport Minister Khaw Boon Wan said on Tuesday (June 16).

He said that the Government is currently carrying out a study of how the aviation sector will change, and that the design of T5 will be changed to take into account new safety requirements.

He said that under normal circumstances, the Government would have to start calling for major civil engineering tenders to meet its initial timeline for completing the terminal in the 2030s.

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IATA Objects to Passengers Pre-Funding Singapore Changi's New T5

The airline industry’s most prominent trade body said it objects to any attempts by Singapore to charge travelers to help fund the construction of its new Terminal 5 in Changi Airport.

The International Air Transport Association is “strongly against any pre-financing of any infrastructure,” IATA Chief Executive Officer Alexandre de Juniac told a media roundtable as part of the Singapore Airshow Monday. “We shouldn’t pay first without having the infrastructure ready to be operated and used by airlines and by the users.”

Passengers flying out of Changi Airport may have to pay $10 to $15 extra as part of a new tax being considered to help pay for the hub’s expansion, including the building of T5, the Straits Times newspaper reported last month. Charges for airlines, including parking and landing fees, are expected to rise by about 30 percent, according to the report.

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Iata warns against pre-funding Changi's expansion


WHILE infrastructure constraints remain a major bottleneck in the region, the International Air Transport Association (Iata) warned against pre-funding to finance airport expansion projects such as Changi Airport's upcoming Terminal 5.


Advising against saddling users with additional charges, Iata chief executive Alexandre de Juniac said: "We shouldn't pay first without having the infrastructure ready to be operated & used by the airlines & users. We have mentioned several times that we are not in favour (of it), and we will reiterate our reluctance.

"We have a permanent dialogue with the Singaporean authorities; we have very close links." He was speaking to media on the sidelines of the Singapore Airshow Aviation Leadership Summit (SAALS).

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Prospect of paying more fees, Raise eyebrows with public

There is still no official announcement yet as how much the project will cost

Travellers flying out of Changi Airport and airlines operating in the area may be asked for extra fees and charges from as early as next year to help pay for the future Terminal 5 (T5), which is slated for completion around 2030.

The Changi East development is being built near the current airport, which includes major infrastructure, ground works at the over 1,000 ha site and he building of massive drains and tunnels, some of which will move bags and people between T5 and the current airport.

T5 is expected to eventually handle up to 70 million passengers a year - more than T1, T2 and T3 combined - when completed. However, according to the Straits Times, the third runway being built in the same project will be operational before that, in the early 2020s.

related: Netizens took to social media to express their displeasure

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Global airline body objects to pre-funding for Changi Airport's future Terminal 5

An aerial view of the eastern part of Singapore, where Changi Terminal 5 will be constructed. FOTO: ST FILE

Governments & airports should not expect users to pre-fund expansion projects, said the chief of a global airline body, when asked about plans by Singapore to likely do this for the future Terminal 5 at Changi Airport.

Speaking to reporters on the sidelines of the Singapore Airshow Aviation Leadership Summit 2018, chief executive officer & director-general of the International Air Transport Association, Mr Alexandre de Juniac, said: "We have mentioned many times that we are not in favour of pre-funding. We have a permanent dialogue with Singapore on this & we will keep reiterating and repeating this."

In January, The Straits Times reported that passengers flying out of Changi may soon have to pay between $10 and $15 extra, as part of a new tax being mooted to help pay for a major airport expansion, involving the building of T5.

related: Users shouldn't be pre-funding airport expansion: Iata chief


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Changi Airport Terminal 5 - Financing and Risks


With the recent announcement that travellers may have to pay additional fees to help fund Singapore Changi Airport's future Terminal 5, there has been much discussion about whether the increased passenger taxes are reasonable and whether there is even is a need to build an additional terminal for Singapore Changi Airport.

Looking at this matter from another perspective, it would be good to understand what the other alternatives are for the financing of Terminal 5:
  • A PPP model for the future Terminal 5 has been ruled out - there is only one competent airport operator in Singapore and there would be wider strategic issues if foreign companies get to operate Terminal 5.
  • To fully finance the future Terminal 5 from the national budget would also mean that taxpayers in Singapore would be footing the bill. This would be unfair to taxpayers who do not travel or who will eventually not use Terminal 5.
  • Financing it through a corporate finance model would place Changi Airport Group under considerable financial stress and would also force the airport operator to eventually raise both aeronautical and non-aeronautical charges to break-even.

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Construction of Changi T5 will be done via ‘most optimal way’ of funding: Indranee

The “most optimal way” of funding will be sought when it comes to the construction of the future Terminal 5 at Changi Airport, said Senior Minister of State for Finance Indranee Rajah in Parliament on Tue (Feb 6).

She was responding to a supplementary question from Workers' Party Member of Parliament (MP) Pritam Singh.

Mr Singh had asked for the Government’s response to a comment from the International Air Transport Association (IATA), whose CEO Alexandre de Juniac said on Monday that the trade body is “strongly against any pre-financing of any infrastructure” when asked about media reports that suggested Singapore may charge travellers to help fund for the construction of the new terminal.

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Travellers may have to pay fees to help fund Changi T5

Singapore Management University Associate Professor Terence Fan, who specialises in transport, said it is fair that potential beneficiaries help pay for the T5 development. This includes airlines and travellers who may not end up using the facility but will benefit indirectly, if other terminals are less crowded and more comfortable.

Mr Abbas Ismail, course manager for the diploma in aviation management and services at Temasek Polytechnic, said options must be carefully evaluated. "Changi has always taken the approach to be pro-business and competitive by keeping its aeronautical charges (such as aircraft parking and landing fees) low and even providing the necessary incentives to support traffic growth.

"By getting users to start paying for T5 even before the terminal opens, airport planners must think carefully about what signal it will send to the industry," he said.

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Changi Airport users may have to pay $10 to $15 extra as part of new tax

The tax, which could be imposed from later this year, is expected to be on top of the $34 departure charge. ST FOTO: LIM YAOHUI

Passengers flying out of Changi may soon have to pay between $10 & $15 extra. The Sunday Times understands, as part of a new tax being mooted to help pay for a major airport expansion, involving the building of Terminal 5.

Transit passengers could be charged about half the amount.

The tax, which could be imposed from later this year, is expected to be on top of the $34 departure charge ($6 for transit passengers), comprising a passenger service fee, a security tax & a levy collected by the Civil Aviation Authority of Singapore (CAAS).

related:
Travellers may have to pay fees to help fund Changi T5
The billion-dollar question: Who pays for Changi's T5?
Decades of groundwork for T5 to take flight

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Changi Airport mulls passenger fee increase
Travellers may have to pay fees to help fund Changi’s upcoming T5

Travellers flying from Changi Airport, as well as airlines operating there, may have to pay higher fees and charges from next year.

This increase will go towards the construction of the airport’s Terminal 5 (T5), which is scheduled for completion in 2030, reported The Sunday Times. A spokesperson for the transport ministry said: “We have not ruled out implementing a passenger fee.”

Passengers flying from Changi Airport currently pay a fee of S$34 (US$25.20), comprising components such as security tax, while transiting passengers pay S$6. The last increase was made in April 2013 from S$28.

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Travellers may have to pay fees to help fund Changi T5


Construction has started on Changi Airport Terminal 5. The mega terminal is expected to be completed around 2030 & will eventually increase Changi Airport's capacity to 150 million passengers annually.

Fees & charges for travellers flying out of Changi Airport & airlines operating there could increase from as early as next year. This is to help pay for the future Terminal 5 (T5), which is slated for completion around 2030, the Sunday Times understands.

The total cost of the Changi East development being built near the current airport, which includes major infrastructure & ground works, is expected to run into tens of billions of dollars.

related: Changi's T5 to be bigger than 3 current terminals combined

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Soon You Could Be Paying $10-15 Extra When You Fly Out Of Changi Airport


If you think that increase in passengers’ taxes and airlines’ fees are enough, think again. T5 alone is going to be bigger than the first three terminals combined together.

Hence, the Government will still be responsible for bearing “a large proportion” of total sum needed for the project.

Other than that, our trusty airport operator Changi Airport Group will also direct a significant portion of its profit to the project. In the last financial year, the group has about $660 million in profits, after tax.

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Comments in The Straits Times 20 January at 16:10


Irene Soh wrote, "Small island so many Terminals for what? Don't give excuse like T1 and T2 old already and cant handle too many visitors! Just upgrade them will do."

Samuel Peh wrote, "Ridiculous excuse. If no budget, delay the project. Why need to get the passengers to pay for extra? We have been surviving with 2 airports for so many years. Now we have 4 terminals. Why should government rush into T5 project and get us to pay for their extensions? Being a citizen here, we felt so useless at times because we can't object any of your decisions. You are just like a big bully!"

Peter Tan wrote, "In the end, the ordinary folk has to fork out more besides having to cope with constant rising of almost everything necessary for day to day living even a new airport does not comes free fat hope. Congratulations to all who voted for the party they dearly loved so much."

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A Changi Airport East for all, yet who should fund its bill?

As speculation on how the big price tag on the new Changi Airport East development will be funded continues, Boston Consulting Group’s Hean-Ho Loh sheds light on where he thinks the money can come from

Singapore’s Changi Airport has created a league of its own in the region.

With over 100 airlines & 60 million passengers in 2017, the airport has won the Skytrax Best Airport award for the last 5 consecutive years.

But it is coming under pressure to break new ground and strengthen its value proposition to win over critical masses of consumers & airlines as competition intensifies.

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How to foot bill for Changi's T5?

After setting out to build an airport terminal that is 10 times the size of Singapore's largest shopping mall, stakeholders are looking at ways to fund it.

There is no way that Changi Airport Group (CAG) can pay for the future Terminal 5 & related facilities on its own, said chairman Liew Mun Leong in an exclusive interview with The Straits Times. He feels that the Government would have to step in.

Giving a sense of the scale of the project, he said it would be about 10 times as big as VivoCity.

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Changi Airport calls for T5 development tender
Land development works for Changi East development includes a 3-runway system & airport’s Terminal 5, which has gone to its next phase of ground improvement works. TODAY file foto

Changi Airport Group (CAG) has shortlisted 3 teams to design Terminal 5 (T5), including firms that are involved in the expansion of Heathrow Airport & a new terminal at Abu Dhabi Airport.

Announcing the tender for the provision of Master Architect consultancy services for the development of T5, CAG said on Wed (March 8) that the firms were selected based on their vision & design themes for the terminal, track record on previous airport terminal projects, team composition and experience of key personnel, as well as proposed approach for the delivery of the project.

The shortlisted teams are: Grimshaw Architects, in partnership with DP Architects; KPF Associates, in partnership with Heatherwick Studio, James Corner Field Operations, Architects 61 and Lead 8; and Safdie Architects, in partnership with Skidmore, Owings & Merrill, Surbana Jurong and RSP Archi-tects.

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Govt says no privatisation for Changi Airport Terminal 5


ST reported today that the government has ruled out the privatization of the new Changi Airport Terminal 5 like some other airports in the world. It would be 100% state-owned through the government-held Changi Airport Group (CAG). It is slated to open at the end of next decade.

The decision met with the approval of analysts, who said having the Government wholly run the show ensures that Changi Airport will not focus on profits at the expense of service standards and efficiency.

Mr Abbas Ismail, course manager for aviation management and services at Temasek Polytechnic, said, “Ultimately we have to ask ourselves: Do we want to be a premium airport where we build capacity ahead of demand and put user comfort ahead of everything else, or do we want to become just another airport that makes money, is slightly ahead of the pack but is nothing revolutionary?”

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Changi's T5 likely to be served by 2 MRT lines

Changi Airport's future Terminal 5 will very likely be served by 2 new MRT lines, to make it more accessible to travellers & visitors.

A final decision has not been made, but The Straits Times understands that the plan is for both the future Thomson-East Coast Line & Cross Island Line to be linked to the new mega passenger terminal.

When this happens, it is likely that the existing MRT link between Singapore Expo & Changi Airport will cease to operate.

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Changi East Development
Planning the future in aviation development

Changi Airport Group is part of the inter-agency committee developing Changi East, which encompasses the future Terminal 5 - set to be one of the largest airport terminals in the world. Together with Terminals 1 to 4, Changi Airport will have the ability to handle 135 million passengers per annum.

The team will contribute to the development of Changi East in the areas of programme management, planning, design and construction.

Be part of its pioneer team to chart Singapore's aviation future together.

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Changi Airport Increases Fees To Pay For New Development


Singapore’s Changi Airport is increasing its passenger service charge by 43% to help pay for construction work but will not change the fee for transiting passengers to retain its status as an international hub.

The passenger service charge for transiting and transferring passengers will remain unchanged at S$6.10 ($4.90), but starting April 1, the service charge for all other passengers will increase to S$19.90 from S$13.90, says Changi Airport Group (CAG). The aviation levy of S$6.10 and the passenger security charge of S$8 remain unchanged, it says. The total airlines will need to collect from Singapore outbound passengers for airport fees and charges will be S$34.

CAG says the increases are necessary to help pay for capital works, such as construction of a new terminal. The airport will demolish the budget carrier terminal in September to make way for Terminal 4, which will cater to full-service and budget carriers. This initiative, coupled with a further expansion of Terminal 1, will increase the airport’s passenger capacity to 85 million from 66 million, CAG adds. The airport handled 46.5 million passengers last year and is forecast to have more than 50 million this year.

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Singapore Airshow 2018


Every two years, high-level government and military delegations, as well as senior corporate executives around the world attend the Singapore Airshow to forge partnerships and seal deals in this region. As Asia's largest Airshow, this is the place to be for leading aerospace companies and budding players eager to make their mark in the international aerospace and defence market!

The event offers a unique platform for industry thought leadership through its’ high-level conference, forums and co-located events. Leading industry players, government and military chiefs gather here bi-annually to contribute to dialogues, exchange ideas and seek solutions and strategies to advance the interests of the global aerospace and defence sector.

Singapore Airshow 2018 is scheduled to be held from 6 - 11 February 2018 and will once again bring together the global aerospace community and key commercial, government and military delegations at Asia's largest aerospace and defence event.

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Changi Airport to increase fees for departing passengers

Passengers flying out from Changi Airport from July 1 will have to pay S$47.30 – or S$13.30 more – in departure charges, which includes a new tax levied to fund airport expansion.

The new Airport Development Levy (ADL) – chargeable at S$10.80 for departing passengers & S$3 for transit passengers – will be introduced to help fund airport developments, such as the new Terminal 5 and related infrastructure in Changi East, the Ministry of Transport (MOT) & the Civil Aviation Authority of Singapore (CAAS) announced on Wednesday (Feb 28).

At the same time, Changi Airport Group (CAG) also said it will be increasing aeronautical charges for both passengers and airlines over the next 6 years, to fund the expansion and upgrading projects. The increase in fees – not applicable to transit passengers – will kick in at S$2.50 from July 1, and will go up by S$2.50 every year from April 1 next year to April 1, 2024, for all passengers who start their departures from Changi Airport.

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World's Best Airport 2018

Changi voted as Best Airport but did not do so well in cleanest (#5), airport service (#5), security processing (#6), baggage delivery (#7) & immigration (#8)

Singapore Changi Airport has been named as the World's Best Airport by air travellers for the sixth consecutive  year at the 2018 Skytrax World Airport Awards, held at Passenger Terminal EXPO in Stockholm, Sweden. 

The Skytrax World Airport Awards are voted for by air travellers in the largest, annual global airport customer satisfaction survey. The survey is operated as an independent study, with no entry fees or charges to any airport, and the Awards ceremony is also provided to winning airports at no cost. The use of award logos and related information is free of any charge. 

The 2018 Awards are based on 13.73 million airport survey questionnaires completed by over 100 different nationalities of airline customers during the survey period. The survey operated from August 2017 to February 2018, covering 550 airports worldwide and evaluating traveller experiences across different airport service and product key performance indicators - from check-in, arrivals, transfers, shopping, security and immigration through to departure at the gate. The Survey was available in English, Spanish and Chinese language options.


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