Opening Speech by Second Minister Ng Chee Meng on Aviation (Miscellaneous Amendments) Bill Second Reading

1.     Mr Speaker, Sir, I beg to move, “That the Bill be now read a second time.”

Background

2.     Aviation is a cornerstone of Singapore’s economy. It provides many good jobs for our people, and contributes significantly to our GDP. It links Singapore with the rest of the world, facilitating the growth of other parts of our economy, such as trade, investments, services and tourism. As demand for air travel continues to grow, this sector will grow in importance.

3.     The interests of aviation in Singapore are safeguarded by two main Acts:

a.     The Air Navigation Act, which provides for the control and regulation of aviation, so as to maintain, enhance and promote safety and security in civil aviation. It also provides for the implementation of Singapore’s international obligations in civil aviation.

b.     The Civil Aviation Authority of Singapore Act, which governs the Civil Aviation Authority of Singapore (CAAS), and allows it to regulate airport operations and impose economic controls at airports.

4.     The Ministry of Transport proposes to enact the Aviation (Miscellaneous Amendments) Bill to amend the two Acts.

5.     Let me now explain the key provisions in the amendments.

Amending the Air Navigation Act

6.     The first part of the Bill pertains to amendments to the Air Navigation Act (ANA). There are two key objectives:

a.     First, to enable CAAS to implement the provisions relating to the International Civil Aviation Organization (ICAO) Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).

b.     Second, to enable improvements to the aviation safety and security regimes in Singapore.

Implementation of CORSIA

7.     Mr Speaker, CORSIA is a global market-based measure scheme for airlines to off-set their aviation emissions growth with carbon credits. It forms part of ICAO’s collective ‘basket of measures’ for the sector to address international aviation emissions and meet the global aspirational carbon-neutral growth from 2020.

8.     ICAO will put in place the Standards and Recommended Practices for emissions monitoring and reporting from 1 January 2019. As a member of ICAO, Singapore is obliged to comply with the Standards and Recommended Practices by 1 January next year. Accordingly, clause 3 enables CAAS to make regulations so that Singapore can fulfil its obligations.

Enhancement of Aviation Safety and Security

9.     Second, the amendments to the ANA introduce provisions to improve the aviation safety and security regimes in Singapore.

10.    The voluntary reporting of aviation safety information plays an important role in improving an aviation safety regime. It encourages the sharing of safety information not captured by mandatory reporting systems. To enable Singapore to comply with ICAO’s revised Standards and Recommended Practices on the collection, dissemination and protection of safety information, clauses 4 to 8 set out a framework that protects voluntarily reported information on safety matters and limits its use to improving and maintaining aviation safety. This will encourage the reporting of safety issues, and promote the sharing of such information amongst aviation stakeholders.

11.    Clauses 9 and 10 of the Bill pertain to aviation security. They expand the definition of “aviation industry participant” to include consignors. A consignor is one who originates shipments of cargo or mail for export out of Singapore by air. With this inclusion, consignors will be required to meet aviation security requirements for the protection of air cargo and civil aviation from acts of unlawful interference.

12.    Finally, Clause 11 enables the Chief of Defence Force to authorise SAF personnel to exercise powers related to unauthorised unmanned aircraft activities.

Amendment of the Civil Aviation Authority of Singapore Act

13.    Mr Speaker, the second part of the Bill pertains to amendments to the CAAS Act. There are three key objectives:

a.     First, to provide financially for the expansion of Changi Airport and ensure the long term financial sustainability of the aviation system, by allowing additional sources of contributions to the Changi Airport Development Fund (CADF) and setting up a reserve fund;

b.     Second, to further optimise the use of airport capacity, by enabling the establishment of airport capacity management schemes; and

c.     Third, to enhance the security and efficiency of airport operations, by allowing an airport licensee to exercise additional powers for the purpose of enforcing airport by-laws.

Financial Sustainability of the Aviation System

14.    Mr Speaker, I will first touch on the amendments to provide financially for the expansion of Changi Airport, and ensure the long term financial sustainability of our aviation system.

15.    Changi East, with Terminal 5 as the centrepiece, is our bold investment for the future. It will enable Changi Airport to tap on future opportunities and cement our position as a competitive and premier air hub.

16.    The Changi East development is unprecedented in scale and complexity, and is expected to cost tens of billions of dollars. As announced in February, Changi East will be funded through a joint contribution model comprising the Government, the airport operator, who is known as the “airport licensee” in the Bill, and airport users. The Government will pay the majority of the costs, while the airport operator will contribute a substantial portion of its surpluses and reserves. Airport users will contribute through aeronautical charges and a new Airport Development Levy (ADL), which will be applied to air tickets issued on or after 1 July 2018.

a.    Clause 22 provides for the collection of the ADL from all departing passengers from Changi Airport.

b.     Further details on the collection of the ADL will be subsequently promulgated in subsidiary legislation by the Minister for Transport.

17.    The Government had set up the CADF in 2015 to hold funds for major airport developments, and has thus far injected $4 billion into the CADF. Clause 13 of the Bill will allow three additional sources of funds into the CADF. These are annual contributions by the airport licensee, revenue from the ADL, and contributions from CAAS’ surplus.

18.    Besides providing for airport expansion, there is also a need to set aside funds to cater to unexpected situations that affect the aviation industry. CAAS will require the airport licensee to set up a reserve fund and make contributions to the fund out of its annual surpluses. The reserve fund will act as a buffer against significant shocks to the aviation system, such as a downturn in the economy, or a pandemic like SARS that happened in the early 2000s, which may cause a sudden decrease in public confidence in air travel. In such situations, the reserve fund can be tapped on to provide temporary assistance to help the industry to tide through the challenging period.

a.     Accordingly, clause 15 sets out the requirement for the airport licensee to establish, maintain and contribute to a reserve fund.

b.     Clause 14 enables CAAS to apply sanctions on the airport licensee, such as a financial penalty or a suspension of the airport licence, in the event that it fails to set up, maintain or contribute to the reserve fund, or withdraws funds from the fund without CAAS’ approval.

Optimal Use of Airport Capacity

19.    Mr Speaker, I will now explain the second set of amendments, which are to further optimise the use of airport capacity.

20.    Changi Airport is the world’s sixth most busiest international airport in terms of international passenger traffic. Every 90 seconds, one flight takes off or lands in Changi. Each of these flights requires a pre-allocated slot, which is the permission to use airport infrastructure, such as the runway, terminal, apron and gate, at a specific time. The use of slots at Changi Airport is coordinated by the airport’s slots coordinator.

21.    Slot misuse, such as intentional non-adherence or hogging of slots by airlines, impose costs on the airport, airport employees, other airlines and passengers. For example, an airline that intentionally arrives late so that it can operate at its desired timings instead of the allocated slot will disrupt airport resource planning. When this happens, resources that have been allocated to other flights, such as aircraft gate and manpower, will need to be redeployed to accommodate the delayed flight. Slot misuse is thus detrimental to the entire aviation system. As traffic through Changi Airport increases, it is even more imperative that we stamp out slot misuse.

22.    Today, Singapore follows the Worldwide Slot Guidelines, published by the International Air Transport Association (IATA) on recommended practices for slot coordination. However, these guidelines only provide administrative non-financial measures to manage intentional slot misuse by airlines. This may not be commensurate with the impact of the worst cases of slot misuse. Stronger deterrent measures against slot misuse are therefore necessary.

23.    Clause 20 introduces a new airport capacity management scheme that enables stronger deterrent measures against slot misuse.

a.     It contains provisions that enable CAAS to require aircraft operators to comply with the slots allocated to it by the slots coordinator. Details of the airport capacity management scheme will be subsequently promulgated in subsidiary legislation made by CAAS, with the approval of the Minister for Transport.

b.     In the event of non-compliance, the Bill enables the slots coordinator to impose regulatory sanctions and a maximum financial penalty of up to S$100,000.

Enhancement of Security and Efficiency of Airport Operations

24.    Mr Speaker, the final group of amendments aims to enhance the security and resilience of airport operations.

25.    Airports experience high volumes of passenger and cargo flow. Events such as the Terminal 2 fire last year highlight the importance of responding nimbly to incidents at the airport. The airport licensee, Changi Airport Group (CAG) will require greater flexibility and power to better react to and manage airport incidents. We will strengthen CAG’s ability to respond in the following ways.

a.     First, clause 16 enables the airport licensee to prescribe by-laws to prevent injury and damage to aircraft, vehicles and persons using or within the airport, including the use of reasonable force to extinguish and prevent the spread of fire or for protecting life and property.

b.     Second, clause 17 empowers CAAS to authorise employees of the airport licensee to inspect and gather information for the purpose of investigating any offence under the airport by-laws.

c.     Third, clauses 18 and 19 empower the airport licensee to remove or dispose of aircraft, vehicles, articles or things, which may interfere with the operation of an airport. These include abandoned aircraft, or aircraft in a state of disrepair.

Conclusion

26.    Mr Speaker, the aviation sector has done well. Changi Airport is consistently ranked as one of the world’s best airports, and is an icon many Singaporeans are proud of. This Bill ensures that our aviation system remains robust, secure and future-ready.

27.    With that, Mr Speaker, I beg to move.