Written Reply to Parliamentary Question on Impact of Recently-Announced Increase in Airport Fees and Charges on Changi’s Competitiveness

Mr Yip Hong Weng asked the Minister for Transport regarding the recent announcement on the increase in Changi Airport charges 

a.     whether the increase will impact the airport’s competitiveness, in view of lower fees charged by neighbouring international airports;

b.     what will be the anticipated effect on attracting airlines to Changi Airport, especially low-cost carriers; 

c.     whether any airlines have indicated plans to relocate or reduce operations due to the increase in fees; and

d.     whether alternative sources of funds for investment in infrastructure projects have been explored.

Reply by Minister for Transport Chee Hong Tat:

1.     The Ministry of Transport and the Civil Aviation Authority of Singapore (CAAS) are committed to safeguarding the Singapore air hub’s competitiveness. This includes ensuring that the Changi Airport operator, the Changi Airport Group (CAG), runs airport operations smoothly, makes the necessary investments to build capacity and capability for the future, and has the financial resources to do so.

2.     CAG’s key revenue sources include airport charges collected from airport users, as well as other revenue streams, such as the rental of office and shop spaces at the airport, amongst others.

3.     The increase in airport charges were needed to ensure that investments could continue to be made to upgrade and maintain Changi Airport to keep it competitive, amidst increasing competition from other air hubs. The increase would also cater for higher operating costs, including manpower costs, to allow wages for airport workers to continue to grow in line with national initiatives such as the Progressive Wage Model, and go towards improving working conditions at the airport for workers.

4.     CAAS assessed the increase by CAG to be reasonable. Based on current ticket prices, the announced increase in passenger fees was estimated to be less than 1% for an economy class ticket for most flights departing from or connecting through Singapore.

5.     CAAS and CAG had consulted key airlines, including low-cost carriers, on the increase in airport charges, and the majority understood the need for the increases.

6.     We will continue to monitor the overall performance and competitiveness of Changi Airport, including Changi’s connectivity, passenger experience, and service levels, to ensure that Changi remains competitive, and continues to provide value to passengers and airlines