Mr Liew Mun Leong, Chairman of Changi Airport Group,
Distinguished Guests,
Ladies and Gentlemen.
A very good evening to you all. It gives me great pleasure to be here tonight at the Changi Airline Awards 2010. This annual event, which is into its fifth year, celebrates and recognises the growth of ChangiAirport’s airline partners and their successful partnership with Changi Airport. Indeed it has been the strong partnership between Changi and the airlines that has further strengthened the recovery that we have witnessed for the sector.
The Year Post-Corporatisation
2 Tonight’s event holds a special meaning as it takes place a year after the Changi Airport Group (CAG) was formed on 1 July 2009. This time last year, the newly corporatised CAG took on the role of managing Changi Airport during one of the most trying periods in the history of civil aviation. For most of 2009, the industry struggled against the effects of a deep global economic recession and the H1N1 flu outbreak. IATA estimated that the industry had lost approximately three years of growth in 2009[1]. Changi was not spared from the brunt of these effects either, with a year-on-year decline of around 10% in passenger traffic and 20% in cargo traffic between February and May last year.
3 Despite the challenging environment, CAG introduced several initiatives to help its partners – the airlines, the cargo agents and retail concessionaires - weather the storm. It provided special landing and rental cost relief measures, and initiated joint marketing campaigns with airlines to uphold traffic to and through Singapore. Promotional activities were also organised to help boost business for airport concessionaires. Through the collective efforts of CAG and its various partners, Changi ended the year with 37.2 million passengers, a mere half a percent drop compared to 2008. For the first time, Changi’s network grew to 200 city links and almost 5,000 weekly flights. During this difficult time, most of the airlines and airport concessionaires have also maintained their presence at Changi Airport. This is indeed a commendable performance.
Positive Outlook for 2010
4 While Changi’s journey to recovery this year was briefly interrupted by the volcanic ash cloud that blanketed much of Europe in April, the signs ahead appear promising. IATA’s latest forecasts project that airlines worldwide would generate a US$2.5 billion profit in 2010, returning to the black for the first time in three years[2]. Back here in Singapore, the first 5 months of 2010 saw passenger traffic in Changi grow 16.7% year-on-year while airfreight registered a 17.3% increase over the same period last year.
5 At the forefront of this recovery is the Asia-Pacific region. For Changi, South East Asia has been a key engine of growth in the past twelve months. For instance, the region delivered several new city links such as Pontianak, Hat Yai and Kuantan. New regional airlines such as Malaysia’s Firefly, and Indonesia’s Batavia Air and Mandala Airlines also commenced operations at Changi. In terms of passenger traffic, regional routes were the top performers, with the Singapore-Jakarta and Singapore-Malaysia sectors showing impressive year-on-year growth of more than 20%.
6 However, growth for Changi is not limited to South East Asia. Traffic to China and India is expected to continue its strong growth, supported by a robust economic environment and strong ties between our countries.Over the past year, Changi has expanded its network to China with three new city links: Jinan, Shantou and Qingdao. For the Indian sector, Mumbai, Bangalore and Hyderabad saw frequency increases. Changi Airport also welcomed India’s Kingfisher Airlines as a new airline partner.
7 Full Service Carriers have seen robust recovery in recent months and their growth is expected to continue as airline yields hold up. According to CAG’s analysis, the prospects for long-haul services out of Changi are also positive. Singapore Airlines plans to increase the frequency of its Munich-Manchester services in September and, alongside Japan Airlines and All Nippon Airways, would commence new services to Tokyo's Haneda Airport in October.
8 The Low Cost Carriers (LCCs) have also contributed significantly to Changi’s traffic growth. Since 2008, the numbers of passengers carried by LCCs and the flights offered have increased by more than 50%. One in every five passengers travelling through Changi now is carried by LCCs.
9 Changi’s growth will also benefit from a strong country factor, and on this front, Singapore’s recent tourism developments have strengthened our position as a popular destination for leisure and business travellers alike. The opening of new attractions in Singapore, such as Resorts World Sentosa and Marina Bay Sands, will further boost Changi’s traffic. Looking ahead, the pipeline of new tourism attractions such as Gardens by the Bay and the Mandai River Safari will enhance Singapore’s value proposition as a premier tourism destination and benefit our air hub status.
10 Besides the passenger sector, the air cargo sector is looking up as well. Regional cargo airlines, such as Cardig Air and Transmile, have started scheduled services to Changi last year to tap on the airport's strong connectivity to global markets. Changi is also developing its capabilities to target and grow new cargo segments. For instance, the new Coolport@Changi by Singapore Airport Terminal Services Limited – Singapore's first air freight terminal dedicated to perishables cargo handling, will position Changi as an efficient and reliable hub for perishables trade in Asia. Another example is the Singapore Freeport, an ultra-high secure storage facility at Changi Airport, and the first of its kind in Asia, will provide international fine art collectors, auction houses and financial institutions a secure location to store and trade valuable assets and collections. These two projects, when open in Singapore later this year, will create new value-added services and market opportunities for airlines at Changi to capture new trade flows in Asia Pacific.
Continuing Partnership for Success
11 Changi’s resilience in economic storms and trajectory of robust recovery are cause for celebration. But all this did not happen by chance. Instead, Changi’s success is built on the sound fundamentals of close cooperation between the airlines, airport and government. Apart from the tight working relations between CAG and its airline partners, the close ties between CAG and the Civil Aviation Authority of Singapore, as well as other government stakeholders are just as important. The government will always be supportive of Changi and play a facilitative role to ensure its growth. The strength of this tripartite partnership has been a key contributor to Singapore’s position as a major competitive air hub. This also explains why “Changi” as a name has always been synonymous with the entire eco-system of stakeholders including airlines, ground handlers, businesses, and government agencies co-creating a shared success story. We therefore need to build on this common destiny to ensure that we continue to prevail in the face of increasing competition from other airports.
12 Looking ahead, there are some dark clouds and it is not all clear skies yet. The European sovereign debt crisis and the geopolitical situation in the Asia region are just some of the ongoing developments that have the potential to derail the sector’s recovery. Just as the strong partnership forged between the airlines, airport and government enabled the airport community to emerge stronger from last year’s recession, I am convinced that this same partnership will put us in good stead to overcome any challenges we may face this year.
Conclusion
13 On this note, I would like to encourage the Changi family to continue to work in close partnership, so as to capitalise on the market recovery and grow your businesses together. Let me conclude by congratulating this year’s recipients of the Changi Airline Awards. I wish all of you a pleasant and enjoyable evening.
[1] IATA Press Release “2009: Worst Demand Decline in History - Encouraging Year-end Improvements”, 27 Jan 2010.
[2] IATA Press Release “Air Travel Rebounded in May - Above Pre-Recession Levels”, 29 Jun 2010
