Sunday, December 25, 2011

Singapore: New airport terminal set to be built within this decade

SINGAPORE: Singapore's current Budget Terminal may be shifted to make way for a fourth terminal that analysts say is likely to take place closer to the end of the decade.

That is because once the ASEAN Open Skies agreement is in place by 2015, passenger traffic will likely grow by at least five per cent each year.

Analysts Channel NewsAsia spoke with said with the growth of passenger volume, comes the need for expansion.

Changi Airport's existing three terminals can accommodate about 70 million passengers annually, and passenger traffic this year is likely to exceed last year's 42 million.

Shukor Yusof, and aviation analyst with Standard & Poor's, said: "We still have some capacity with Terminal 3 still not being maximised yet, there's still a lot of room there.

"But beyond that, obviously there is going to be a need to expand the airport with the new terminal, given the increase in low cost travel, even in the expansion of new discount carriers in the region."

Given the economic uncertainties, the remaining capacity is likely to be taken up once the ASEAN Open Skies agreement kicks in, in 2015. The agreement will fully liberalise air travel between the grouping's 10-member states.

Mr Yusof said: "It will vary obviously because we are going into a very difficult period for the next, two, three years at least, because of the problems in Europe, in North America. But that being the case, there is still tremendous growth in this part of the world, and that's going to be increased in our opinion when 2015 Open Skies kicks into place, depending on how quickly countries in the region, in ASEAN react to that.

"The potential for that is huge, it could be anywhere between five to 10 per cent (growth) for some countries or even more than that, depending on how they exploit the possibilities of that happening.

"I think they will have to agree to whether they want to construct a new terminal when open skies kicks in in 2015, and then they will have an idea of how the traffic flow will be, and how the rest of the ASEAN developing as well, that will give them a sense of indication as well, how the market is going to be like.

"Certainly, I think there is no doubt that there will be a need for Terminal 4, beyond this decade. But if they do decide, then the construction will probably begin towards the later part of this decade, which is after 2015."

Gary Ho, senior lecturer of Aviation Management & Services at Temasek Polytechnic, said: "The philosophy at Changi is always build ahead of demand, so if you look at Terminal 3, that's how they built it. Our airport has always been sized, way before the need arises."

In March 2008, the Transport Ministry confirmed that Singapore will have a Terminal 4 at Changi Airport. This was mentioned in Parliament, just two months after the opening of Terminal 3 in January. Since then, authorities have been working on the master plan but little has been revealed about the details.

There have been talks that Terminal 4 is likely to be located on reclaimed land, along Changi Coast Road, near to runway three. But sources tell Channel NewsAsia that the area where the current Budget Terminal is located is another potential site.

Mr Yusof said: "It would be possible for them to do that, but then again, they would have to relocate the low cost terminal somewhere, so they would have to weigh that in their decision. I think anywhere within the boundaries of Changi within the proximity of the three terminals, would be an excellent choice because of the connectivity."

Mr Ho added: "If you look at the location of the current budget terminal, it is very small, you know you are constrained by the SATS Building, the Inflight Catering Centre, and you are also constrained by the golf course, and also some of the ancillary services. If you are going to build Terminal 4 there, you are actually building a terminal that is very constrained."

It is understood that if the Budget Terminal makes way for Terminal 4, all budget carriers will then operate out of Terminals 1 and 2.

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