Beyond Terminal 4, still ways for Singapore to soar as aviation hub

SINGAPORE: By 2035, the Asia-Pacific region is set to account for over three billion air passengers per year, boosted by Asia’s rising middle class.

It would be a boon to Singapore, which has cemented its position as one of the world’s leading aviation hubs.

Changi Airport has won the accolade of World’s Best Airport for a fifth year running but competition is growing.

According to the CAPA Centre for Aviation, about US$1 trillion is expected to be spent on new airports and upgrades worldwide, even as regional airports expand and upgrade their infrastructure to meet this growth.

The passenger check-in area at Changi Airport Terminal 4. (Photo: Kenneth Lim)

Still, experts say there are several reasons why Changi Airport could maintain its lofty position.

“Airports have to be safe, airports have to be cost-efficient in terms of airlines who want to land here, compared to the cost elsewhere,” says Dr Tan Khee Giap, co-director of the Asia Competitiveness Institute, a Harvard University Institute for Strategy and Competitiveness affiliated think-thank.

“And airports – you have to give people a very good experience. These are three important attributes that we have, and not many airports can duplicate that.”

The new US$S1.3 billion, two-storey Terminal Four is the latest jewel in Changi Airport’s crown. In 2016, Changi Airport handled a record 58.7 million passengers – about eight per cent more than the year before. With a capacity of about 16 million passengers, T4 will bring the airport’s overall annual capacity to 82 million passengers.

“It opens up another level of volume that this region can take,” said Mr Graham Pickett, Deloitte UK’s global head of aviation and travel.

“We really want to build our capacity ahead of demand and in fact that’s Changi’s planning principle,” said T4 programme management vice president Poh Li San.

Automation is also touted as one of T4’s major breakthroughs in upping Changi Airport’s productivity game, with the airport introducing new technology in the baggage handling, security, retail, and housekeeping sectors – which employ 80 per cent of all staff.

In particular, T4’s fully automated departure system, equipped with facial recognition technology, is set to save about 20 per cent of manpower, CAG said. It also means travellers could possibly go through immigration without needing to meet a security or immigration officer.

An automated check-in kiosk at Changi Airport Terminal 4. (Photo: Kenneth Lim)

The idea could be unsettling to some, Mr Pickett acknowledged. “There will be ‘What’s going on here? Isn’t there someone guarding my future?”

But he indicated that travellers could feel assured as there is “significant technology in the screening and monitoring of passengers”. “So there is good stuff – but there is a bit of communication the industry needs to do here,” he said.

In response, Ms Poh said the airport would not “let loose of these stringent standards that we have to maintain, particularly in this environment.”

“I think the technology is actually more robust, and more consistent and stringent than human beings carrying out security checks,” she added.

Beyond the present – T4 is also a harbinger of greater things to come. On the horizon is Terminal 5 – larger in capacity than the first three terminals combined. T5 is expected to serve 150 million passenger flights, more than double the current capacity – a crucial asset in helping Changi capture passenger growth.

“So we need to use T4 as a good test bed, so that when we plan for T5 we’re very confident about these new technology, this new concept of operations, and we can apply them when we design T5,” said Ms Poh.

Dr Tan, whose research includes long-term economic policy and development, says the significance of the completed Terminal 5 to Singapore’s economy cannot be understated.

“Terminals 1, 2, 3, 4, 5 are going to be coordinated,” Dr Tan said. “Terminal 5, together with our sea port – the total impact of our aviation hub and our maritime hub – will contribute to not less than 30 per cent of Singapore GDP in terms of total impact, and just the airport alone – I think we can look at 10 per cent of our GDP.

Dr Tan said it is key to look not just at the direct economic impact of Changi Airport, but indirect and induced impact as well. That means going beyond duty free shopping sales, or jobs created within the terminals – to looking at the passengers “who come through the airport, stay in hotels, dine in restaurants, or shop at Orchard Road”.

“You may not see so directly, but Changi Airport is a very important instrument in raising the level of services for Singapore,” he said. Our hotels, our restaurants should do much better. So we have to now think very carefully, that putting investments in Changi Airport is about putting investments to improve the resiliency of the Singapore economy.”

He added that while all previous terminals contributed to economic growth, T4 and T5 give Singapore a “critical mass to accelerate the upgrading of our services, upgrading of our economy.”

But to reach this potential, Dr Tan said a bird’s eye view is needed.

“We have to think beyond Changi Airport as a transportation hub,” he said. “It must be the mother of all hubs – to complement our other hubs such as financial, telecommunications, education, tourism, medical.”

For example, the airport must be linked to Singapore’s status as a financial centre, he said. The country overtook Hong Kong as the third most competitive financial centre in the world after London and New York this year.

“Therefore Changi Airport is so critical. Bankers need direct accessibility with frequent flights scheduled in and out of Singapore,” he said.

The departure hall at Changi Airport Terminal 4. (Photo: Kenneth Lim)

One of Terminal 4’s highlights is a Peranakan-themed heritage zone, with the aim of providing a snapshot of Singapore’s arts and culture to transit passengers. Dr Tan and other experts said it’s crucial to position Changi not just as a gateway to the rest of ASEAN, but also as a window into the city-state.

“We have to make Singapore Changi Airport into a multi-cultural, multi-experience of what Singapore is all about, he said. “Not just an airport but a way of life for people who want to see Singapore.”

SIA, Changi Airport Group, and the Singapore Tourism Board have announced an investment of about S$34 million to make Singapore more attractive to visitors. Another step towards this is the upcoming S$1.7 billion Project Jewel – a mixed-use development near Terminal 1 set to open in 2019.

“If you look at the whole aspect of the leisure experience for example, and people coming to a location to enjoy something a bit different – the whole concept of an airport city is something new to this world, and it’s great to see that being grasped by Singapore,” Mr Pickett said.

But to really fulfil Changi’s potential, Dr Tan said a break from “conventional, conservative fiscal policies” is needed, citing how Singapore’s infrastructure has been traditionally built mostly based on demand.

“If you look at our HDB, our MRT, we always are very cautious, conservative in terms of the capacity,” he said. “At one time, for our MRT, we said ‘You must have break-even of passenger load before you build or can even use the MRT station.’ And for HDB – ‘We must have 70 per cent booking before we can build’. Then we found that failure to anticipate demand caused stress in terms of the demand for HDB and the congestion on the MRT.”

Acknowledging that the authorities have since “made a U-turn” to anticipate demand – he added that “we cannot be penny wise, pound foolish by being too conservative.”

“We have to compete,” he said. “Because an aviation hub, unlike MRT and public housing, which you compete domestically, aviation hub you have to compete globally. Not just regionally, but globally. Therefore we have to take the best airports in the world – take them on. And see how we can be ahead of them. And that needs remarkable planning, continuity of policy, and maintaining this efficiency.”


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