S'pore plans a second fund to lure airlines to Changi<\/p>\n
Bloomberg, Singapore<\/p>\n
Singapore's government plans to set up a new fund to give
\nairlines financial incentives to route more flights through the
\nisland's Changi Airport, the world's sixth- busiest, Transport
\nMinister Yeo Cheow Tong said.<\/p>\n
The Singapore government, which gave 44 airlines more than
\nS$105 million (US$64.3 million) since 2003 after Asia's SARS
\noutbreak, plans to cut Changi's landing fee and give other
\nincentives to encourage carriers to use the airport, Yeo said,
\nwithout disclosing the size of the proposed fund.<\/p>\n
\"Growing the passenger arrivals is very important because
\nthat's our role as a regional business hub to enhance tourism,\"
\nYeo said at the Asia Pacific & Middle East Aviation and Tourism
\nOutlook conference in Singapore today. \"We need to encourage more
\nairlines to fly here because they bring people.\"<\/p>\n
Tourism receipts make up more than 5 percent of Singapore's
\nS$91 billion economy every year and an increase in tourist
\narrivals last year expanded the economy by 8.1 percent, the
\nfastest annual pace in four years. Changi, Singapore's main
\nairport, handled a record 30.4 million passengers last year, 4.7
\npercent more than in 2002. It also processed a record volume of
\n1.8 million tons of cargo last year, 8.4 percent more than 2003.<\/p>\n
Changi has been trying to increase its traffic by cutting
\nairport fees, letting more companies handle ground services,
\nadding a third terminal, and building a dedicated, lower-cost
\nfacility to attract low-fare carriers. Less than a third of
\npassengers passing through Changi enter Singapore, most of them
\nstopping in the city in transit.<\/p>\n
Qantas Airways Ltd., Garuda Indonesia, Air China, China
\nEastern Airlines Corp., China Southern Airline Co. and Air India
\nare among the airlines that have received disbursements from the
\nfirst fund because their operations in Changi added to the
\nairport's growth, Yeo said.<\/p>\n
\"Because of the overwhelming endorsement from our airline
\npartners, we have decided that when the fund expires at the end
\nof this year, we will replace it with another fund so that we can
\ncontinue to support and facilitate the expansion,\" Yeo said.<\/p>\n
The Dec. 26 earthquake-triggered tsunami will only affect the
\ntravel industry in the short term, Yeo said. He expects air
\ntravel within Asia to continue rising, with China and India as
\nthe main catalysts for growth.<\/p>\n
\"While the recent tsunami tragedy will have some impact on the
\nindustry in the short term, I am confident that air travel within
\nAsia will continue to grow rapidly,\" Yeo said.<\/p>\n
Southeast Asia, home to over 500 million people with a
\ncombined gross domestic product of about $700 billion, will
\nexperience \"strong aviation growth\" partly driven by the
\nemergence of low-fare carriers, Yeo said.<\/p>\n
About 10 low-fare carriers are flying in the region. Singapore
\nis home to three discount carriers -- Valuair Ltd., Tiger Airways
\nPte. and Jetstar Asia.<\/p>\n
Budget carriers accounted for 7 percent of total flights at
\nChangi last year, flying to eight cities from Singapore, such as
\nHong Kong and Thailand's Bangkok, Phuket and Hat Yai.<\/p>\n
Thai AirAsia Co., a budget carrier jointly owned by Thailand's
\nShin Corp. and Malaysia's AirAsia Bhd., also operates in Changi.<\/p>\n
\"The potential for low-cost carriers growth in Asia is
\ntremendous,\" Yeo said, citing China's population of 1.3 billion
\npeople and India's 1 billion.<\/p>\n
Changi is upgrading and expanding its two terminals and
\nbuilding a third terminal to meet rising travel demand. It is
\nalso building a terminal dedicated for low-cost carriers, with
\ncommitment from Singapore-based Tiger Airways to use the
\nfacilities.<\/p>\n
The low-cost terminal will be gradually expanded if any other
\ndiscount carrier uses it, Yeo said. Low-fare carriers will be
\ntreated the same way as full-service airlines, paying the same
\nlanding fees, he said.<\/p>\n
Yeo said that this year, Singapore hopes to exceed the 30.4
\nmillion passenger traffic at Changi and the more than 8 million
\ntourists that visited the island nation.<\/p>\n
Singapore expects its tourist arrivals to rise 6.9 percent in
\n2005 to 8.9 million from last year's record of 8.3 million, the
\nSingapore Tourism Board said. The government agency also said it
\nexpects tourism revenue to rise 8.3 percent to S$10.4 billion
\nthis year.<\/p>",
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