THE fight to be the premier air hub is tough and Singapore's aviation sector must capitalise on new opportunities and growth areas to stay ahead of rivals.

Calling on key players, including the newly-corporatised Changi Airport Group and Singapore Airlines to rise to the challenge, was Minster Mentor Lee Kuan Yew, one of the key architects of Singapore's aviation strategy and Changi airport's development.

He said on Wednesday that while the global economic downturn was hurting the industry, recovery will come, and when it does, Singapore's aviation sector must be ready to meet the new challenges.

He was speaking at the launch of the Changi Airport Group - to be owned by Temasek Holdings and which will run the airport - and the new Civil Aviation Authority of Singapore (CAAS), which will regulate the industry, including setting service standards and parameters for airport charges.

Plans to create the two new entities were announced two years ago.

The hope is that as a corporate entity, Changi Airport will have more flexibility to innovate, be nimble and responsive enough to changing industry conditions, as well as to new competitive challenges.

Speaking at the launch ceremony at Changi Airport's Terminal 3, Mr Lee said Singapore must restructure and strengthen its airport operations and regulatory system.

He also noted that emerging economies in Asia and the Middle East will lead the next wave of demand for air travel.

'We have to be ready for this. As airport users become more discerning and demanding, our service excellence and know-how must enhance the Changi Experience,' he said.

While Changi had done well the last three decades, setting the benchmark for service excellence and operational efficiency internationally, he said past achievements did not guarantee continued success.

Read the full report in Thursday's edition of The Straits Times.