Corporatised airport still soaring high

Travellers at Changi Airport Terminal 1.
Travellers at Changi Airport Terminal 1. ST PHOTO: MARK CHEONG

Six years after Changi Airport went from government to corporate entity, fears that it would lead to a focus on profits at the expense of service standards have proven unfounded, said the airport's chairman.

Passenger traffic grew strongly by 47 per cent during this time, despite a recent slowdown he is confident will pass, said Mr Liew Mun Leong, chairman of Changi Airport Group (CAG).

Since July 1, 2009, when CAG was created after the Civil Aviation Authority of Singapore was split into two, Changi has won about 150 best airport awards.

The strong numbers have come even as the airport remains financially viable, Mr Liew told The Straits Times. He said: "I think everybody would agree that our retail is very successful."

 

In the 12 months to the end of March last year, Changi's profits hit almost $900 million, a 19 per cent jump from the year before that. Mr Liew said: "The money is used to finance and reinvest in our infrastructure; in T4, in Jewel, in the T1 expansion, in Changi East."

T4, being built where the former Budget Terminal was located, and Jewel - a $1.7 billion retail-cum-airport structure coming up in front of T1, where an open-air carpark now sits - will open by 2018.

Mr Liew credited a strong team at CAG, led by chief executive officer Lee Seow Hiang who was principal private secretary to the late founding Prime Minister Lee Kuan Yew before he joined the airport, for Changi's success so far.

When the Government announced the decision to corporatise, the rationale was to give the airport more flexibility to innovate, to be responsive and to be nimble to changing industry conditions and new competitive challenges.

 

For example, Changi could decide on overseas investments and acquisitions, without having to consult the Transport Ministry, and also pay staff better as rival airports were poaching talent.

But not everyone was convinced, Mr Liew said.

Apart from fears that service levels would slip, civil servants were concerned about job security.

He said: "I had to convince and knock some heads."

Six years on, the concerns are allayed. What still remains to be settled is the airport's ownership, which was to have been transferred from the Ministry of Finance to investment firm Temasek Holdings. This has not happened due to uncertainty over how future airport expansion and other projects would be funded.

Mr Liew said: "My personal view is that it's always better to have a commercial body manage a commercial body... The Government's role is to govern."

When will this happen?

"I can't read politicians' minds. I'm only chairman of the board," Mr Liew said.

Karamjit Kaur

A version of this article appeared in the print edition of The Straits Times on July 01, 2015, with the headline 'Corporatised airport still soaring high'. Print Edition | Subscribe