SINGAPORE (REUTERS) - Qantas Airways' budget arm Jetstar said Singapore's move to raise passenger fees at its Changi Airport will compel the carrier to "shift flights around" to cope with changes in demand and may impact the city-state's status as an aviation hub.
The Civil Aviation Authority of Singapore (CAAS) said earlier this week it would introduce a new airport development levy effective July 1 of S$10.80 ($8.17) for passengers who begin their trips from Changi and S$3.00 for those transiting.
Changi Airport is also raising its passenger service and security fee, currently at S$27.90, by S$2.50 from July 2018. The fees will also be increased by S$2.50 annually over the next six years from April 2019. The measures are to help fund the city-state's airport expansion plans, which include a fifth terminal that is to be completed around 2030.
Jetstar's CEO Gareth Evans said on Friday (March 2) the additional fees would lead to an average increase of 15-20 per cent on the fares the company sells in this market.
"We are going to have to shift flights around'coz demand will change," Evans told Reuters on the sidelines of the CAPA Global LCC Summit in Singapore.
"Singapore is competing with Hong Kong, China and Middle Eastern hubs. People will change hubs to fly to Europe, for a few dollars," he said. Qantas is due to move its hub to Singapore from Dubai at the end of this month.
Changi, which is the world's sixth busiest airport for international traffic, saw a record 62.2 million passengers in 2017.