Changi's challenges

Changi Airport's new incentive package, to encourage airlines to use it as a transfer hub, is an important part of its overall efforts to boost traffic. Rewarding airlines for bringing stopover passengers is a bold new step that reflects the importance of this segment, which accounts for about 30 per cent of the airport's total annual throughput.

While Changi's initiative is directed at carriers in general, Singapore Airlines' long-haul budget arm Scoot and low-cost carrier Tigerair could play a special role in boosting the airport's attractiveness to transfer passengers. This would be in keeping with the contribution of Malaysian long-haul budget carrier AirAsia X's contribution to transit traffic in Kuala Lumpur, for example. Scoot and Tigerair should look into strengthening their partnership and creating new synergies that translate into more transit through Changi. The fortunes of the airport and the airlines are separate but they are related in the great game of aviation being played out around the world.

The larger point for Changi is that geography is not destiny. Being at the heart of South-east Asian air crossroads once helped it to take off. Its efficiency and its capacity to innovate set it apart from the competition, such as it was then. Its advantages remain but they do not compensate automatically for the rise of challengers such as Dubai today and possibly Mumbai tomorrow. It will have to contend with the vagaries of the aviation industry, which is vulnerable to both economic downswings and political conflicts deadly enough to threaten the use of airspace in strategically volatile regions.

In staying ahead of the game, Changi will have to re-examine constantly the fundamentals of its success, what has brought it so far, what its challenges are, and how it intends to learn from its competitors, just as they learnt from it not so long ago.