SINGAPORE - Changi Airport will soon have to park part of its annual profits into two separate funds, as part of the Government's plans to ensure that there are enough resources to deal with aviation crises and support expansion plans.
Under the proposal which was tabled in Parliament earlier and will be discussed when the House meets on Monday (March 19), Changi Airport Group (CAG) will have to set up and maintain a reserve fund with annual contributions.
This is for the purpose of "mitigating the effects of any condition or event of a significant nature which adversely affects the civil aviation system", said the Transport Ministry in its document.
Industry observers noted that such crises in the past would include the Sars outbreak in 2003 which paralysed the air travel sector and the global financial crisis of end-2008.
Separately, Changi Airport will also have to make annual contributions to the Changi Airport Development Fund (CADF), which was set up in 2015 to support airport expansion projects.
So far, the Government has injected about $4 billion into the kitty.
The proposals come as Singapore embarks on a massive expansion plan that will almost double the size of Changi Airport. This is to ensure adequate capacity, with the demand for air travel in the Asia-Pacific region expected to triple in the next two decades.
The Changi East development plan includes massive infrastructure works, building a third runway and constructing a mega passenger terminal, Terminal 5 (T5), that will eventually be bigger than T1, T2 and T3 combined.
The Government has already announced that from July 1, charges and fees for passengers and airlines at Changi Airport will be increased to help fund the expansion, which is expected to cost tens of billions.