Global airline body objects to pre-funding for Changi Airport's future Terminal 5

An aerial view of the eastern part of Singapore, where Changi Terminal 5 will be constructed. PHOTO: ST FILE

SINGAPORE - Governments and airports should not expect users to pre-fund expansion projects, said the chief of a global airline body, when asked about plans by Singapore to likely do this for the future Terminal 5 at Changi Airport.

Speaking to reporters on the sidelines of the Singapore Airshow Aviation Leadership Summit 2018, chief executive officer and director-general of the International Air Transport Association, Mr Alexandre de Juniac, said: "We have mentioned many times that we are not in favour of pre-funding. We have a permanent dialogue with Singapore on this and we will keep reiterating and repeating this."

In January, The Straits Times reported that passengers flying out of Changi may soon have to pay between $10 and $15 extra, as part of a new tax being mooted to help pay for a major airport expansion, involving the building of T5.

Transit passengers could be charged about half the amount.

The tax, which could be imposed from later this year, is expected to be on top of the $34 departure charge ($6 for transit passengers), comprising a passenger service fee, a security tax and a levy collected by the Civil Aviation Authority of Singapore.

Fees for airlines, including parking and landing fees, are expected to increase by about 30 per cent, said sources.

Referring to the report, Mr de Juniac said on Monday: "The airline industry does not support pre-funding to finance advance infrastructure projects."

Even as he applauded Singapore for showing "great foresight" with the expansion plans, there are challenges, he said at the event held at Pan Pacific Singapore hotel.

The authorities here must ensure that T5 users continue to enjoy the high standards that Changi Airport users have come to expect, said Mr de Juniac.

"And we need to get the funding model right to avoid burdening the industry with extra costs," he added.

Said Mr de Juniac: "(Seoul's Incheon Airport) provides great service to airlines and passengers. And it recently expanded runway and terminal capacity to meet growing demand. Importantly, that has been done without raising charges. In fact, Incheon recently extended a discount on airport charges that was introduced two years ago."

Other airports have introduced user charges to support growth plans. In 2016, Hong Kong International Airport, which is building a third runway due to be completed in 2024, started collecting between HK$70 (S$12) and HK$180 a traveller. Also in 2016, airports in Dubai, United Arab Emirates and Doha in Qatar introduced a departure tax for travellers - the equivalent of about $13 - to help fund ongoing expansion projects.

T5 is expected to eventually handle up to 70 million passengers a year - more than terminals 1, 2 and 3 combined - when completed. However, the third runway being built in the same project will be operational before that, in the early 2020s.

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Construction on Changi Airport Terminal 5 has started to get the land ready for the terminal. The mega terminal is expected to be completed in the 2030s and will eventually increase Changi Airport's capacity to 150 million passengers annually.

Terminal 5 will be part of a larger Changi East project, whose total bill is expected to run into tens of billions of dollars.

The Transport Ministry has said the Government will bear a large proportion of total costs for the Changi East project.

Separately, airport operator Changi Airport Group will commit a sizeable portion of its annual profits to the development.

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