Changi airport to offer airlines perks to boost transfer traffic

The new incentive is part of a $100 million plan to boost traffic and help carriers cut costs.
The new incentive is part of a $100 million plan to boost traffic and help carriers cut costs. ST FILE PHOTO

For the first time, airlines will be rewarded for bringing stop-over passengers to Changi Airport.

A new incentive package is being rolled out to encourage carriers to use Changi as a transfer hub, a spokesman for Changi Airport Group has told The Straits Times. Transfer traffic is "an important component" of the airport's success as a major air hub, he added.

Transfer passengers now make up about 30 per cent of the airport's total annual throughput. Details are being finalised, he said.

The new incentive, part of a recently announced $100 million plan to boost traffic and help carriers cut costs, will complement existing programmes to grow transfer traffic, Changi said.

These include a tie-up with Singapore Airlines (SIA) and SilkAir, for example, under which passengers who choose to break their journeys here receive a shopping and dining voucher of up to $40.

Australia, Europe, India and China are among the key target markets for this voucher scheme.

The move to boost Singapore's air hub status comes amid a decline in total traffic due in part to a slowdown in the budget travel sector, which has driven much of the growth at the airport in the last decade.

Changi also faces increasing competition from airports in Kuala Lumpur, Hong Kong, South Korea and Dubai, among others, which have equally ambitious plans.

Changi will have to work hard to contain rivals, said the Centre for Asia Pacific Aviation (Capa), a Sydney-based think-tank.

Kuala Lumpur International Airport is growing fast, on the back of AirAsia's expansion.

Indonesia's Lion Air, which has ordered hundreds of planes in recent years, has big plans to develop the airport in Batam island as its hub. In comparison, Singapore's two low-cost carriers, Tigerair and Jetstar Asia, are holding back expansion because of poor business returns.

In a recent report, Capa said that just as Malaysian long-haul budget carrier AirAsia X has been driving transit traffic through Kuala Lumpur onto other Air-Asia Group flights, SIA's long-haul budget arm Scoot and Tigerair could do the same for Changi.

The centre noted, however, that while Scoot and Tigerair - about 40 per cent owned by SIA - already offer joint itineraries, the partnership between the two budget airlines has not been able to significantly boost Changi's transfer traffic.

Changi Airport's new plan to grow transfer traffic may help, industry analysts said.

SIA spokesman Nicholas Ionides said: "We welcome initiatives that help boost Changi's competitiveness as a major hub, and look forward to receiving details of the incentive package from Changi Airport Group."

Dubai's Emirates, which has flights from Australia to its home base that stop in Singapore, values Changi's efforts to support partner carriers, said the airline's Singapore and Brunei country manager, Mr Andrew Bunn.

"Singapore is an important hub to our growing global network, with a high volume of business and leisure travel between Singapore and Dubai and onwards to South-east Asia, Australia and Europe," he said.

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