Travellers flying out of Changi Airport to pay higher charges from Nov 1

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SINGAPORE - Passengers flying out of Changi Airport will have to pay more in airport charges from Nov 1, as international air travel continues to recover from the effects of the Covid-19 pandemic.

Passengers on flights originating from Changi Airport currently pay a departure fee of $52.30, comprising a $35.40 passenger service and security fee collected by Changi Airport Group (CAG), as well as a $6.10 aviation levy and a $10.80 airport development levy collected by the Government.

With the fee hike announced on Thursday, the total departure fee will go up by $6.90 to $59.20 from Nov 1, and subsequently increase by $3 to $62.20 from April 2023 and by another $3 to $65.20 from April 2024.

Passengers whose air tickets are issued before Nov 1 will not pay the higher fees and levies, said the Civil Aviation Authority of Singapore (CAAS) and CAG in a joint statement.

There will be no change to the departure fee for transit passengers, who will continue to pay $9 in airport charges.

Meanwhile, airlines will also have to pay more in aircraft parking and landing fees, CAAS and CAG added.

The statement said the fees and levies charged will fund CAG's operations, the upgrading of terminals and its future development plans.

The charges will also go towards the air hub development and regulatory functions of CAAS - such spending is expected to grow as CAAS works to rebuild Singapore’s position as a global air hub post-pandemic, the statement said.

Work on the upcoming Changi Airport Terminal 5 has restarted after a two-year pause brought on by the pandemic, with the mega-terminal expected to serve 50 million passengers a year when completed in the mid-2030s - more than T1 and T3 put together.

Airport charges at Changi were last revised in 2018.

At that time, CAG said its passenger service and security fee would increase by $2.50 a year until 2024, which meant that the fee should have gone up from $35.40 in 2020 to $37.90 last year and $40.40 earlier this year.

But the authorities held off the planned increases in 2021 and 2022 in view of the pandemic.

From Nov 1, the fee will be raised to the planned $40.40 to cover the higher cost of operations, and increase again thereafter, CAG and CAAS said.

The aviation levy collected by CAAS will be raised for the first time since it was introduced in 2009 as well - from $6.10 now to $8 from Nov 1.

The levy, which applies only to departing passengers with flights originating from Changi Airport, will remain at $8 in 2023 and 2024.

The latest fee hike comes during the same week as the reopening of Changi Airport Terminal 4.

The terminal on Tuesday welcomed its first flights since May 2020, when it was shut due to plummeting air traffic at the start of the pandemic. 

The reopening of T4, which has a handling capacity of 16 million passengers a year, will add to Changi Airport's capacity, as will the reopening of the southern half of Terminal 2 from Oct 11.

This will restore Changi Airport's handling capacity to its pre-pandemic level of 70 million passengers a year.

Passenger traffic at the airport is now averaging 58 per cent of 2019 levels. Flight numbers are slightly higher, at 64 per cent.

Changi Airport is not alone in increasing its fees, after more than two years of international border restrictions ate into the revenues of airports worldwide.

Last year, Schiphol airport in Amsterdam announced plans to increase the fees levied on airlines by 37 per cent over the next three years - a move that drew a sharp rebuke from the International Air Transport Association (Iata). 

The Dutch government plans to more than triple the country’s air passenger tax in January to €28.58 (S$40), up from €7.95 currently.

Mr Philip Goh, regional vice-president for Asia-Pacific at Iata, said the timing of the fee increases at Changi Airport is less than ideal, as any additional costs will negatively impact the financials of airlines.

He noted that the Asia-Pacific airline industry is still in the early stages of recovery from the Covid-19 pandemic, with international passenger demand in the region only at about 36 per cent of 2019 levels as at July this year.

In comparison, other regions have seen demand rebound to more than 70 per cent of 2019 levels.

“Aviation hubs like Singapore must ensure they remain cost-efficient in order to maintain their attractiveness to airline operators,” he added.

“We hope the next regulatory review of these charges in 2024 will keep in mind a need for moderation and improvements when considering any further increase in aviation charges.”

A spokesman for Jetstar Asia said it is disappointing that higher airport taxes are being introduced while airlines are still recovering from the pandemic, and from soaring fuel prices.

“We are committed to ensuring our fares remain affordable but as a low-cost carrier, taxes make up a significant part of our fares. We will work to manage these additional costs to minimise the impact to our customers,” she said.

SIA Group said it will implement all additional levies accordingly, and it aims to mitigate rising costs by improving productivity and operational efficiency, while exercising strict cost discipline.

Mr Mohshin Aziz, director of Pangolin Aviation Recovery Fund, which invests in aviation businesses, said he was surprised by the timing of the fee hike.

“Shouldn’t we wait until the industry fully recovers?” he asked, noting that key markets such as China and Japan have yet to fully reopen their borders.

Mr Shukor Yusof, founder of aviation consultancy Endau Analytics, said it is inevitable that airport charges are hiked.

He added: “There’s a cost to ensure Changi retains its position as one of the world’s best.”

Ms Edlyn Phua, 31, who has plans to travel at the end of the year, said the increase in airport charges is not significant compared with other travel-related expenses, which have also risen in price.

“I can accept the increased levy since it has been nearly three years since I’ve travelled. The bigger consideration for me will be the destination and airfares,” the market research consultant added.

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