Singapore Mulls Building New Terminal For Budget Airlines
Dow Jones - Singapore is considering building a new airport terminal catered specifically to low-cost airlines, the transport minister said Wednesday, a clear sign of the government's intent to adapt to a changing aviation industry.
The Civil Aviation Authority of Singapore, the republic's airport operator, has been studying the idea of building a separate terminal with less of the frills currently available at the existing international gateway, Changi Airport, Minister for Transport, Yeo Cheow Tong said in a speech.
The budget airline model, although new in Southeast Asia, has been fast gaining popularity in the region.
Most recently, national carrier Singapore Airlines Ltd. (S55.SG) announced it would start a low-cost airline called Tiger Airways. SIA and its parent, Temasek Holdings Pte. Ltd., the Singapore government's investment arm, will own a majority stake in the new airline. The family that owns Dublin-based Ryanair will also be a shareholder, along with Indigo Partners LLC, a U.S. investment company.
Tiger Airways will join the growing list of similar low-cost carriers such as Malaysia's AirAsia Sdn. Bhd. (AIA.YY) and Virgin Blue in Australia.
But some of these airlines, like AirAsia, have expressed concerns that the high fees they incur if they operate out of Changi would limit their efforts to offer low-cost fares.
The idea of building a new terminal for low-cost carriers is probably aimed at alleviating some of these concerns, as budget carriers already usually operate from secondary airports to save costs.
"Although it will be physically located at Changi, and be equally efficient and clean, it will be quite a different concept from the current terminals in Changi Airport in terms of its physical attributes," Yeo said.
The new terminal, if it is built, will look more like a bus terminal than an airport terminal, Yeo added.
Yeo also said CAAS needs to be "nimble" and adapt to the development and growth of the low-cost carrier market in order for Singapore to retain its status as an "air hub."
"This new form of air travel will, therefore, require not only a change in mindset on the part of the CAAS, but also the traveling public who have long experienced the high standards of Changi Airport," he said.