Source: Channel NewsAsia Author: Ryan Huang 12/23/2009
Subject Concerned: Opinion Airlines Airport
Passenger traffic at Singapore's Changi Airport continues to pick up in November.
The airport handled almost 3.4 million passengers during the month, an increase of 9 per cent year-on-year. This is the strongest pace of growth this year and also the fourth straight month of increase.
And market watchers believe it will not be a problem for Changi to post another month of on-year growth in December.
Much of this growth has been attributed to low cost carriers, which accounted for one out of every five passengers and one of every four flights. Industry watchers said this was largely due to the liberalisation of air services in the region.
Paul Ng, Global Head of Aviation, Stephenson Harwood, said: "The far-sighted management that Changi airport has, in fact, in the beginning part of this year and 2008, started to diversify, open up the airport to airlines which they did not offer landing rights to before. In particular, the very lucrative KL-Singapore routes, and the Jakarta-Singapore routes.
"So you're starting to see the low-cost carriers like AirAsia, Lion Air, and Cebu Pacific is already flying from the Philippines to Singapore.
"But the profitable routes have obviously brought more passengers into the airport and another factor is people who are operating these routes, the low cost carriers have in fact been the most successful in this downturn, in eking out a profit."
However, some analysts believe that the better numbers do not show the full picture of legacy carriers, which they expect to continue to have a tough time.
Prithpal Singh, aviation consultant, said: "What is more important is to find out what is the growth in percentage and actual numbers as a result of this liberalisation which suddenly allows four or five carriers to fly between Singapore and KL and increase in figures.
"I think that is masking the picture of how wonderful this growth is. There is probably about 200 per cent to 300 per cent increase just on the Singapore-KL sector, which has more than likely compensated for the negative growth in most of the other sectors."
Year to date, Changi airport has handled 218,475 flights. That is 3.5 per cent more than the same period in 2008.
Southeast Asian routes have grown the fastest this year and analysts expect this to continue into 2010. As a reflection of this, the airport saw Indonesian airline Batavia Air starting its operations at Terminal 2 this year.
Analysts, however, warned that Changi may see rising competition, with the growth of airports across the region.
Mr Ng said: "One of the factors that Changi Airport will be wary of and watching out for is competition from other airports. Budget airports that have been springing up around the region, in particular LCCT in KL, which operates the largest low cost carrier in Asia - AirAsia - which also flies long haul through its affiliate AirAsia X.
"So there will be quite a lot of competition next year. But I'm relatively confident that the far-sighted management from Changi Airport will be watching the market and adjusting themselves accordingly to take advantage of opportunities that come up.
Analysts said Changi Airport can consider further boosting traffic by expanding landing rights for carriers from Australia and China.