MM Lee: SG needs to restructure airport operations

CHANGI AIRPORT    CAAS    AVIATION HUB

Singapore- The Singapore aviation industry needs to restructure its airport operations to meet current and new challenges, said minister mentor Lee Kwan Yew.

He was speaking at the launch of the new airport entity led by the Civil Aviation Authority of Singapore (CAAS) and the Changi Airport Group (CAG), aimed at strengthening the nation-state's position as a leading global air hub. 

Raymond Lim, minister for Transport and Second Minister for Foreign Affairs said the corporatisation will allow for more focused roles and greater flexibility, thereby enabling the new CAAS and CAG to better meet future challenges.

The new CAAS will focus on regulatory functions such as air traffic services, air services negotiations, safety and customer service, while CAG will focus on managing and running Changi Airport including its emergency services and investments in foreign airports.

Industry experts believe this will prevent a conflict of interest - such as if an incident was to occur at Changi Airport, it will then be investigated by the regulator CAAS. Aviation players based in Changi have also witnessed a difference since the move was announced approximately two years ago, CNA reported.

Changi Airport was recently ranked third in a global airport ranking survey. This is the first time it has slipped from the top two positions since 2001.

The launch of the new CAAS and the CAG is timely as minister mentor Lee Kuan Yew said Changi's competitors are fast catching up.

Lee said, "For the present, the aviation industry is in survival mode, with record-high fuel prices last year and an ongoing global recession. The demand for air travel and services has dropped drastically... [However] we must restructure and strengthen our airport operations and regulatory system. When recovery comes, Singapore's aviation sector must be ready to meet the new challenges.

"Emerging economies in Asia and the Middle-East will lead the next wave of demand for air travel. We have to be ready for this. As airport users become more discerning and demanding, our service excellence and know-how must enhance the Changi experience," said Lee.

Lee also urged full service carriers re-examine their business models and form new alliances or mergers, CNA reported. Meanwhile, Changi Airport and Singapore Airlines (SIA) must not be left behind in the different operating climate, he said.

"It has the advantage of Changi as a brand name to enlarge its international presence. This will give greater flexibility to respond quickly to changes in the industry and in the global business environment. It will also attract and retain top talent to compete with global airport operators."

The government said it would be negotiating the sale of CAG to investment firm Temasek Holdings. 

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