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Singapore firmly focuses on developing aviation industry: Minister

SINGAPORE is taking steps to sustain growth of its aviation hub, including plans for development of new air terminals and a third runway to double Changi's capacity by 2025, said Transport Minister Lui Tuck Yew.

Air cargo volumes at the airport grew by just 0.6 per cent in the first half of the year, and growth over the next few months is expected to be challenging", he said.

Passenger traffic growth slowed to 1.4 per cent from January to June largely because fewer people visited Thailand owing to political unrest, and nervousness following the disappearance of Malaysia Airline's flight MH370.

Speaking to an aviation community reception at Chijmes Hall Mr Lui said: "There is evidence of excess capacity and some airlines have started to cancel or defer aircraft orders.

"This affects everyone. Our ground handlers and businesses at the airport are very sensitive to passenger numbers," he said.

"Further down the road, our aerospace sector will also be affected by reduced MRO demand caused by the fleet cutbacks.

Mr Lui said the aviation community must promote productivity aggressively. The Airport Productivity Steering Committee, led by the Civil Aviation Authority of Singapore (CAAS), has set annual productivity improvement targets at three to four per cent.

"This is about twice the national target and demonstrates the ambition of the airport community in trying to address the challenges of a limited manpower environment," he said.

On a brighter note, Mr Lui highlighted key projects contributing to the aviation industry, including the Seletar Aerospace Park, which he said saw a strong take-up in its first two phases.

Developmental works for phase three are now underway, and this will double the industrial land available when completed.

CAAS will be introducing an Airport Productivity Package, worth S$100 million (US$80.59 million) over the next four years.

The package includes a S$20 million funding programme for the adoption of new airport equipment and S$17 million for two "aviation challenges" to develop innovative solutions to ensure the long-term sustainability of the Singapore aviation ecosystem.

Last month, the Changi Airport Group (CAG) announced a S$100 million Growth and Assistance Incentive programme to help the airport community with their costs.

To provide further relief to the community, CAAS will also be absorbing S$50 million of air navigation services charges over two financial years, commencing from this financial year.

"All-in, the aviation community will see cost relief of about S$150 million over the next two years, and this is not counting the S$100 million from the Airport Productivity Package," the minister said.