Changi Airport hosts more than 80 international airlines flying to more than 190 cities in 60 countries, handles more than 4,500 arrivals and departures weekly and over 37 million passengers a year.
Regularly voted Best Airport in the World, it is now operated by Changi Airport Group which was formed on July 1 2009 as a result of the corporatisation of Singapore Changi Airport. Through Changi Airports International, a fully-owned subsidiary, it also is actively looking for management opportunities worldwide.
Foo Sek Min, Executive vice-president of airport management at Singapore Changi talks about the challenges facing the airport
The new Terminal 3 which opened last year is not dedicated to the national carrier, Singapore Airlines. Why?
We planned the airport in such a way that every airline would be able to grow. If we had dedicated one terminal to one airline, there would be periods when capacity is not used efficiently. When we had only Terminal 1 and Terminal 2, Singapore Airlines (SIA) was never the sole occupier of Terminal 2, there were others operating from there, so it's not a change of policy or philosophy. Capacity is a perishable good, and if you don't make the most of off-peak capacity, it's a waste of capacity. T1 has 21m passengers, T2 has 23m passengers and T3 we have 22m, and there are around 30 gates for each one, so no one terminal can cater for a single airline, either now or the future. During the peak period there are 40 or 45 SIA aircraft on the ground, so no one terminal would be sufficient, which is the case of BA in Terminal 5 at Heathrow.
How busy is the airport?
We have two runways and do 45 peak movements per hour, and we can take over 70 per hour. We have a lot of wide body aircraft moving here so you don't see the same amount of movements as you would in Europe. In the budget terminal, traffic is growing quickly. The capacity is 7m and we had 2.3m this year.
How do you maintain your competitiveness when other hub airports quote a minimum connection time (MCT) lower than yours?
European airports may quote 35 or 40 minutes, but as a regular traveller, I would never go for such a short MCT. Sometimes there are inevitable delays: airspace, weather, congestion on the ground, so it puts a stress on the system. For long haul traffic we don't see that 10 minutes (difference) as that crucial. Only small group of people look at making such tight connections. For MCTs the constraint typically is the baggage. For through-check it is not a problem - we have a RFID system which brings the baggage between the two terminals through an underground tunnel which allows us to meet the MCT which is 60 minutes. If airlines want to sell below the MCT of 60 minutes, they have to put additional effort into achieving it to ensure that the baggage will make the flight.
What factors do you think play a part when passengers are choosing an airport to use as a hub?
It depends on the traveller. Leisure passengers are not particularly concerned about connecting time, they look at a multitude of factors. Air fares drive their decision but they also want to have some things to do while they are waiting for their connecting flights. In the case of business travellers, many of them don't make their bookings, so it's really about the overall facilities as well as connectivity, the frequency of flights, punctuality and reliability, and the ability to continue to work while they are waiting for the flights. At Changi not only in the business lounge but in the general lounges people are using our internet facilities. You have business travellers who are travelling business class and ones travelling in economy class and they want to continue being productive.
How have you been effected by the rise of the Middle East carriers?
Competition is not new. Before the Middle East carriers there were already other hubs in this region and SIA faces competition from all those carriers, so it has to continue to improve its product, keep its customers and win new ones. Of course the Middle East carriers are carrying traffic, so you also need to look for new markets.
And the low cost carriers (LCC) are on answer to that?
Yes. Australians and Europeans come in on long haul and then pick up their bags and then go onto the low cost terminal we have here. It is seven and a half minutes by a free bus, a regular 15-minute shuttle. A lot of the traffic is people making their own connections on the LCC network. In the LCC terminal at present there is Tiger Airways, Cebu Pacific and Firefly, the Malaysia Carrier, which is full service but it operates there because he doesn't need air bridges for the turbo prop aircraft. The passengers pay a lower PSE because there are lower check-in counter costs, lower office rentals. They don't pay for air bridges. Some airlines such as Air Asia continue to operate out of T1 because they want a superior product for marketing to their customers.
What improvements are being made to the airport?
Well we opened T3 last year and in 2006 we completed a S$240m refurbishment in T1. We want similar levels of service in all three terminals.
You also have management projects elsewhere?
We have a 100%-owned subsidiary - Changi Airports International (CAI) which carries out this work, and we have helped in the past on projects such as Abu Dhabi airport for an 18-month period, finishing last year. But being a new company we are reviewing what we have done in the past, so we are still considering what we should be doing and where. There is a demand to get Changi involved, but it has to be something that the other countries and airports are comfortable with and makes commercial sense. We currently have a six year contact in Saudi Arabia Damon - six people there, helping them to grow the market there and improve the product. We had one in Abu Dhabi 2007-2008.
Do you think the corporatisation of Changi Airport Group will bring more pressure to bear on you, in terms of raising revenue, for instance?
We try and balance the commercial needs and we need to remember that the primary function for anyone coming to the airport is to catch a flight. It's about looking at the hierarchy of needs. We need to get people to clear all the stressful processes of security, immigration and so on before they can spend some money at our shops. We get constant feedback through discussions, forums and committees, and typically we go to the fundamentals: are we compromising the satisfaction of our customers for these commercial reasons? Can we still achieve the same commercial results without compromising the ease of use of the airport? I think we have done pretty well.
You could put up charges or start charging for things that are currently free.
You can recover costs through additional charges, but it can be very crude. You can charge for using a trolley, for instance, and some airports do, but passengers expect it, most people use it and so I don't think there should be an additional charge for it - it ought to be covered in the passenger service charge. And everyone wants to use the internet, so we might as well give it for free. There's a cost to us, but we have to recover that through other channels. There's no finesse in charging for two or five dollars for this and that so every few minutes you have to take out your wallet.
Yet the Passenger Service Charge has risen?
Well the previous time we had increased it was 1994 when it went up to S$15 and then in 2008 when it rose to S$20 and the Passenger Security Service Charge (PSSC) went up to S$8, from S$6. It certainly won't go up for another couple of years.
What makes Changi successful?
Well other than the factors we have spoken about, I think it's that the airport is well run. We have the same challenges as other airports. For instance, fewer than 50 of my direct staff are involved in customer-facing jobs, out of a total of 6,700 customer-facing front line staff, so it's a challenge ensuring passengers have consistent levels of service. But we like to think of ourselves as the conductor of an orchestra and our job is to make sure that everyone plays well.
For a tour of T3, visit our sister site www.businesstraveller.com [2]