Singapore's Plan as an International Aviation Hub

Asst Prof Tan Kheng Boon Eugene asked the Minister for Transport (a) what is the likely impact of the Qantas-Emirates 10-year alliance on Singapore's plan as an international aviation hub; and (b) what is Singapore's strategic response to improvements in air transport, including the possibility of passenger aircraft being able to cover greater distances and thereby not requiring transit stops in Singapore for refuelling.

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Last month, Qantas and Emirates announced a partnership that will see Qantas' London-bound flights from Sydney and Melbourne routed through Dubai instead of Singapore. At the same time, Qantas was reported to have plans to restructure its Asian network, to re-time its flights from Australia to Singapore to enable more seamless connections to Asian cities, and increase its capacity on those flights.

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The re-routing of flights through Dubai affects about 1% of Changi's total number of flights and up to 2% of Changi's total passenger traffic. We understand that they are made in response to commercial challenges that Qantas is facing in its international operations, which were reported to have incurred an operating loss of A$450 million in the year ending June 2012.

Despite the withdrawal of Qantas' flights to London, Singapore remains well connected to London by British Airways and Singapore Airlines, with SIA having recently started a fourth daily flight between Singapore and London. At the same time, Changi Airport remains an important air hub for Australian travellers, with 10 passenger airlines operating more than 220 weekly services between Singapore and seven points in Australia. We believe that some of these airlines will capitalise on Qantas' partial withdrawal from Changi to gain market share, for example, Australian passengers who may prefer to fly through and stop-over in Singapore en route to London, rather than through Dubai. Changi Airport Group (CAG) will support these efforts. CAG will also work with Qantas on its plans to grow its Asian network through Changi Airport, building on the 90 weekly flights that Qantas currently operates between Singapore and Australia.

The Qantas-Emirates development underscores the rapidly evolving landscape in the aviation sector and the intense competition that Singapore faces as an air hub. It is a timely reminder that we must not take our hub status for granted. The Government is determined to ensure that our air hub maintain the highest level of competitiveness and edge in service, efficiency and connectivity, and, hence, remain a premier hub of choice, not just for travellers from Australia but all over the world.

Indeed, new technology and industry developments shape and disrupt established patterns of air travel, presenting both challenges as well as opportunities. While ultra-long range aircraft allow some traffic to by-pass Singapore and fly non-stop to their destinations, such aircraft can also be used to open non-stop routes that were not previously possible, from Singapore to far away cities, such as in Latin America and North America. Singapore Airlines' ultra-long range flight using the Airbus A340-500 aircraft for non-stop service to New York is one such example.

A key reason for the continued success of the Singapore air hub is connectivity. To encourage airlines (both Singapore and foreign carriers) to grow their operations at and through Singapore, the Government will continue to expand Air Services Agreements with key markets. CAG will also work closely with all airlines to strengthen our Airport's extensive network, and ensure that the passenger experience at Changi remains a key factor differentiating us from our competitors.

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To cement Singapore's future as a leading air hub, the Ministry of Transport also established the multi-agency Changi 2036 Steering Committee earlier this year. Chaired by Minister of State for Finance and Transport, Mrs Josephine Teo, the Committee is driving the holistic planning of Changi's future development, including implementing the civilian use of Runway 3, developing a new passenger Terminal 5, and planning for related infrastructure, facilities and transportation links. These investments will shape and support Changi Airport's long-term growth, and anchor Singapore's continued competitiveness as a global air hub.

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