Changi to cut costs for airlines

Changi Airport Group announced, Thursday, a wide-ranging programme that will cuts costs for airlines and should strengthen the airport’s hub status regionally.
The programme of incentives is a response to declines in traffic at Changi in February and March.
The trend was blamed on a stronger Singapore currency versus key travel markets such as India and Indonesia, Lower demand for Southeast Asia travel in China and political unrest in Thailand has also dampened airline traffic from key markets.
CAG is committing S$100 million through various initiatives to lower costs for airlines, boost passenger traffic and improve operational efficiency at Changi Airport.
From 1 July to 30 June 2015, all airlines operating at Changi Airport will enjoy an across-the-board cut in operating costs including rebates of 50% on aircraft parking fees and 15% on aerobridge fees.
In addition, CAG will introduce a new package, which will reward airlines for expanding transfer traffic at Changi Airport.
CAG says it is keen to work with airlines to raise efficiency of terminal operations and will provide funding support where appropriate.
For example, airlines are encouraged to join the FAST@Changi initiative , which covers a range of self-service options for departing passengers.
To stimulate traffic demand, CAG will invest in destination marketing campaigns to promote Singapore in major source markets like Australia, China, India, Indonesia and Russia.
CAG will work with the Singapore Tourism Board as well as travel partners in these markets to increase the awareness of Singapore and spur travel demand from these countries. These efforts will also support the development of new city links to Singapore.
While passenger traffic at Changi Airport has grown following the global financial crisis in 2008/09, a number of market factors – some specific to the region – contributed to traffic at Changi registering year-on-year declines in February and March this year.
Currency movements have seen the rise of a much stronger Singapore Dollar versus key travel markets such as India and Indonesia, affecting inbound tourist travel to Singapore.
Continued political uncertainty in Thailand and, more recently, reduced Chinese demand for travel to Southeast Asia has also dampened passenger traffic to and from these key markets.
Reflecting the intense competition to fill seats in a tight aviation landscape and the weakening of major revenue-generating currencies, airlines in the region have also observed lower yields despite growth in passenger carriage. This has resulted in reduced margins.
CAG’s chief executive officer Lee Seow Hiang, said: “CAG values the deep partnerships we have with our airline partners and we are cognisant of the market conditions faced by them. While we cannot iron out the volatilities of the industry cycle, we believe we can provide helpful temporary cost relief as airlines.”

Sourced: ttrweekly