MM Lee speaks of need to restructure airport operations
SINGAPORE: Minister Mentor Lee Kuan Yew said Singapore must
restructure and strengthen its airport operations and regulatory system
so that when recovery comes, the country's aviation sector will be
ready to meet new challenges.
Speaking at the launch of the newly restructured Civil Aviation
Authority of Singapore (CAAS) and the Changi Airport Group on
Wednesday, Mr Lee – who was instrumental in developing Changi as an
aviation hub – noted that the economic crisis has seriously dampened
air travel.
But once the global economy recovers, he is confident the aviation
industry will bounce back. He said the emerging economies in Asia and
the Middle East will lead the next wave of demand for air travel and
Singapore has to be ready for this.
He 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.
"We see plunging airfares, falling demand for airlines' premium
products and deteriorating cargo loads. All these are hitting airlines
hard on their bottomlines."
Mr Lee suggested that full service carriers re-examine their
business models and form new alliances or mergers. He added that Changi
Airport and Singapore Airlines must not be left behind in the different
operating environment.
He also stressed that one of the best investments that Singapore made
in 1975 was to write off the S$800 million that was spent on Paya Lebar
Airport – which was later handed over to the Air Force – and to build
Changi Airport with two runways for S$1.5 billion.
At that time, he said, it was big money. If Singapore had followed
foreign experts' recommendation and had built the second runway at Paya
Lebar Airport, the country's airport would not have become a global
aviation hub.
Mr Lee said Changi Airport has set the benchmark for service
excellence and operational efficiency internationally. It has won over
300 awards since 1987, including 13 awards in the first half of this
year.
He added: "The corporatised Changi Airport Group must have the
drive and initiative to capitalise on the new opportunities and meet
the increasing competition. As a corporation, it is better able to
aggressively pursue overseas business ventures and investment
opportunities.
"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 last year that it would be negotiating the sale of Changi Airport Group to investment firm Temasek Holdings.
- CNA/so