Singapore''s Changi airport to be corporatised
01 September 2007
The Singapore government believes it is time to corporatise Changi Airport, to enable it to stay ahead of the competition. The idea was first mooted by a government-appointed committee, which had named the Civil Aviation Authority of Singapore (CAAS), together with the Port of Singapore Authority and Singapore Telecom, as possible candidates for privatisation.
Port operations were corporatised in 1997, four years after Singapore Telecom was privatised. The privatisation recommendation for Changi was shelved to allow the CAAS to concentrate on making Singapore a major air hub in the region.
Many of Changi''s major competitors, including Kuala Lumpur, Hong Kong and Bangkok, are already corporatised or privatised. Corporatisation means that the government continues to own the asset, but it adopts more flexible private sector practices for better efficiency and functioning.
Corporatisation is expected to give Changi Airports International (CAI), the airport''s investment and consultancy arm, a boost as it competes with global players like the Schiphol and Fraport airport groups.
So far, CAI has ventured into China, India, Vietnam, Russia and the Middle East. Experts say Changi needs to expand its business overseas to make up for its slower growth as compared to its competitors.
Average passenger growth at Changi was 4.9 per cent a year between 2001 and 2006, while Hong Kong''s Chek Lap Kok Airport grew at 7.4 per cent, Bangkok by 7.8 per cent and Dubai by 22.6 per cent. Restructuring at Changi will take place over the next 18 to 24 months, after discussions with staff and other industry stakeholders.