SINGAPORE: The corporatised Singapore Changi Airport and the new airport regulator will work closely to develop Singapore as a leading global air hub.

The two entities were launched on Wednesday by Singapore's Minister Mentor Lee Kuan Yew.

The restructured Civil Aviation Authority of Singapore (CAAS) will focus on developing Singapore's aviation industry and air hub, while the corporatised Changi Airport Group will run the airport.

Analysts say the repositioning of Changi Airport, which will sharpen its business focus, mirrors the move by other international airports such as London's Heathrow Airport.

The corporatised Changi Airport will undertake the operational functions of managing Singapore's airport, including its emergency services, and investments in foreign airports.

Regulatory functions such as air traffic services, air services negotiations, safety and customer service will be performed by the restructured CAAS.

Analysts say this will prevent a conflict of interest - such as if an incident was to occur at Changi Airport, it will then be investigated by the regulator CAAS. Analysts say this shows the government is serious about overhauling the airport.

Aviation players based at Changi say they have already seen a difference since the move was announced nearly two years ago.

Managing director, Tiger Airways, Rosalynn Tay, said: "For Tiger Airways, we think it is a very positive move. So far, our experience with this new corporation has been very positive and it has been very pro-growth.

"We believe this experience will continue, and this will fuel Tiger's growth plans, and that means more tourist and more jobs in Singapore."

Changi Airport was recently ranked third in a global airport ranking survey. This is the first time it has dropped from top two positions since 2001. Consultancy group Skytrax put Singapore's Changi Airport behind South Korea's Incheon International and Hong Kong International.

Analysts say Changi's increased focus on profitability is not a concern, but there are some areas that need to be tweaked.

The corporatisation of the Changi Airport Group is expected to give the group the flexibility to respond quickly to changes, and aggressively pursue overseas business and investment opportunities.

Mr Lee said: "We must restructure and strengthen our airport operations and regulatory system. When recovery comes, Singapore's aviation sector must be ready to meet the new challenges.

"The economic crisis has seriously dampened air travel. But once the global economy recovers, the aviation industry will bounce back."

And this is timely as Mr Lee said Changi's competitors are fast catching up.

He said: "Emerging economies in Asia and the Middle-East will lead the next wave of demand for air travel. We have to be ready for this. As airport users become more discerning and demanding, our service excellence and know-how must enhance the Changi experience."

Changi Airport Group will be wholly owned by Temasek Holdings, which is paying an as-yet undisclosed sum for Changi's assets.

- CNA/yt