Tender called for third ground handling licence at Changi Airport
By Asha Popatlal, Channel NewsAsia | Posted: 17 November 2009 1330 hrs

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SINGAPORE: A tender is being called for a third ground handling licence at Changi Airport.

The tender by Changi Airport Group comes less than a year since Swissport packed its bags on April 1, after reportedly booking losses of S$50 million. Swissport was then the third ground handler, after Singapore Airport Terminal Services and Changi International Airport Services.

Changi Airport Group said it has received expressions of interest from a number of parties in the past few months.

Its CEO, Lee Seow Hiang, said this has been prompted by two main factors – the divestment of Singapore Airport Terminal Services (SATS) by Singapore Airlines and improving business conditions in the aviation market.

He added that there was especially keen interest from those who have experience servicing low-cost carriers.

A third handler will provide the 85 airlines currently operating at Changi Airport with more choices and possibly more competitive prices.

The tender will be conducted in two phases, with the formal expressions of interest phase closing on December 16. In the second phase, shortlisted bidders will be required to submit detailed bids, including their business and financial plans.

The licence will be for a period of five years and the successful bidder is expected to start operations by the middle of next year.

In the first nine months of 2009, Changi Airport handled 26.7 million passengers, 1.18 million tonnes of cargo and 177,000 flights.

Leithen Francis, deputy Asia editor, Flight Global said: "I think Changi Airport wants to have a ground handler that is clearly differentiated from the existing two players, that is ... from SATS and from CIAS.

"One way to differentiate is to be a ground handler with particular expertise and focus on serving low cost carriers. And low cost carriers are the new fast-growing segment at Changi Airport.

"In recent months, we have seen a huge increase in the proportion of flights (that) are coming from low-cost carriers (LCCs). It wasn't that long ago that LCCs represented, say less 10 per cent of the flights in and out of Changi Airport. Now, it is over 20 per cent."

- CNA/so/sc