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SINGAPORE: Budget airlines have turned in some strong numbers for last year, helping to prop up passenger traffic despite a turbulent time for the aviation sector.
They carried some seven million passengers to and from Changi Airport last year, up by 54 per cent from 2008.
According to Second Minister of Transport and Finance Lim Hwee Hua, Changi Airport should work more closely with these carriers to help meet their needs amid growing demand.
Low cost airlines now account for one quarter of total passenger numbers at Changi Airport, up from under two per cent just six years ago.
"By all accounts we can expect this growth to continue at least in the foreseeable future," said Charles Chong, Member of Parliament (MP) for Paris Ris-Punggol GRC. "Could the minister tell us if CAS intends expand the Budget Terminal, or upgrade its facilities to accommodate this new trend in air travel?"
In her reply, Second Minister for Finance and Transport Lim Hwee Hua said that rising passenger numbers does not mean low cost carriers would prefer to use the Budget Terminal.
"While we prefer to see more low cost carriers at the budget terminal, there are other factors to consider," said Mrs Lim. "First, some low cost carriers may prefer operating at the main terminals for connectivity reasons.
"Second, Changi Airport Group as operator, has to balance capacity and utilisation at the main airport terminals vis-a-vis the Budget Terminal.
"CAG has to work closely with the low cost carriers on the best arrangement for the airlines, and ensure adequate and appropriate infrastructure to meet the LCCs' needs."
But the transport ministry is optimistic about the recovery of the aviation sector, and it expects further liberalisation of air services in the region to provide a boost.
"Within the region, two multilateral agreements liberalising freighter and air passenger services among ASEAN member states have recently come into force," said Mrs Lim.
"A third multilateral agreement, which will expand on the earlier arrangement to fully liberalise passenger air services within ASEAN, is expected to be signed this year.
For the first time, ASEAN is also in negotiations with a dialogue partner China, to establish a liberal air services regime.
Meanwhile, the Transport Ministry also plans to help the maritime industry remain competitive.
It is extending its concession for port fees by another six months, and will review the situation again when it expires at the end of September.
"We are optimistic (for) 2010. Cargo volumes have picked up and freight rates have regained some ground," said Mrs Lim.
"However, it is still too early to tell if the recovery is sustainable. The excess supply of vessels continues to be a structural problem for the industry. However, the government will do what we can to keep business costs competitive."
Last year, as part of its efforts to help the shipping industry during the economic downturn, the Maritime and Port Authority of Singapore (MPA) introduced a 10 per cent concession in port dues to ocean-going vessels with a port stay of not more than 10 days and 20 per cent port dues concession for harbour craft from 1 April 2009 to 31 March 2010.
With the latest announcement, these concessions will be extended till 30 September 2010.
- CNA/yb
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