SINGAPORE: The International Air Transport Association (IATA) said that it is "disappointed" with the decision to charge travellers flying out of Changi Airport with a new levy to fund the development of Changi East and Terminal 5.
The global airline voice's regional vice-president (Asia Pacific) Conrad Clifford told Channel NewsAsia on Wednesday (Feb 28) that the industry is against pre-funding for infrastructure projects, where passengers and airlines have to pay for services and facilities they do not currently utilise.
"It is unfair to expect passengers and airlines to pay in advance for a facility they may or may not use in the future when the facility is ready. It also goes against the International Civil Aviation Organization’s (ICAO) charging principle of cost relatedness – where passengers and airlines are charged for the cost of services actually used," he said.
He added that while IATA recognises that the Singapore Government will be bearing the "majority of the costs" for the development of Changi East and Terminal 5, it is "still disappointed" with the decision to proceed with the charges "despite the feedback provided by the industry".
"We are also hoping to have greater transparency on what is the projected cost of Changi East and Terminal 5, and how the costs are being apportioned between the government, Changi Airport Group, airlines and passengers," Mr Clifford said.
He stressed that aviation is an economic catalyst and the added capacity does not just benefit the aviation community but the entire Singapore economy, including tourism, trade and manufacturing.
"Making air travel more expensive for passengers will have a negative impact on travel, tourism, and as a result, aviation's contribution to an economy. Increasing charges for airlines could also affect the financial viability of their services to and from the airport," said Mr Clifford.
AIRFARES TO RISE: JETSTAR
In an emailed statement, a spokesperson for Jetstar Asia told Channel NewsAsia that the airline is "disappointed with the introduction of more airport taxes to fund Changi Airport’s Terminal 5 development".
The spokesperson added that the costs and new levies will "have to be passed on to customers, which mean higher airfares".
Jetstar added that its fares for flights departing from Singapore could rise between 10 and 25 per cent, depending on the destination. The airline noted that currently around 80 per cent of its fares are sold for under S$100.
"Jetstar supports a fit-for-purpose development of Changi Airport which the airport itself should fund. We will continue to work with all stakeholders to ensure that costs are managed and fares remain affordable," the spokesperson added.
A spokesperson for Qantas, which currently operates 38 flights a week out of Changi, also expressed disappointment at the airport's decision, saying it "will put pressure on costs and ultimately the fares that passengers pay".
"While we support Changi's development, we believe they should not be funded through additional taxes levied upon passengers," added the spokesperson.
In response to media queries, Singapore Airlines said it "notes the new charges and will implement the necessary changes accordingly".
The airline added that it is supportive of the planned development of Terminal 5. "Changi Airport's expansion will enhance the long-term attractiveness of the Singapore hub," said an SIA spokesperson.
SIMILAR PRE-FUNDING IMPLEMENTED IN OTHER AIRPORTS
The implementation of user charges to support growth plans has also been carried out at other airports around the world.
In Hong Kong, an airport construction fee was implemented on Aug 1, 2016 to help fund a third runway that will be completed in 2024. Travellers from Hong Kong pay between HK$70 (S$12) and HK$180 (S$30) in additional costs.
Airports in United Arab Emirates and Qatar also tax travellers for ongoing expansion works, with passengers departing from Dubai paying around 35 dirhams (S$12.60).
Additional reporting by Elizabeth Neo