Changi Airport expansion to give related industries a lift

SINGAPORE: To stay ahead of competition from regional airports, Singapore’s Changi Airport will get a new Terminal 5 by the mid-2020s — more than doubling its handling capacity to 135 million passengers a year.

Terminal 5 will be one of the largest terminals in the world. By then, the airport will be operating on three runways, compared to two currently.

Analysts said the move will give other related-industries a lift and position Singapore for an increasingly inter-connected Asia.

Changi Airport moved 51 million passengers and almost two million tonnes of cargo in 2012.

With regional free trade talks like the Trans-Pacific Partnership and the Regional Comprehensive Economic Partnership underway, Singapore’s plan to expand its airport will put it in good stead to capture a large chunk of the rising intra-Asia trade.

Irvin Seah, a senior economist at DBS Bank, said: “Singapore probably has the most FTAs among countries around the world. Many of these FTAs are very comprehensive, new-age FTAs, because the focus is not just restricted to merchandise trade. A large part of many of these free-trade-agreements focus on the investment flows and services flow.”

Singapore already is the world’s busiest transhipment hub, handling about one-seventh of the world’s container transhipment throughput (31.26 million TEUs of containers) in 2012, according to the Economic Development Board. It was also recently ranked the top logistics centre globally by the World Bank in the 2012 Logistics Performance Index.

Analyst said the latest plans to expand Changi Airport will not only cement Singapore’s leading position in logistics and transportation, it is set to have positive spill-over effects on other supporting sectors like maintenance, repair and overhaul (MRO).

Terence Wong, head of research at DMG Partners Research, said: “Sectors that benefit will be the MRO players — ST Engineering, SIA Engineering. Logistics — there’s going to be a logistics hub over there — in terms of A Sonic, possibly CWT as a logistics player. They should also gain from this mega terminal.”

Still, with the completion of the mega terminal almost a decade away, it is still early days to gauge the benefits to sectors like MRO and tourism. However, analysts said the construction and consultancy services sectors will likely be the first in line to benefit.

Changi Airport expansion to give related industries a lift