Ministry of Transport (MOT) and Civil Aviation Authority of Singapore (CAAS) has announced that a new Airport Development Levy (ADL) will be introduced for passengers departing Singapore Changi Airport from 1 July 2018, saying that the passengers who begin their trips from Changi Airport will be charged S$10.80, while who start their trips elsewhere and connect through Changi Airport will be charged S$3,00.
In a joint statement on Wednesday (28 February), it stated that the ADL will help fund airport developments, including the new Terminal 5 (T5), and related infrastructure at Changi East. Legislative changes will be made to put into effect this new tax, which will apply to tickets issued on or after 1 July 2018. Passengers travelling on or after 1 July 2018 whose tickets are issued prior to 1 July 2018 will not be subjected to the ADL.
Other than the ADL being introduced, passengers will also experience an increase in the Passenger Service and Security Fee – a combination of the current service charge and a security charge. This will increase by S$2.50 from 1 July. And from Apr 1, 2019, this fee will again increase by S$2.50 and will do so every year until 2024, which marks the mid-point of the construction phase of the Changi East project. In 2024, the fee will then be reviewed.
This means that from 1 July onwards, passengers will have to pay a total of S$47.30 in airport fees and S$49.80 from Apr 1, 2019.
Currently, travellers departing from Changi Airport have to pay a S$34 departure charge. The charge includes the Passenger Service and Security Fee, as well as a CAAS levy.
MOT noted that with robust air traffic growth over the last decade averaging 5.4 percent growth per annum, Changi Airport is fast reaching the limits of its capacity. Growth is expected to remain strong over the next few decades, supported by the growing demand for air travel in the Asia-Pacific.
According to the authority, without further expansion, air traffic at Changi Airport will exceed capacity; Changi Airport will be unable to grow its connectivity and could lose its hub status to other airports around the region. Service standards will also drop and travellers will experience more delays.
"It is therefore critical for Changi Airport to expand its infrastructure and capacity," claims the ministry, adding that businesses and passengers will benefit from Changi Airport’s ability to handle higher volumes of passenger and aircraft movements safely and efficiently. Both passenger and cargo carriers will have room to expand at Changi Airport.
"Singapore’s connectivity to key and emerging economic centres will be enhanced, offering additional destinations and options for Singapore residents. Likewise, the expansion ensures that Changi Airport remains a preferred global air cargo hub for freighters and transhipment operators," it stressed.
There are three main elements to the project, which are a three-runway system, a network of tunnels and systems, and Terminal 5, which will allow Changi Airport to serve up to an additional 50 million passengers per annum in its initial phase, a 60% increase to Changi’s capacity.
It noted that extensive land preparation and drainage works at Changi East, which are needed to prepare the site prior to its construction, have been on-going since 2014.
The ADL will be reflected on airline tickets and forms part of the total ticket price, which will be collected by CAG from the airlines, on behalf of the Civil Aviation Authority of Singapore (CAAS) and the Government.
The ADL revenue will be channelled directly into the Changi Airport Development Fund (CADF) set up for the purpose of funding airport developments at Changi, and does not form part of CAG’s or CAAS’s revenue stream.
Objection by IATA
The International Air Transport Association (IATA) has earlier announced its objection against any attempt by Singapore to charge travellers to help fund the construction of its new Changi Airport Terminal 5. The airline industry's most prominent trade body stressed that it is "strongly against any pre-financing of any infrastructure".
IATA chief executive Alexandre de Juniac told a media roundtable as part of the Singapore Airshow on 5 February that passengers should not pay first without having the infrastructure ready to be operated and used by airlines and by the users.