PASSENGERS and airlines could be paying more for using Changi Airport after 2011, with the aviation industry regulator's announcement yesterday that the cap on the amount of revenue the airport can collect for every passenger will be increased.
It will be left to the newly formed Changi Airport Group (CAG), which operates the airport, to determine how much the charges should be, and when they should kick in.
It has till early 2011 to work that out with the regulator, the Civil Aviation Authority of Singapore (CAAS), which will allow the operator to raise the maximum amount of revenue collected per passenger by 12 per cent, from $14.40 last year to $16.15.
Revenue per head is derived from a number of streams, such as passenger departure taxes, money collected from airlines in parking, landing and other charges; and others such as franchise fees paid by ground-handling companies.
Departing passengers now pay a tax of $20 at the three main terminals and $7 at the Budget Terminal. On top of that, they pay an $8 security fee.
The main terminal tax was increased from $15 to $20 in January this year.
The total tax payable at Changi Airport is higher than what some other airports in Asia, including Hong Kong's Chek Lap Kok, charge but is almost on par with others like Tokyo's Narita and Bangkok's Suvarnabhumi.
In announcing the decision to allow the airport to collect more revenue per head after 2011, the CAAS said it took into account the existing two-year freeze on charges and the expected recovery in passenger traffic.
Last year, Changi handled 37.7 million passengers, but the global downturn has seen traffic tumble. For the first eight months of the year, 22.9 million passengers crossed Changi's aerobridges, 5.2 per cent lower than the January-August haul last year.
The airport authority said in February this year that it expects traffic for the whole year to be 8.5 per cent lower than last year's.
In April, the Government announced that airport charges would be frozen for two years to ensure that the airport stays competitive after it is corporatised.
This was done in July when a major restructuring split the CAAS in two: the CAAS to oversee regulations and CAG to manage the airport.
To ensure that the airport stays competitive and retains Singapore's hub status, the operator will be bound by certain rules and regulations.
Apart from the revenue cap, the airport must also set aside some of the money that it collects from non-aeronautical sources - for example, its cut from shopping and dining receipts - to keep aeronautical charges like airline fees and passenger taxes competitive.
Aircraft landing and parking charges at Changi are among the lowest in Asia, and together with passenger departure taxes, are collectively referred to as aeronautical fees and charges.
During the last few years, such charges have accounted for about 40 per cent of the airport's total revenue. In the financial year which ended March 31, Changi's revenue hit $1.23 billion.
Post-corporatisation, how much the group will set passenger and airline charges at will depend on existing market conditions, the need to remain competitive, and the financial and commercial considerations, said CAG spokesman Ivan Tan.
He said: 'We remain committed to maintaining Changi Airport's position as an international aviation hub and will achieve this by continuing to be innovative and efficient in our operations, and striving to deliver value for our partners and stakeholders.'
Singapore Airlines spokesman Nicholas Ionides said: 'As the framework is new, we hope to work with CAG to ensure that it results in continued efficiency in operations, competitiveness in pricing and the high-quality customer service that Changi Airport is well known for.'