The new Passenger Service Charges (PSC) structure to be implemented on 1 July 2018 will make Changi Airport one of the costliest airports for passengers in Asia Pacific, a Singapore Business Review report quoted UOB Kay Hian.
The airport development levy on departing passengers will fund the development of the third runway and Terminal 5, a report said. PSC will rise by 39 per cent to $13.30 for departing passengers, whilst the cost for transiting passengers will rise by $3 per pax.
In addition, PSC for departing passengers will rise by $2.5 annually till 2024. Landing, Parking & Aerobridge (LPA) fees will also be raised by 1 per cent annually till 2024.
“Several airlines have stated that they will not absorb the increase in PSC, and this will raise overall ticket prices for passengers. Low-cost travellers, who account for 30 per cent of Changi’s throughput, will be the most price sensitive,” SBR quoted UOBKH analyst K Ajith.
The potential decline in pax throughput at Changi may result in slower growth, he said. Pax throughput at Changi could grow by 5 per cent in 2018
Visitor arrivals growth was strongest from China and Indonesia and low-cost carrier (LCC) seats account for 30 per cent and 45 per cent respectively, between Singapore and the two countries.
“We also note that Changi’s current YTD passenger throughput growth is already 1ppt lower than in 2017 and growth over the past three years has lagged other airports in the region,” he added.