>> ASIAONE / NEWS / THE STRAITS TIMES / STORY

		Fri, Jan 11, 2008 The Straits Times
Changi's T3 a beauty but will it make money?
AFTER much fanfare and many 'oohs' and 'ahs' from visitors at the opening of Changi Airport's Terminal 3 (T3), one question needs to be asked: Is T3 an architectural achievement but a commercial failure? T3 has failed in three areas. Firstly, by building such an expensive new terminal, we have failed to recognise the current explosive growth and future market domination of budget carriers. How can Singapore and the Civil Aviation Authority of Singapore (CAAS) attract more airlines to operate from Singapore in the future with such a costly new terminal? Singapore's aim to become a competitive air hub will be hindered if low-cost carriers avoid Singapore because it is too expensive to operate at Changi. The game of becoming the next air hub in the region is not just about capacity but also about cost.

I do not believe T3 or any single terminal is unable to handle SIA's entire operations. It is the higher cost of operating in T3 that will create future problems for SIA's operations.

A handful of other carriers will operate from T3 only from May. I cannot help but wonder how much money will be lost while T3 is under-utilised and when T3 will turn in a healthy profit.

Thirdly, we have failed to realise that fuel prices, a key cost component in the transport industry, have been rising since the oil crisis in the 1970s. Many airlines around the world have filed for bankruptcy. Cost is a major consideration for all airlines, and the global trend is to build low-cost terminals.

Budget carrier JetBlue is building a new 26-gate 20 million capacity terminal (Terminal 5) at John F. Kennedy International Airport for only US$550 million (S$788 million). Mind you, that is in New York where building costs are among the highest in the world.

Syu Ying Kwok