Changi Airport’s crowning asset has drawn admiring crowds and fawning reviews. But its shininess belies the deeper challenges Singapore faces in remaining relevant as a regional hub for business and tourism.
SINGAPORE (Apr 22): By the time Jewel at Changi Airport officially opened for business on April 17, more than half a million people had streamed through its gleaming glass doors, eager to be among the first to experience it.
Much has been made of how the 1980s-era open air car park in front of Terminal 1 has been transformed, over seven years, into a glowing dome of delights. The superlatives are plenty: the world’s tallest indoor waterfall; the Sky Nets, which is the world’s first indoor attraction on such a scale; a mirror maze that is the first of its kind to be built indoors; and a world-class retail space. The architect, Moshe Safdie, spoke about having rejected “obvious ideas” in favour of a “great paradise and mystical garden” that would fit the concept of an airport as “a place of serenity and repose”.
Indeed, according to officials, the objective was about making Changi more than an airport, to capitalise on the rapid growth of air travel in the region and capture “tourist mindshare”. With its various stores and attractions, Jewel will serve to attract passengers who, according to Changi Airport Group, are spending more transiting through an airport.
On the face of it, there are immediate economic benefits from Jewel — an uptick in tourist arrivals and receipts, particularly from neighbouring markets. Additionally, the development has “added a lot more value to the plot of land”, says Irvin Seah, DBS Group Research economist. “It’s a very good utilisation of the limited space we have.”
Jewel will certainly be an iconic structure that identifies Changi, and Singapore, from now on. Yet, it is very much a tried-and-tested formula for attractions here — big, beautiful and garden-like. And, like any other attraction, Jewel’s novelty could soon wear off.
Jewel may actually have little impact on Singapore’s development as an air hub for the long run. For one, the development is on the landside of the airport, meaning transiting travellers would have to choose to exit immigration to enjoy the facilities. The changing dynamics of air travel are also working against Singapore’s keeping a grip on its status as a regional air hub: Aircraft are being made to fly farther and longer, and countries in the region, growing at a much faster rate than Singapore, are stepping up the development of their own airports.
Caught up
In anticipation of the growth in arrivals into the city, Changi Airport will also be expanded. Along with Jewel’s construction, Terminal 1 was upgraded to have a bigger arrival hall and a fully automated baggage handling system. The expansion raises the airport’s total handling capacity to 85 million passengers a year, up from 82 million a year. The next project is upgrading works at Terminal 2, and of course works are underway for Terminal 5, which, when completed after 2030, will take Changi’s total capacity up to 150 million passengers a year.
However, Changi’s development is not quite far enough ahead of the competition. Jakarta, for instance, is planning a second international airport, with two runways and connectivity into the city, that will result in a combined handling capacity of over 100 million passengers a year for Indonesia’s capital city.
In Thailand, Bangkok’s Suvarnabhumi airport is undergoing a phased expansion that will increase its handling capacity to 150 million passengers annually. It will have four runways to handle 120 flights per hour. Suvarnabhumi is already one of the busiest airports in the region, supporting Bangkok as among the world’s most visited cities.
And, in a few months, the world’s largest air passenger terminal opens at Beijing’s new international airport. The 700,000 sq m terminal at Beijing Daxing International Airport, designed by the late illustrious architect Zaha Hadid, will help cater to what is fast becoming the world’s largest aviation market. Taken together with the existing Beijing Capital International Airport, China’s capital city air hub will ultimately be able to handle nearly 200 million passengers annually. For superlatives, China is no match.
Further, Singapore’s dominance as a regional air hub seems to be diminishing. For one, new aircraft models are supporting more point-to-point flights. Travellers from neighbouring countries no longer have to pass through Singapore for flights to Europe, the US or Australia; Indonesian national carrier Garuda has had the ban on its flights to the European Union lifted; while most other airlines in the region, including the budget carriers, have mounted their own services to major cities elsewhere. Finally, after decades of ceding control to Singapore, both Indonesia and Malaysia are demanding the return of management rights to their airspace.
The fact is, Singapore can no longer count on staying ahead by virtue of the comparative underdevelopment of its neighbours. The surrounding economies that are growing at a much faster pace, underpinned by their respective hinterland and domestic consumption, have developed their capabilities and are able to attract international business at a lower cost.
Vision for tomorrow
To be sure, Singapore has a pipeline of developments that are set to ensure it remains a metropolis for business and leisure in the long run. The government has, in recent weeks, unveiled major redevelopment plans for the CBD and Jurong Lake District, with the latter remade into a tourist attraction. But the concern is that such major infrastructure projects are simply a patch for Singapore’s stagnating economy.
DBS’s Seah sees Jewel as just an infrastructure upgrade, and argues that remaking Singapore will take more than just a focus on bigger and better infrastructure. “When you talk about reinventing Singapore, you’re talking about relooking at the longer-term business strategy of the Singapore economy. That deals with many things other than just infrastructure,” says Seah.
What is key for Singapore’s economy in the long term is its people and companies. “Infrastructure is an enabler,” he adds. “At the end of the day, what we want to achieve is long-term sustainable economic growth. Beyond infrastructure, we have to focus also on skill sets, technology and good economic policies.”
There could be areas in which Singapore could improve on, as Jamus Lim, associate professor of the Economics Department at ESSEC Business School Asia-Pacific, points out. “On balance, I think Singapore has an enviable record, although I would like to see greater agility in adapting to emerging global opportunities and pivoting away from unsuccessful sectors, as well as greater transparency and accountability in acknowledging failures, if and when they occur,” he says.
On the bright side, Singapore is in the middle of a still-emerging region, which does give it some time to marshal its wits. CIMB Private Bank economist Song Seng Wun points out that short-haul flights coming from Southeast Asian cities are still the biggest market for Changi Airport.
“Asia and Africa are the fastest-growing air travel markets. From Singapore’s standpoint, it is how to continue to ride on that growing demand by creating value-add; not just about flying in and out, but flying in with a bit of activities,” he says, adding that, as Singapore can never compete on cost, it has to provide the difference through the experience.
Song sees opportunities in developing countries such as Cambodia, Myanmar, Laos and Vietnam. “So far, we’ve seen the arrivals from these smaller Asean countries growing at quite a fast pace,” he says. “If the promise of wealth and riches in [Cambodia, Myanmar, Laos and Vietnam] delivers… [Singapore] is still a place of intra-regional and global travel.”
Still, Wong King Yin, lecturer at Nanyang Business School, Nanyang Technological University, reckons that the effects of Jewel could be short-lived, as the regional competition looks to copy Singapore’s efforts. “The effects can last for at least five to 10 more years until other Southeast Asian countries position [themselves] as global cities, which may dilute the branding of Singapore,” he says.
Changi Airport came about because of a vision and political will to develop an airport like no other. It set a benchmark for airports worldwide, but it could soon be overshadowed. “Hardware” such as a glitzy airport terminal, retail mall and transport infrastructure can be easily replicated or surpassed if finances allow for it.
Singapore’s advantage is that its government still has the resources to pursue its goals; it just needs a sharper vision for tomorrow.
