Senior Minister Lee Kuan Yew of Singapore has warned that the republic's air transport players face a host of challenges in an increasingly competitive environment.

"Changi airport and Singapore Airlines will have to adapt to the rapidly changing aviation landscape," said Lee, addressing the International Air Transport Association/Asian Aerospace Aviation Summit dinner on Sunday night. "At stake is not just SIA, but Singapore's future as an air hub."

He pointed to the rise of low-cost carriers as an increasing force in the region.

"Apart from low-cost carriers, SIA will face competition from traditional full-service carriers that have re-invented themselves," he said, with carriers like British Airways and United Airlines cutting jobs, making savings and becoming "leaner and meaner".

The message for Changi airport was that it "must maintain and strengthen its connectivity", he said.

"The air hub status did not come about by chance. We were handicapped by our small domestic base and not especially favoured by geographical location. To succeed, we offered better services than our competitors and better connectivity."

He added that the Civil Aviation Authority of Singapore is studying the feasibility of building a dedicated low-cost terminal.


Source: Flight Daily News