$1 trillion airport spree puts S’pore, Hong Kong on notice

Bloomberg

For decades, Singapore and Hong Kong have reigned supreme: as key transit points connecting travellers in Asia to and from the rest of the world. But now, a $1 trillion global airport spree is threatening the status quo.
About half that money is due to be spent on upgrading or building new airports in Asia, the Sydney-based CAPA Centre for Aviation estimates. In Beijing, a new $12.9 billion airport due to open in 2019 will turn China’s capital into one of the world’s biggest aviation hubs.
Bangkok’s Suvarnabhumi Airport is set for 117 billion baht ($3.5 billion) of upgrades through 2021 including a third runway. South Korea’s Incheon International Airport is spending 5 trillion won ($4.5 billion) on a second terminal as it aims to become “the world’s leading mega-hub airport.”
As part of efforts to keep up, Singapore’s Changi Airport this month unveiled a S$1.3 billion ($950 million) fourth terminal.
Hong Kong, meanwhile,
plans to fill in part of the South China Sea to make room for a third runway — at a cost of HK$141.5 billion ($18 billion).
“It’s a race between global hubs,” said Torbjorn Karlsson, partner in the civil aviation practice at Korn Ferry International in Singapore. “The question is who are going to be the big winners.”
According to CAPA research published July 20, about $255 billion is currently earmarked to build new airports worldwide, with another $845 billion to be spent on upgrades such as extra runways and terminals. All told, the construction work stretches out to 2069, CAPA said.
New airports in Asia will soak up more than $125 billion, compared with just $3.6 billion on brand new sites in the US and Canada, CAPA said.
The new developments are an identity crisis in-waiting for Hong Kong and Singapore. Cathay Pacific Airways and Singapore Airlines have made their names in the jet era ferrying visitors in and out of the cities and onward.
“Twenty years ago, airports were just sitting there waiting for airlines to come and fly there,” said Joanna Lu, who specializes in airports and route networks as the Hong Kong-based head of Asian advisory at Flight Ascend Consultancy. “Things change very quickly. It’s hard to say the transfer market is going to be always yours.”
By 2036, China’s domestic
air-travel traffic will quadruple to
1.6 billion passengers, or 1.3
flights for each person per year, according to Airbus SE.
Hong Kong International Airport last year almost maxed out as it handled 71 million passengers. Its development project is so vast that authorities are demanding between HK$70 and HK$180 from each passenger flying out of Hong Kong to help fund the construction. That’s on top of increasing parking and landing fees for airlines by as much
as 27%.
At Changi Airport, the new fourth terminal is due to open by the end of this year. It will feature dozens of automated check-in kiosks and bag-drop counters, according to a media briefing on Tuesday. Changi will be the first airport in the world to use tomography scanners, which means passengers don’t need to take laptops out of their bags for screening.
The new terminal will increase total capacity from 66 million to 82 million. Last year it handled a record 58.7 million passengers. Singapore is already working on a third runway and a fifth terminal due to be completed in the late 2020s.
A spokesman for Changi said advance planning will help the airport, with passenger traffic forecast to rise to 60 million this year, meet its needs.