SINGAPORE: Growth is the word on everyone’s lips when it comes to the outlook for Changi Airport in 2025, after the airport narrowly missed out on a full recovery in passenger traffic in 2024.
Having handled 67.7 million passengers in 2024 – 99.1% of the record 68.3 million handled in 2019 – the airport is poised to grab a larger slice of an expanding aviation pie, industry analysts tells The Straits Times.Projections are for low single-digit growth in the year ahead.
The airport is expected to be buoyed by an economic resurgence in the Asia Pacific and improved connectivity, with the introduction of new airlines and routes, and increased flight frequencies.
As at January, 100 airlines are operating more than 7,400 scheduled flights at Changi each week, linking Singapore to 163 cities in 49 countries and territories.
This is close to the scale of the airport’s network in January 2020 before the Covid-19 pandemic, when Singapore was linked to more than 170 cities.
The aim is to have more than 200 city links by the mid-2030s. But hurdles loom on the horizon that could pose a threat to Changi’s status as a leading hub.
Travel analyst Gary Bowerman said travel, tourism and aviation in South-East Asia and across the Asia Pacific will get highly competitive in 2025.
Margins and profits will tighten, and the battle to attract travellers will intensify, added the Kuala Lumpur-based director of tourism consulting firm Check-in Asia.
At a dinner in September 2024 to mark the Civil Aviation Authority of Singapore’s 40th anniversary, Prime Minister Lawrence Wong highlighted the narrowing gap between Singapore and other regional air hubs, and the significant investments being made to improve and expand airports in these countries.
The Centre for Aviation said there are 170 known construction projects at existing Asia-Pacific airports, with a total investment value of US$217bil.
There are also 90 new airport projects in the region, totalling US$121bil in value.
Urging Singapore’s aviation industry to not rest on its laurels, Wong said increasingly, flights that would have passed through Changi may also no longer be needed.
Bowerman said: “Singapore is a trusted airport by airlines and passengers, but in an environment of shifting growth drivers and uncertain travel patterns, there will be tough challenges ahead.”
Mayur Patel, head of Asia at aviation data consultancy OAG Aviation, expects a growth rate of about 3% to 5% at Changi Airport in 2025.
This is expected to be driven by robust travel demand in South-East Asia, the continued expansion of low-cost carriers, and investments in the region to boost air travel capacity.
Yet, bottlenecks that slowed Changi’s recovery in 2024, such as supply chain snags, may persist.
Endau Analytics aviation consultanacy founder Shukor Yusof said an annual growth rate of 1% to 2% in 2025 would be laudable for Changi.
For him, the biggest risks in the coming year include continued geopolitical unrest and a potential global economic slowdown triggered by US trade and financial policies.
Independent aviation analyst Brendan Sobie from Sobie Aviation said Changi’s passenger traffic is likely to reach six million in January.
This will be a 10% increase year-on-year, and a significant milestone – it will be the first time the airport’s monthly traffic has hit six million outside of December, which is the busiest month.
But in Sobie’s view, the overall outlook for 2025 is mixed.
He said the volume of arriving visitors is still about 8% below 2019 levels, and this market segment has been particularly weak in recent months.
An increase in transit traffic in 2024, which exceeded 2019 levels by 7%, helped offset this shortfall, he noted.
The transit market is where there are opportunities for further growth in 2025, especially as Singapore Airlines (SIA) Group continues to add capacity, said Sobie.
However, he flagged concerns over recent service cuts by AirAsia, which will reduce the low-cost carrier’s traffic at Changi to about 25% below 2019 levels.
According to OAG data, AirAsia will stop its daily Singapore-Phuket flights after March 6, and progressively reduce the frequency of its Singapore-Bangkok service from five daily flights to three over the next two months.
More capacity cuts are expected as AirAsia redeploys its assets to more profitable routes.
This, coupled with the slow recovery of Jetstar Group, raises questions over whether the Singapore market is sufficiently competitive, Sobie said.
“AirAsia and Jetstar are the two biggest competitors after SIA Group by quite a big margin,” he added.
“Pre-Covid-19, they accounted for a combined 13% of the overall market at Changi Airport. They now account for less than 10%.”
Another major factor that could affect Changi’s appeal is operating costs, which are set to rise.
This is in the form of higher fees for airlines and higher passenger taxes to help fund the upcoming airport upgrades.
Citing AirAsia’s capacity cuts, Patel said low-cost airlines may find the airport charges unsustainable, causing them to redirect traffic to hubs with more favourable pricing. Full-service carriers are feeling the pinch, too. — The Straits Times/ANN
