Higher airport fees to kick in on July 1

Departing passengers will pay $13.30 more to fund Changi's major expansion plans, with charges rising until 2024

Passengers and airlines using Changi Airport will have to partly fund its major expansion plans by paying higher fees from July 1.

The Government sees the massive investment in the airport as key to cementing Singapore's status as an aviation hub.

But industry players such as the International Air Transport Association (Iata) yesterday again opposed the model of getting users to pre-fund facilities.

From July 1, passengers who now pay $34 to fly out of Changi will have to fork out $13.30 more.

Transit passengers will have to pay $3 more for each flight, with all hikes to be included in their fares.

Airlines will also have to pay more in aircraft parking and landing fees, the Ministry of Transport, Civil Aviation Authority of Singapore (CAAS) and Changi Airport Group (CAG) said yesterday.

The fees will rise each year until 2024, the authorities said. By April 1, 2024, the total fee for passengers departing from Changi will climb to $62.30.

The total bill for the Changi East development, which includes Terminal 5, is expected to run into tens of billions, the Government said.

So far, it has committed more than $9 billion to the project, and CAG another $3.6 billion.

The extra fees to be collected from July are expected to yield more than $4 billion.

It is not clear if the fees will be cut when T5 opens around 2030.

The fee is made up of a passenger service and security fee, an aviation levy charge and the new airport development levy.

The Sunday Times had reported in January that passenger fees will help pay for the works, which include a third runway and massive drains and tunnels, some of which will move bags and people between T5 and the current airport.

T5 is expected to eventually handle up to 70 million passengers a year - more than Terminals 1, 2 and 3 combined.

Changi Airport, which handled a record number of 62.2 million passengers last year, expects its current capacity of 85 million passengers a year to be fully utilised by the late 2020s.

Transport Minister Khaw Boon Wan stressed in a Facebook post that the Government will be the main funder through grants, while CAAS and CAG will dip into their reserves and future surpluses to help fund T5.

"Having the Government and the airport community contribute towards the project is a fair way to finance the project, which will bring benefits to our people, businesses and the Singapore economy," he said.

Other airports have introduced similar charges. In 2016, Hong Kong International Airport, which is building a third runway, started collecting between HK$70 (S$12) and HK$180 from each traveller.

But Iata - the global voice of airlines - repeated its opposition to airlines pre-funding projects before using them.

Aviation analysts, however, do not expect the higher charges to significantly hurt Singapore's aviation hub status.