SINGAPORE (Feb 28): Changi Airport Group (CAG) will raise aeronautical fees for both passengers and airlines from July 2018 to help fund part of the Changi East development, as well as the upgrading and refurbishment of existing terminal infrastructure and security facilities.

The Changi East development comprises a three-runway system; a network of tunnels and systems to allow for the transfer of passengers, baggage and airside vehicles; and Changi Airport Terminal 5.

From July 1, the Passenger Service and Security Fee (PSSF) for all origin/ destination passengers departing from Singapore Changi Airport will increase to $30.40, from $27.90 currently.

There will be no change in the PSSF levied on transfer/ transit passengers, who now pay $6 when departing from Changi Airport.

Subsequently, the PSSF will be adjusted annually on Apr 1 by $2.50 over the next six years, with the last increase on Apr 1, 2024.

This marks the mid-point of the estimated construction phase of the Changi East project. Any subsequent adjustments will be announced only after a review then.

Besides the adjustment to the PSSF, landing, parking and aerobridge (LPA) fees, applicable to all flights at Changi Airport, will increase by 1% on July 1.

The LPA fees will then increase by 1% annually on Apr 1 for the next six years, with the last increase on Apr 1, when a review will be conducted.

Under the regulatory regime, CAG has the flexibility to set the amounts for the various aeronautical charges for up to 2030, so long as the overall amount does not exceed the cap set by the Civil Aviation Authority of Singapore (CAAS).

This cap will be reviewed if the competitiveness of Singapore air hub is adversely impacted.

With the Changi East development well underway, CAG says payments have to be made for contracts already awarded and works done during the entire construction period.

Ongoing works include land preparation works, the development of a canal network to prevent flooding, and paving works to extend Runway 3.

The adjustment to the aeronautical fees will also contribute to the upgrading and refurbishment of existing terminal infrastructure.

Development works taking place at Changi Airport between now and 2024 include upgrading of the Skytrain system and the baggage handling system, as well as a revamp of Terminal 2.

In a media release on Wednesday, CAG says an earlier adjustment in aeronautical fees will help to avoid a steep escalation of fees at a later stage.

At the same time, Singapore’s Ministry of Transport today introduced a new Airport Development Levy (ADL), for passengers departing from Changi Airport from July 2018.

The new ADL will see departing passengers at Changi Airport pay a levy of $10.80, while transfer and transit passengers will be required to pay a levy of $3.

Even with the adjustment in aeronautical fees, including the introduction of the Airport Development Levy, CAG says Changi Airport will remain competitive compared to other international air hubs.