The International Air Transport Association (IATA) has expressed its displeasure over the decision of Singapore to impose a new airport tax and higher departure charges to collect funds for new developments.
The aviation trade body described the move as “unfair.”
One airline – Jetstar Asia – came out and warned that the new charges would be carried on to passengers, with airfares for flights coming from Singapore expected to increase by 10 to 25%, depending on the location.
Australia’s flag carrier, Qantas, also voiced out its disappointment with the move, with its spokesperson saying that the new tax would “put pressure on costs, and ultimately, the fares that passengers pay.”
Singapore Airlines, however, remarked that it has already taken note of the new charges and would be implementing them. It added that it was backing the proposed development of Terminal 5.
Analysts claimed that the move was by and large, fair, especially with the particular need for an expanded infrastructure to accommodate the fast-rising traffic growth in the region and to guarantee that Changi Airport remains relevant.
The reactions came in waves after officials from the Changi Airport Group (CAG) revealed that from July 1, passengers flying out from Changi Airport would have to pay S$47.30 — that’s S$13.30 more — in departure charges, which includes a new Airport Development Levy.
The levy, chargeable at S$10.80 for departing passengers and S$3 for transit passengers, is part of the resource-gathering efforts for the airport expansion plans, such as the new Terminal 5 and related infrastructure in Changi East
Airlines will also see an annual increase of 1% in their landing, parking and aerobridge fees until April 1, 2024.
IATA previously opposed to Singapore utilizing such a “pre-funding” model. Conrad Clifford, IATA’s Regional Vice-President of Asia Pacific, said that officials in the region gave the green light to go ahead with the proposal “despite the feedback provided by the industry”.
“The airline industry is against pre-funding for infrastructure projects,” Clifford said.
“It is unfair to expect passengers and airlines to pay in advance for a facility they may or may not use in the future when the facility is ready. It also goes against the International Civil Aviation Organization’s charging principle of cost relatedness, where passengers and airlines are charged for the cost of services actually used.”
Clifford added that “greater transparency” should be practiced on the expenses of the Changi East project and Terminal 5, as well as “how the costs are being apportioned between the Government, CAG, airlines and passengers”.
A spokesperson for Jetstar Asia relayed that the airline backs a “fit-for-purpose development of Changi Airport which the airport itself should fund.”
The spokesperson went on to say that 80% of the carrier’s airfares are priced under S$100. However, that could all change with the higher airport costs and the brand new tax that is being levied.
The Qantas spokesperson, meanwhile, remarked that the carrier is supportive of the development of Changi Airport. However, it said that the funds should not come from additional taxes that passengers would now have to be burdened with.