IATA has expressed its disappointment over the additional fees that Changi Airport will charge passengers and airlines to fund the development of Changi East and T5 project.

Starting July, the Changi Airport Group (CAG) will adjust existing passenger and airline fees, while the government will introduce an Airport Development Levy.

CAG announced that Passenger Service and Security Fee (PSSF) for all passengers departing from Singapore Changi Airport, presently S$27.90 (US$21), will increase by S$2.50 per annum starting on July 1 this year, with the last increase on April 1, 2024. This year marks the mid-point of the estimated construction phase of the Changi East project.

There will be no change in the PSSF levied on transfer/transit passengers, who now pay S$6.00 when departing.

Meanwhile, the government is adding an Airport Development Levy – S$10.80 for passengers beginning their flights at Singapore Changi, and S$3 for transit passengers.

IATA yesterday issued a statement expressing the airline industry’s opposition to what it calls a “pre-funding” for infrastructure projects. It also pointed out that the decision to pre-fund was made despite industry feedback.

“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,” said Conrad Clifford, IATA’s regional vice president, Asia-Pacific.

Justifying the PSSF adjustment, CAG said: “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. This cap will be reviewed if the competitiveness of Singapore air hub is adversely impacted.”

CAG added that funding for Changi East will come from three parties – the Singapore government, CAG and airport users (including airlines and passengers). The Singapore Government will fund the majority of the project’s development cost. CAG has invested S$3.6 billion to date, and will commit a substantial portion of its reserves and future surpluses, including earnings from its airport concessions, to the development.

But this is not enough to show how the cost are apportioned between all three parties – including airlines and passengers – IATA countered, calling for greater transparency on the funding model.

“Aviation is an economic catalyst and the added capacity does not just benefit the aviation community, but the entire Singapore economy. Making air travel more expensive for passengers will have a negative impact on travel, tourism, and as a result aviation’s contribution to an economy. Increasing charges for airlines could also affect the financial viability of their services to and from the airport,” Clifford pointed out.