Gateway to Singapore: Changi Airport

Gateway to Singapore: Changi Airport

Background

Airports are “a vital part of a country’s transport infrastructure on which its economy, trade, and business depend.” Changi Airport Group operates and manages the highly recognized and world-renowned Singapore Changi Airport. Currently the world's sixth busiest international airport, Changi Airport has grown into a major air hub in Asia. The various flight routes connect Singapore with 270 cities in 60 countries with the support of more than 100 international airlines. Every 90 seconds, a flight departs from or lands at Changi Airport. Passenger traffic at the airport exceeds 53 million people annually, roughly 10 times the population of Singapore.

Changi Airport is not an ordinary airport and is known for its unconventional amenities. It has a comfortable and clean environment and boasts superior customer service. There are 350 retail stores and 120 restaurants inside the airport’s three terminals, which accounts for a total business area of roughly 750,000 square feet and 50% of the airport’s revenue (S$2 billion in 2013). To name a few unique amenities, there are free movie theatres, napping and lounge chairs, karaoke studios, showers, prayer rooms, playgrounds, events for families and children, and gardens housed within the airport, among many other things. It is viewed “not just as Singapore’s gateway to the world, but also the world’s gateway to Singapore.” This all makes Changi airport a travel destination rather than merely a transportation hub.

When the airport began operations in 1981, Terminal 1 was able to accommodate 12 million passengers on an annual basis. Constant advancements and improvements now permit Terminal 1 to support a maximum capacity of 21 million passengers a year. In 1990, Terminal 2 opened with a capacity to support 12 million passengers annually and was later expanded in 1996 to be able to support 23 million passengers a year. In 2000, construction on Terminal 3 began, which ended in 2008. This additional terminal allowed the airport to support yet another 20 million passengers annually. The sheer volume of passengers that Changi Airport can support at maximum capacity is truly phenomenal. Currently, there are a total of three passenger terminals at the airport and at maximum capacity can provide services to more than 67 million passengers on an annual basis. A fourth terminal is currently in development, slated to open in 2017, and a fifth terminal is scheduled to be completed in 2023. This will allow for even more passenger support at Changi Airport in the future.

Since 1981, operational efficiency and passenger experience have continuously been strong points that have earned the airport over 400 excellence awards. In 1988, the airport received its first “Best Airport in the World” accolade. In 1993, Changi Airport began to be utilized as a model for airports around the world. Consulting services are provided by Changi Airport Group, the company who owns the Singapore airport, to other airports globally. Changi Airport Group invests and is a stakeholder in airports around the world, which generates additional revenue and allows the successful guiding principles of the airport to be applied to other global locations. The airport is still one of the most highly regarded airports in the world, consistently wins awards and is often featured in publications.

Supply Chain Strategies

From a strategic perspective, Changi Airport offers many effective and unique solutions that contribute to its supply chain success. It is one of the most cost-efficient airports in the world.

Role as an Integrator

• The Changi Airport Group (CAG) was formed to handle all business operations of the Singapore Changi Airport. This means that the airport has few of its own employees, and contracts its services and labor via CAG.

• CAG acts as an integrator that coordinates and oversees the operations of many entities at the airport including, but not limited to: personnel, airport management, air hub support and development, commercial-generating revenue support, as well as corporate and finance functions.

• From a supply chain perspective, CAG partners with global airline leaders, such as Singapore Airlines, to capture shared cost synergies, control quality and transfer knowledge between organizations.

• CAG provides contract services to other airports which allows Changi Airport’s successful business model to be applied to other locations, leveraging larger economies of scale whenever possible, while also setting a new operating standard for airports around the world.

Leveraging