SINGAPORE. The Civil Aviation Authority of Singapore (CAAS) is introducing a S$70 million (US$46.3 million) relief package for its concessionaires to aid them during the current economic downturn, and to promote sales.
The package consists of S$43 million (US$28.5 million) in rental rebates and a new S$20 million (US$13.2 million) ‘Promotions Development Fund’ for retail, food & beverage and services concessionaires at Singapore Changi Airport, as well as another S$7 million in rental rebates for other airport partners.
These relief measures are effective from 1 January 2009 to 31 December 2009. They are in addition to the S$130 million (US$86.1 million) Air Hub Development Fund (AHDF) granted in December by the CAAS.
Crucially, retail, food & beverage and service concessionaires will receive a -15% rebate on basic/fixed rental, as well as a -7% rebate on additional rental. The CAAS will be notifying eligible concessionaires on the relief package that they will receive.
In all, CAAS will extend a total of S$50 million in rental rebates. This includes an estimated S$20 million (US$13.2 million) property tax rebate given by the Singapore government.
In addition to the -15% rental rebate under the AHDF, CAAS will give out an additional -5% in rental rebate for tenants of offices, airline lounges and warehouses at Changi Airport and Seletar Airport. This will benefit airlines as well other airport business partners such as ground handlers, airport concessionaires and cargo agents.
CAAS Director-General and Chief Executive Officer Lim Kim Choon said: “The global financial crisis has had an adverse impact on all our airport partners including concessionaires, with declining sales due to decreasing travel demand. General market sentiments expect the economic outlook to remain bleak, and passenger traffic will continue to experience a slowdown.
“We understand the increasingly tough business environment that our airport partners are currently going through. We are working very closely with them and are committed to providing the necessary assistance to improve their businesses. The relief package that we are providing will help to alleviate their financial burden in this difficult economic climate.”
COMMENT: These measures come as a timely and welcome boost to concessionaires who have struggled in recent months, following sharp declines in passenger traffic at Changi Airport since September.
The CAAS has traditionally been one of Asia Pacific’s more responsive landlords during times of economic hardship among tenants, and this move underlines its willingness to aid its key business partners. Concessionaires across all three major terminals have fallen victim to lower footfall and spend in recent months – spend that has been diluted by the opening of T3 a year ago.
The rental rebates will offer tenants some day-to-day relief during 2009 – and the S$20 million stimulus package in the form of a ‘Promotions Development Fund’ for retail, food & beverage and services concessionaires is another welcome move, one that the CAAS hopes will help prompt spending activity among passengers.
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