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SINGAPORE. Concession sales at Changi Airport in the fiscal year 2011-12 (April-March) reached S$1.75 billion (US$1.4 billion) for the first time, representing year-on-year growth of +19%. That increase is well ahead of that of traffic at Changi, which grew by +11.6% to 48 million during the period.
The figures were announced by airport operator Changi Airport Group (CAG) at a press briefing during the TFWA Asia Pacific show, taking place this week in Singapore.
At the briefing, CAG Executive Vice President – Commercial Lim Peck Hoon and Senior Vice President for Airside Concessions Ivy Wong also revealed details of the planning for Changi’s new Terminal 4, set to replace the Budget Terminal which closes in September. The new facility is being built to ensure Changi has the capacity to meet forecast traffic growth, especially given the rapid increase of low-cost traffic at the Singaporean hub.
T4 will have a capacity of 16 million passengers annually, and although the terminal will have some characteristics of a facility designed for low-cost carriers (LCCs) – it will feature no aerobridges, for example – T4 will boast a much broader range of retail and F&B outlets than is currently present in the Budget Terminal. Changi is yet to complete the planning for T4’s commercial layout, but Lim confirmed that it will be comparable to the standards CAG has set in its other terminals.
“Passengers are looking for a better experience no matter which terminal they are flying from,” she said. “They expect the same Changi experience that they get in our other terminals. Our research shows that as far as customer behaviour is concerned, it’s not the carrier type, but the [geographic] sector that counts.”
To illustrate that point, Wong revealed that in some LCC passengers at Changi have a higher average spend than those on full-service routes to some markets, such as Australia, Hong Kong and Taiwan. Chinese routes served by LCCs generate sales per passenger that can be more than triple those of full-service passengers on Malaysian routes, and more than double those on full-service flights to Indonesia.
Average spending among LCC customers at Changi in the 6 months between October 2011 and March 2012 grew by +24% year-on-year, compared with spending growth of +7% among full-service passengers over the same period.
The construction of T4 will begin in 2013 and the terminal is scheduled to open in 2017, three years after the expiry of Changi’s core category concessions, operated by Nuance-Watson (perfumes & cosmetics) and DFS (liquor & tobacco).
So far in 2012 traffic at Changi is up by +13%, with concession sales growing by about +20% year-on-year. CAG stated that its commercial priorities for the remainder of the year are to grow sales among high-spending passengers; to build on its growing programme of retail promotions, including the third Be a Changi Millionaire initiative, whose 2012 edition was launched earlier this month; and to ensure the retail mix remains fresh with the addition of new brands and concepts.
• Read much more about Changi Airport in our special publication, Changi Airport: 30 years of excellence, distributed with the May issue of The Moodie Report Print Edition and available free of charge online now.
