Tuesday, December 9, 2008

Bangkok airport mess spilling into Changi

Dec 8, 2008

Falling air traffic to Thai capital likely to hurt S'pore aviation sector

By Karamjit Kaur

IT MAY be reasonable to suppose that Changi could profit from the mess at Suvarnabhumi Airport.

The reopening of Bangkok's flight hub may have brought relief for an estimated 400,000 passengers, including 100,000 foreign tourists who were stranded in the city during the shutdown. But for how long?

Airlines, bleeding money while the protesters protested, may steer clear of considering Bangkok as a base for operations, and could look elsewhere in the region.

It could be a long while before the 'land of smiles' welcomes back those who were stranded in Bangkok - if at all. Singapore, Bangkok's fiercest competitor, could become the safe haven.

But the rub is that the connectedness of travel today means that Singapore will not be spared the fallout from Bangkok's temporary closure.

Changi sees more passengers to and from Bangkok than any other destination. Not only that, it also sends millions of passengers in transit through the Thai capital. All that traffic may take a hit.

Already, Thailand's political unrest since September has kept tourists away, with some travel agents here reporting an 80 per cent drop in bookings to Thailand till end-December, compared with the same four month period last year.

The airport siege will hammer in the last 'nail in the coffin', said aviation analyst Shukor Yusof at Standard & Poor's Equity Research.

'It's shocking that thousands of people can just descend on the airport and shut it down,' he said.

So the jinx which seems to dog Suvarnabhumi persists. Its September 2006 opening was delayed by over a year. When it finally opened, passengers were greeted by long luggage delays and leaky ceilings.

As if that were not enough, the airport, which was built to handle 45 million people, suffered congestion during peak hours.

Professor Wee Chow Hou of Nanyang Technological University's College of Business said: 'The airport already suffered a bad reputation when it first opened. What has happened since has made its reputation even worse. What assurances are there that the airport will not be occupied by protesters again?'

Economists are predicting a gloomy year ahead for Thailand. The tourism sector could lose up to $6 billion in revenue - a sum equivalent to 1.5 per cent of Thailand's gross domestic product - and visitor arrivals next year could be half the 13.5 million expected for this year.

The protesters' hijack of the airport will also affect its status as an international hub. That too could have an adverse impact on the fortunes of Changi and other airports in the region.

Bangkok's airport welcomed 41.2 million passengers last year, of whom more than 33 million were international travellers. It is connected to more than 180 cities in nearly 70 countries.

Singapore's Changi is a key player in that web of connections.

There are 303 flights a week between Singapore and Bangkok, the third-busiest route out of Changi after Kuala Lumpur and Jakarta.

In terms of passenger numbers, the Singapore-Bangkok market is the busiest, with 2.29 million passengers flying the route in the first 10 months of the year, compared with 2.1 million for Singapore-Jakarta and 1.5 million for Singapore-Kuala Lumpur.

Changi is also a significant partner of Suvarnabhumi.

Data compiled by Airports of Thailand (AOT), which owns and runs Suvarnabhumi, shows that Changi was the top contributor of international passenger traffic to Bangkok last year. It sent 2.9 million people through the airport, almost 9 per cent of the total traffic.

In second spot was Hong Kong with 8.2 per cent of the pie, or 2.6 million passengers.

Cargo to and from Singapore also made up 9 per cent of the total, at 106,841 tonnes.

With such close ties, Changi will probably be hurt if travellers and airlines shun Bangkok, especially at a time when the aviation business is already suffering a slowdown.

Furthermore, Asia tends to be viewed by leisure travellers as a single destination, with Singapore, Malaysia, Thailand and other countries in the region often bundled together in a single journey.

Travellers will now 'think twice' before heading to this part of the world, following the Bangkok crisis as well as the recent terrorist attacks in Mumbai, India, said Associate Professor Lee Der-Horng from the Centre for Transportation Research at the National University of Singapore.

Changi could conceivably benefit from Suvarnabhumi's fall from grace, as an international hub with zero domestic traffic thriving on good connectivity. But Singapore is more likely to be hurt by Bangkok's poor fortunes.

Globalisation does mean we are subject to the misfortunes of others.


[We are in this together.]

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