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AVIATION, SINGAPORE

“Sky’s the limit for ASEAN” says airport chief

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Interview - October 17, 2018

In an interview with Worldfolio, Changi Airport Group CEO Lee Seow Hiang discusses the potential of ASEAN, and the pivotal part the aviation industry has to play in this regional transformation

 

LEE SEOW HIANG, CHANGI AIRPORT GROUP CEO
LEE SEOW HIANG | CHANGI AIRPORT GROUP CEO

One of the key competitive advantages of Singapore has always been its geographical location. What is the potential of ASEAN and what should people expect from it in the coming years as Singapore has assumed chairmanship?

The sky's the limit. I must say that since I'm in aviation. ASEAN has been present for fifty-one years now since 1967. The total GDP combined was about 23 billion USD in 1967 and now it's a hundred times, 2.5 trillion.

We went through a history that is not exactly without challenges and despite that, we have grown a hundred times. This is also a region of deep diversity. One could argue that we are probably the most diverse region in the world. You have three or four great civilizations converging in a fairly small geographical space.

For us, we take that diversity for granted. But today, with all kinds of debates over immigration around the world, the fact is that we have been facing waves of diversity in this place for the last fifty years. And it did not tear us apart. Somewhere in there, ASEAN played a key role in providing peace and prosperity across the region.

So, what do I hope for ASEAN? Peace and prosperity. We need that before we can talk about aviation growth. We had that in the last fifty years and going ahead, if we can keep peace and prosperity, there’s no reason why we cannot enjoy even greater dividends of growth.

 

Talking about further integration through the AEC 2025 and the aviation sector, there is a lot of talk about ASEAN Single Winow (ASW). How important is it for the transport sector to support growth in ASEAN, to better support the growth between countries?

I'll say it is symbiotic. On one level it is derived demand - transport grows because underlying economies grow. For a region with such deep diversity, we are active contributors to economic growth too. With deeper connectivity, people understand each other better and find opportunities for businesses. Given the state of urbanisation in Southeast Asia, the potential to trade among ourselves will be far more than it was in the first fifty years of our history as ASEAN.

And there are forces in our favour. Southeast Asia has a growing population of well-educated youths. More than 50% of those youths are already living in urban centres and the number of urban centres will continue to grow in ASEAN. All these are key ingredients of growth for businesses, and with businesses growing, so will aviation. There is a symbiotic relationship between GDP growth and aviation. We’ve already seen that historically in ASEAN, where connectivity across major cities has tripled in last 10 to 15 years.

 

Within your analysis of the CFE and the ITMs, what do you believe people outside of Singapore should expect from this transformation?

The CFE represents a deep desire on Singapore's part to climb up the value chain. At the same time, it is also driven by certain unique constraints that we have, namely manpower. In aviation, we see tremendous growth, but we know we would have to achieve it in a way that delivers much higher levels of productivity across the sector. Aviation is by nature high-tech and relatively high value add, so it would be mind-boggling to reach the next level of productivity and technology. If we can go beyond that, to reach the next level of productivity and technology, it would also mean better paying jobs.

In Terminal 4, the introduction of our Fast and Seamless Travel (FAST) initiative, which features automated check-in systems, was not just about beautiful looking machines. FAST changes the way you travel, and you can now literally check in and step on to the plane without having to be served by a physical human. And we do it without loss of the taste of service. There is a massive jump in manpower productivity, but this need not be at the expense of hospitality. If we can find more ways of achieving higher productivity, we will be able to grow two Changi Airports for instance, without doubling our manpower.

In fact, that is exactly our intention. About 50,000 people make this place work today. We think we can achieve a jump of maybe 1.2 times in manpower when we have two ‘Changis’. That is what we are aiming for. It is not easy, because it means reinventing the way we serve passengers, and some of these solutions require the introduction of brand new technologies and reinventing processes with new protocols.  It is exciting because many start-ups today are coming up with great technologies, and airports can be great platforms for start-ups to create new possibilities.

 

Changi Airport hosted 62.2 million passengers and more than 2 million tons of cargo in 2017, while doing that maintaining the best airport in the world title for six years. How have you been able to  update yourself to stay most competitive?

The growth comes because Asia is growing. Singapore has reinvented itself as a nation constantly to remain relevant to the region and to the world. This gives us a certain platform for growth. We have always seen the airport as a kind of gateway to the country. It was more than just a functional transport stop for us. We always wanted the airport to be more than just a bus stop in a sense that it leaves you with memories, because we knew this was a gateway to the whole nation.

In the early days, the airport was also a proxy of confidence that this place works. If we are ready to serve you at the airport, we are ready to serve you wherever you are in Singapore. If you are a business deciding to choose a base in Singapore, you can trust us to run the mile to service you, so that if you succeed, we succeed together. That was how we started. The ethos of service was deep right from the beginning and we were a proxy for that mentality.

We also knew how to grow the hub through both the strength of Singapore's economy and the service provided to passengers who had other alternatives. We made sure that we are the compelling choice for them. Otherwise, they could transit in many other points available across Asia. That kept us sharp.

Internally, the community spirit we built was also a secret edge for us. We needed to make all staff think as one and feel as a passenger. Many airports struggle to get this right because they depend on a series of partners, like the government agencies, commercial entities or SMEs with different business mission and objectives. How do we make everyone come together as on ‘One Changi’? It doesn’t happen naturally.

 

As an international business, considering your growth-target, what is the impact of that connection between the US and Singapore for Changi Airport Group?

More direct links between ASEAN and in Singapore's case, Singapore to US, will be tremendous for businesses as it makes an impact for businessmen who are connecting between the US and Southeast Asia. We had that service in the past with the old 340s and it was a guzzler - four engines and expensive oil price. That combination made it very hard for Singapore Airlines to sustain that non-stop link. We know it works from a passenger point of view; the challenge was making it work in a way that is viable for the airlines. But with the new air craft type that is available now, the 350s, there are two advantages. One of which is the twin engine and a far more efficient aircraft. It is now much more viable for Singapore Airlines to be able to sustain such a route, as it is for United Airlines to fly direct to us. And the 350 Airplane is part of the overall regular fleet of Singapore airlines, which also means that they do not require a dedicated pilot crew just for this non-stop flight. It is the same for United Airlines which is running on the 787dreamliners, which also serve their domestic points.

From an airline point of view, it is a lot easier to manage costs. This is a game changer because now we have a product that proves to work for passengers, as well as the airlines. With the economies in Southeast Asia booming and the US on the growth path for the last six years, there will be many more opportunities for businesses to connect, if this trend maintains.

 

What impact do you expect from Jewel on the hub status of Changi airport and of Singapore within the entire Asia Pacific region?

Jewel is a very small piece of land, only three hectares. But we have very big dreams for this project even though it is a very small plot of land. We think it is a unique product that can hit multiple objectives. At a basic level, it gives us sure capacity and helps us to expand Terminal 1.

At the same time, it is also an attempt to add a tourist attraction in the heart of the airport. It is something that we have not really done in the past. We have worked with tourist attractions in Singapore, but space is tight in Singapore.

However, we think that the more tourism options we have, the more compelling we will be as an aviation hub. Since we are developing this plot of land, why not invest a bit more to see whether we could curate something to add to the tourism allure that we have in Singapore. We are confident that Jewel will be an exciting proposition for families and even the young at heart, and we see it working as we are getting invites from even travel agents around the world asking about the product.

At the same time, it is meant to be a quality space for Singaporeans and the airport community to come together.  Jewel also adds capacity for us to serve tourists who are underserved in several ways. For instance, when you arrive early in the morning, hotels tend to be available only mid-day. Even shopping areas downtown are not open till around 10 or 11am. Where do you go? Here, we have a 24/7 space that people could just leave their bags, have a coffee, breakfast or even an experience that was never thought possible in a country.

There will be sizeable segments of shops that will serve in the early morning and late at night. When you need to check out at noon time, and many of our flights to Europe are in the evening, you can come much earlier. With the FAST system, we can drop your bag even if you come eight hours ahead of time, and have an early check-in. There are endless possibilities of entertainment, like watch a movie, or just spend time with your friends or families before you travel.

We will also have special lounges within Jewel to serve the fly-cruise segment. Cruise is a segment that is under developed in Southeast Asia. It is well established in the US and Europe, and in the last five years, we’ve seen promising trends of growth for cruises in Asia, particularly in Southeast Asia where the experiences offered are very different. The cruise sector is an area I am hoping ASEAN can work together more. It is a tourism product that has potential for growth, with scope for innovation.

 

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