Changi rings in the changes
It is a time of significant milestones for South East Asia’s hub airport. Growth in passenger movements clocked 8% year-on-year in 2006, taking Singapore Changi Airport’s traffic past the 35m passenger mark. In that year Changi also recorded 25 worldwide best airport awards, including the top accolades from the World Travel Awards, Business Traveller and Skytrax.
In March, the airport celebrated the first anniversary of opening its $45m ($30m) Budget Terminal (capacity 2.7m passengers per year) by throwing a six-week-long Strike It Big shopping promotion from
February 5. The promotion offered an Amazing Shopping Challenge with travel prizes.
The Budget Terminal (BT) handled 1.37m passengers on Tiger Airways and Cebu Pacific flights over the year, and according to Wong Woon Liong, director-general of the Civil Aviation Authority of Singapore (CAAS): “Airport shop sales have also seen good growth, in tandem with our growth in passenger volume and supported by the various interesting and unique shopping deals organised by CAAS. Retail and food & beverage sales have increased by more than 80% and 60% respectively, compared to sales
performance a year ago.”
As for the main terminals, by 2008 there will be three instead of two, and alongside the new Terminal 3, both of the existing terminals will be sporting new livery. The upgrading of Terminal 2 was completed in mid 2006, at a cost of S$240m ($159m). The 16-year-old terminal now has a modern look with the use of greenery and glass to introduce more light, new escalators and architectural features.
The upgrading has also allowed for more space to be freed up for 15 new retail and 10 food and beverage outlets, stimulating a host of new concession activity last year.
Terminal 1 is next, with its upgrade starting in Q3 2007. Then, in early 2008, comes the new Terminal 3; a seven-storey, 380,000sqm building with a S$1.75bn ($1.15bn) price tag. Designed for an annual handling capacity of 20 million passengers, T3 will bring the total handling capacity of Changi Airport to 67 million passengers per year.
On the commercial front, more than 20,000sqm of floor space have been set aside for over 70 retail and over 30 food & beverage outlets. To complement the see-through layout concept of Terminal 3, the departure/transit mall is designed to provide a compact single shopping street layout that enhances the visibility of the retail outlets. The extensive use of glass in the terminal will allow passengers a vantage viewpoint of both the airside and landside shopping and dining zones.
All of this has led to a host of tenders, with retailers challenged to develop new concepts while vying for the existing concessions. The Terminal 2 renovation has expanded and revamped speciality store spaces, with awards of brand name shop concessions in April constituting the latest of these. CAAS announced that DFS Venture Singapore will operate an 86sqm Tumi store, Luxury Ventures a 60sqm Mercedes Benz outlet, and King Power a 41sqm Tie Rack store.
King Power also recently opened another Tie Rack store in downtown Singapore, and it wants to further explore Changi’s fashion opportunities for Antares – a new fashion concept honouring King Power managing director Antares Cheng – for which the retailer also opened a store in downtown Singapore.
Managing director for duty free and travel retail, Sunil Tuli, comments: “The Antares brand would provide a good concept for Changi, with attractive design, innovative products, good quality and, of course, very competitive pricing.”
Confectionery is another standout category at the airport. Focus Network Agencies, operator of The Cocoa Trees confectionery stores, reports a good year. Managing director Loo Lip Giam comments: “Total turnover for 2006 increased by 24%, and we registered a further increase by 25% in the first quarter of 2007.”
Now attention focuses on the massive liquor and tobacco concession due to be allocated in May, at which point tenders will be nearing finalisation for the fragrances and cosmetics concession (see box). CAAS is aware that the timing could be tricky amidst the international push to impose restrictions on the carriage of liquids, aerosols and gels (LAGs) in carry-on luggage. To address the issue, the airport authority is working closely with retailers and authorities in other countries. At the end of March, for example, CAAS introduced a regime of gate-delivery for liquor being carried on to flights bound to Australia, to comply with the new security rules brought in by that country. Keeping passengers informed and giving them the confidence to buy LAGs is part of the overall strategy. “CAAS is constantly updating its travel advisory on Changi Airport’s website to inform passengers of the restrictions set out by other airports and airlines, and the travel advisory also includes information on shopping at Changi Airport,” the spokesperson says.
Plasma screens at the airport’s departure hall and brochures at the departure/transit mall also update travellers on the new restrictions. The test for this year will be whether all of the activity in the new retail spaces will be sufficient to offset the impact on sales from the new restrictions. n
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