Singapore’s aviation sector a ‘bright spot’ as air passenger traffic hits record 68.4 million: Chee Hong Tat
The sector is a growth engine that can enable growth in other sectors and even the region, the transport minister
[SINGAPORE] With air passenger traffic reaching an all-time high of 68.4 million for the year ended March 2025, the Republic’s aviation industry remains a bright spot amid global turbulence and uncertainty, said Transport Minister Chee Hong Tat on May 7.
Air cargo reached 2 million tons for the period, up 11 per cent year on year, he told reporters at a visit to the Airbus Singapore Campus.
“We are now looking at how to further build on this momentum,” he said.
He noted that the industry’s employment situation has been “quite positive”, with key companies such as Changi Airport Group, Singapore Airlines and Sats continuing to hire and expand across a variety of jobs, from commercial roles to flight crew and ground handling.
The industry employs about 36,000 people in Singapore.
Noting the previously-announced S$1 billion set aside by the Civil Aviation Authority of Singapore, Chee said that the government will discuss with industry partners, “including Airbus and others”, on how this funding can be used to support their growth in Singapore.
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The fund covers connectivity, infrastructure, innovation and technology, and manpower.
Aviation is a sector that is being examined by the Singapore Economic Resilience Taskforce – alongside the maritime, supply chain and logistics sectors – for further growth and future opportunities, he added.
Chee co-leads the taskforce’s workstream on “longer-term strategies and responses” with National Development Minister Desmond Lee.
Industry observers previously noted that with US tariffs likely to dampen trade and growth, air freight demand might weaken and consumers may spend less on travel. But they also stressed that Singapore retains advantages.
Anand Stanley, Airbus’s president for the Asia-Pacific, said: “Singapore is the regional hub for Airbus in this key market for aviation. It offers superior connectivity, a skilled labour force and benefits from the support that the government provides for international companies wishing to establish operations here.”
“We look beyond the current turbulence and share the minister’s optimism,” he added. “In the long-term, the prospects for this region and Singapore are extremely positive.”
On Wednesday, Chee was visiting the Airbus facility for the first time in his capacity as transport minister. The facility, which is the French aircraft manufacturer’s regional headquarters, houses the Airbus Asia Training Centre, which serves more than 90 airlines, and its spare-parts distribution facility.
Supporting other sectors and the region
Recapping how upcoming developments will increase cargo capacity and air connections, Chee added that the air hub is not just an important sector on its own, but is a “key enabler” that supports other sectors such as professional services, manufacturing and financial services.
The Republic’s aviation industry can also support the region. As global aviation growth boosts demand for training, Singapore wants to provide training capacity not just for its own needs, but to support the region, he said.
He added that while a manpower study is underway, the initial sense is that the industry will have to use technology and redesign jobs for greater productivity, especially as the workforce ages.
Asked how Singapore’s aviation industry can prepare itself for the effects of US tariffs, Chee gave examples of “no-regrets moves” such as strengthening partnerships in the industry, increasing efficiency through technology, and upskilling workers for new and better roles that are created.
“We have no doubt at all that this new global environment will be more difficult, because it calls into question some of the earlier arrangements that we have with free trade, with free movement of cargo, with free flow of capital,” he said.
But even as things become more challenging, Singapore should not be overly pessimistic, he added.
“We do have value that we can bring to the table, building on our strengths: our ability to plan long-term, our pro-business and stable environment, our trusted brand name, and I think, importantly, our strong tripartite partnership.”
Silver linings in a storm
Even in the approaching economic storm sparked by US tariffs, Singapore’s aviation sector can count on a few silver linings, said observers.
US President Donald Trump has delayed higher tariffs on certain trading partners, but if these still materialise after the current 90-day pause, companies might reroute cargo through countries with lower tariffs – such as Singapore, which mainly faces the baseline 10 per cent tariff.
Beyond that, Singapore’s position as a regional air hub is a strategic advantage that will not change and continue to draw traffic, cargo and aviation-related businesses.
A senior aviation insider who spoke on the condition of anonymity said that aviation demand has been quite resilient to shocks over the long-term. With the Asia-Pacific being one of the fastest-growing and largest demand markets in the world, the “long-term outlook is positive, especially for the aerospace industry situated here.”
In particular, Singapore’s strategic advantage should bolster the maintenance repair and overhaul (MRO) segment of aviation, said Stephen Chen, director of aviation consultancy BIMC.
“With around six hours of flight time to anywhere from India to Australia, Singapore is a priority service centre for the Asia-Pacific, and that means the MRO business will be stable in the long term,” he said.
Singapore’s quality-control standards are also among the highest in the region, with its industry being one of the few that can meet stringent aerospace standards, he added.
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