Singapore Airshow 2018: Iata flags concerns about infrastructure constraints in Asia, pre-funding of Changi's Terminal 5

INFRASTRUCTURE remains the biggest bottleneck in this part of the world amid growing passenger traffic, said the head of an airline association, but warned against pre-funding of infrastructure projects.

The International Air Transport Association (Iata) chief Alexandre de Juniac stressed concerns about rising costs, pointed to Changi Airport's expansion plans as one example. This follows an earlier Straits Times report that there are plans to introduce a tax on passengers to fund the construction of the upcoming Terminal 5 (T5).

"We must ensure the plans for T5 are robust enough to meet the high standards of airline operations and passenger convenience (that) users of Changi Airport have come to expect," said Mr de Juniac, speaking at the Singapore Airshow Aviation Leadership Summit (SAALS) on Monday morning.

"We need to get the funding model right to avoid burdening the industry with extra costs."

On the other hand, there are other airports such as Seoul's Incheon, which have added runway and terminal capacity without increasing charges for airlines and passengers.

He said: "There are worrying trends, which are increasing costs. One of these is airport privatisations. We have not found the correct regulatory framework to balance the interests of the investors to turn a profit, with the public interest for the airport to be a catalyst for economic growth. All the optimism supporting strong aircraft orders will mean nothing if we don't have the capability to manage traffic in the air and at airports."

Airports in cities such as Jakarta, Bangkok and Manila are adding capacity to deal with capacity constraints, but it is not being built fast enough to meet growing demand. Decisions about new infrastructure has to be made now to cater to the burgeoning number of passengers in the region, he highlighted.

Iata estimates that by 2036, this region will see 3.5 billion trips, nearly half of the 7.8 billion people expected to travel worldwide. Much of this will be driven by China, which will emerge as the single largest aviation market by 2022.