Customers to shoulder rising cost of airport expansion, IATA chief warns

Singapore’s plans for its hub airport include a new development due to open next year featuring a 40-meter high indoor waterfall, and a fifth terminal slated for 2030. Above, the newly-opened Terminal 4 of Changi Airport. (AFP)
Updated 05 February 2018

Customers to shoulder rising cost of airport expansion, IATA chief warns

SINGAPORE: The “skyrocketing” costs of expanding airport infrastructure must be controlled to keep flight tickets affordable, the boss of airline industry group IATA warned Monday.
Alexandre de Juniac called for more modest developments to keep construction costs down and avoid landing customers with higher prices, which would hit demand.
De Juniac cited the proposed £14 billion cost of a third runway at London’s Heathrow Airport and the construction of a fifth terminal at Changi Airport in Singapore as prime examples of vastly expensive projects.
“The cost of infrastructure is skyrocketing,” he told reporters ahead of the Singapore Airshow this week.
“When we look at the numbers of Heathrow for the third runway, we are very, very, very worried. Even the numbers for T5 in Singapore are very high,” he added, without disclosing a figure for Changi Airport’s expansion.
The city-state’s plans for its hub airport include a new development due to open next year featuring a 40-meter high indoor waterfall, and a fifth terminal slated for 2030.
“We would like for instance to avoid big projects in which we see overruns because the architecture is fantastic, wonderful but it’s very costly... we have to be more modest,” De Juniac said without naming any airport.
Airport construction costs are rising to levels, which are too much for airlines to bear, he added.
“Someone will have to pay for that... They will have to put that on the tickets, and then if it’s too high it could harm the level of demand,” he said.
IATA is working with authorities at Heathrow and Changi to manage costs and called on governments to involve airlines from the beginning of projects.
Heathrow has proposed trimming expansion costs by £2.5 billion with measures such as building a sloping runway and staging construction.
De Juniac said 7.8 billion people are forecast to fly worldwide by 2036 — with nearly half of passengers flying to, from, or within Asia Pacific — up from an expected four billion in 2018.
Passenger growth will far outpace development of infrastructure like airports and air traffic control systems, he said.
“I believe that... we are headed for a crisis. Infrastructure in general is not being built fast enough to meet growing demand,” he said.
“All the great plane deals that will be done at this air show will mean nothing if we don’t have the capacity to manage the traffic in the air and the airports at each end of the journey.”


Trump calls for World Bank to stop lending to China

Updated 07 December 2019

Trump calls for World Bank to stop lending to China

WASHINGTON: US President Donald Trump on Friday called for the World Bank to stop giving loans to China, one day after the institution adopted a lending plan to Beijing over Washington’s objections.
The World Bank on Thursday adopted a plan to aid China with $1 billion to $1.5 billion in low-interest loans annually through June 2025. The plan calls for lending to “gradually decline” from the previous five-year average of $1.8 billion.
“Why is the World Bank loaning money to China? Can this be possible? China has plenty of money, and if they don’t, they create it. STOP!” Trump wrote in a post on Twitter.
Spokespeople for the White House and the World Bank did not immediately respond to requests for comment.
The World Bank loaned China $1.3 billion in the fiscal 2019 year, which ended on June 30, a decrease from around $2.4 billion in fiscal 2017.
But the fall in the World Bank’s loans to China is not swift enough for the Trump administration, which has argued that Beijing is too wealthy for international aid.