Advantages And Disadvantages Of Terminal 5

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Jolyn Peh Swee San (1501360J) Introduction Changi Airport is one of the world’s busiest airports in terms of international passenger and cargo traffic. Being one of the largest transportation hubs in Southeast Asia, there are over 100 airlines provided for passengers to travel to 320 cities globally. As of now, the airport ownership models adopted by Terminal 1 to 4 are government owned with decentralised control. However, it is yet to determine the best ownership model for Terminal 5. The new terminal, Terminal 5 will be one of the biggest expansion project and by the time it is ready, the total number of passengers the five terminals can handle will increase to 135 million passengers in a year. The objective of my proposal is to come out…show more content…
Before deciding on which of the airport ownership model is suitable for Changi Airport Terminal 5, I will be weighing the pros and cons of each ownership model in the following paragraphs. Government owned and control The government owned and control is one of the most traditional form of airport ownership model, whereby the government has full ownership and direct control of the airport. Under this ownership model, the airport will be managed by the central government agencies, such as Civil Aviation Authority (CAA) or Ministry of transport (MOT). The pros for such airport ownership model includes: - The airport facility will not be operated mainly for commercial purposes, but, also on other objectives such as providing more job opportunities for more people and prioritising safety for airport. - The airport will be able to receive more subsidies from the government when engaging social objectives. The cons for such airport ownership model includes: - Airport will be less efficient and have a poorer economic performance compared to airports that are privately owned. - Continuous rise in the cost of investment in airport, resulting in higher tax cost for taxpayers. - Providing customer service that is not up to…show more content…
Under this ownership model, the private operators are actively involved in the management through a management contract. The government is able to grant a concession to a private partner through either a Build Operate Transfer (BOT) scheme or a Build own operate (BOO) scheme. Under Build Operate Transfer (BOT) scheme, the private operator will either build or modernize a facility and operate it for a few years. While on the other hand, under the Build own operate (BOO) scheme, the private operator will build, operate and owns the facility eternally. The risk and rewards will be shared between the public and private

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