Passengers traveling through airports in the Asia-Pacific region should prepare for higher charges as airports seek to fund necessary upgrades. With air traffic in the region expected to double over the next two decades, significant investments in infrastructure are required to meet future demand. The Airports Council International (ACI) Asia-Pacific and Middle East, representing over 600 airports, has highlighted the need for approximately $1.7 trillion in airport investments by 2042.
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Stefano Baronci, the director-general of ACI Asia-Pacific and Middle East, emphasized that to attract the necessary resources, airports must cover their costs, which often means increasing charges. He noted that while international airport charges in the region have remained relatively steady since the COVID-19 pandemic, the need for infrastructural improvements necessitates higher fees. These charges are essential to fund new terminals, runways, and other critical infrastructure to handle the anticipated surge in passenger traffic. Many airports worldwide have already raised passenger fees or plan to do so. For instance, Malaysia increased its service charge for passengers flying to other ASEAN countries from RM35 to RM73 in June. Similarly, six Thai airports raised passenger charges by 30 baht in April to fund new automatic check-in and baggage drop-off counters. Closer to home, Seletar Airport in Singapore raised its fees and charges for both passengers and aircraft operators in July. Changi Airport also increased its fees and levies in November 2022, with the current total charge for departing passengers set at $65.20 until March 2025. This includes an airport development levy introduced in 2018 to help fund new infrastructure, such as the upcoming Terminal 5.
Baronci sought to downplay the impact of these charges on airfares, arguing that other factors like demand patterns, supply, and price elasticity play a more significant role in determining ticket prices. He pointed out that airfares in Singapore have decreased as airline seat capacity recovered, with fares now about 7% higher than in 2019, compared to over 20% higher during the pandemic's peak. He also mentioned that high competition at airports like Changi helps control airfares, as airlines strive to remain competitive.
The anticipated growth in air traffic is driven by the region's vast population and untapped demand for air travel. In 2019, North Americans averaged more than two trips per year, while Europeans averaged over one and a half. In contrast, the figures were significantly lower in Asia, with China at 0.5 trips and Malaysia, the Philippines, and Vietnam at under 0.4 trips. As the region's economies grow and more people travel, the demand for air travel is expected to rise sharply. In conclusion, passengers in the Asia-Pacific region should expect higher airport charges as airports invest in the necessary infrastructure to accommodate future growth. While these charges may seem burdensome, they are crucial for ensuring that airports can meet the increasing demand for air travel and provide a high level of service to passengers.