CAAS to Give Out a Total of S$200 Million to Assist Airport Partners Tide Over Economic Downturn
12 February 2009
CAAS introduces additional S$70 million relief package in addition to S$130 million Air Hub Development Fund announced earlier
The Civil Aviation Authority of Singapore (CAAS) is giving out a total of S$200 million in 2009 to help airlines and airport partners tide over the current economic downturn. This comprises a S$63 million relief package consisting of rental rebates (S$43 million) and a newly set up 'Promotions Development Fund' (S$20 million) for retail, food & beverage and services concessionaires at Changi Airport, as well as another S$7 million in rental rebates for other airport partners. These are in addition to the S$130 million Air Hub Development Fund (AHDF)1that CAAS has recently extended to airlines and airport partners. The rental rebates, which include the Government's property tax rebate2, far exceed the Government's rebate which CAAS is passing on fully to airport partners. These relief measures are effective from 1 January 2009 to 31 December 2009, similar to the AHDF.
In all, CAAS will extend a total of S$50 million in rental rebates. This includes an estimated S$20 million property tax rebate given by the Government under Budget 2009. The rental rebates are as follows:
- 20% rental rebate
In addition to the 15% rental rebate under the AHDF, CAAS will give out an additional 5% in rental rebate for tenants of offices, airline lounges and warehouses at Changi Airport and Seletar Airport. This will benefit airlines as well other airport business partners such as ground handlers, airport concessionaires and cargo agents.
Retail, food & beverage and service concessionaires will receive the following rebates:
- 15% rebate on basic/fixed rental
All concessionaires at Changi Airport pay a basic/fixed rent based on the location and size of their outlets.
- 7% rebate on additional rental
In addition to the basic/fixed rent, the majority of concessionaires pay additional rental, which is a variable component that pegs rental charges to either their monthly sales or passenger traffic at Changi Airport.
CAAS will be notifying eligible concessionaires on the relief package that they will receive.
Promotions Development Fund
Besides the rental rebates, CAAS has also set up a new S$20 million Promotions Development Fund to support the airport's as well as the retail, food & beverage and service concessionaires' promotional initiatives to drive sales at Changi Airport. Passengers passing through Changi Airport can look forward to greater shopping value with more Changi Shopping vouchers given out to encourage shopping at the airport through a slew of airport-wide shopping promotions that CAAS has lined-up for the rest of the year.
Cargo Incentive Scheme
CAAS has made an enhancement to the AHDF to include a Cargo Incentive Scheme. Under this scheme, CAAS' warehouse and office tenants in Cargo Agent Buildings C, D, E and Megaplex within the Changi Airfreight Centre will receive, on a quarterly basis, cash payouts of S$10 per tonne of cargo handled in that quarter, up to an amount equivalent to 15% of their warehouse and office rent for that quarter. This is to provide cargo agents with further relief and to drive air cargo performance at Changi Airport.
Mr Lim Kim Choon, CAAS Director-General and Chief Executive Officer, said, "The global financial crisis has had an adverse impact on all our airport partners including concessionaires, with declining sales due to decreasing travel demand. General market sentiments expect the economic outlook to remain bleak, and passenger traffic will continue to experience a slowdown. We understand the increasingly tough business environment that our airport partners are currently going through. We are working very closely with them and are committed to providing the necessary assistance to improve their businesses. The relief package that we are providing will help to alleviate theirfinancial burden in this difficult economic climate."
Note:1The Air Hub Development Fund (AHDF) was first set up at a budget of S$210 million for a 3-year period beginning from 1 January 2003. It was intended to help airlines and the aviation industry tide over the uncertainty faced by the global aviation industry then, and to further strengthen Singapore's position as an aviation hub in the region. When it expired on 31 December 2005, it was extended for another 3 years with an enhanced S$300 million incentive package to strengthen the growth of Singapore's aviation sector.
2During the 2009 Government Budget, it was announced that the Government will provide a 40% property tax rebate for industrial and commercial properties for 2009.
For more information, please contact:
Ms Julia Jemangin
Manager (Corporate Communications)
Civil Aviation Authority of Singapore
Ms Satwinder Kaur
Senior Corporate Communications Manager
Civil Aviation Authority of Singapore