New Airport Development Levy From 1 July 2018
28 February 2018
A new Airport Development Levy (ADL) will be introduced for passengers departing Singapore Changi Airport from 1 July 2018. The rate will be S$10.80 for passengers who begin their trips from Changi Airport and S$3.00 for passengers who start their trips elsewhere and connect through Changi Airport.
The ADL will help fund airport developments, including the new Terminal 5 (T5), and related infrastructure at Changi East. Legislative changes will be made to put into effect this new tax, which will apply to tickets issued on or after 1 July 2018. Passengers travelling on or after 1 July 2018 whose tickets are issued prior to 1 July 2018 will not be subjected to the ADL.
Need for Expansion of Airport Infrastructure
Changi Airport is Singapore’s gateway to the world and an icon which Singaporeans are proud of. It makes significant contributions to the Singapore economy, provides good jobs for our people, and enhances Singapore’s position as a global hub for trade, finance and tourism.
With robust air traffic growth over the last decade averaging 5.4% growth per annum, Changi Airport is fast reaching the limits of its capacity. Growth is expected to remain strong over the next few decades, supported by the growing demand for air travel in the Asia-Pacific. Without further expansion, air traffic at Changi Airport will exceed capacity; Changi Airport will be unable to grow its connectivity and could lose its hub status to other airports around the region. Service standards will also drop and travellers will experience more delays.
It is therefore critical for Changi Airport to expand its infrastructure and capacity. Businesses and passengers will benefit from Changi Airport’s ability to handle higher volumes of passenger and aircraft movements safely and efficiently. Both passenger and cargo carriers will have room to expand at Changi Airport. Singapore’s connectivity to key and emerging economic centres will be enhanced, offering additional destinations and options for Singapore residents. Likewise, the expansion ensures that Changi Airport remains a preferred global air cargo hub for freighters and transhipment operators.
The new Changi East will enable Singapore to accommodate future growth in air traffic, and capitalise on the benefits that air connectivity brings to Singapore. It is a Whole-of-Government effort involving multiple agencies as well as Changi Airport Group (CAG) and external experts. There are three main elements:
- The first is a three-runway system, in which an existing military runway is being extended and accompanying taxiways are being constructed to allow for Changi Airport to cater to more flights. Works for the three-runway system commenced in 2016. The third runway will be ready for civil aviation use in 2020, and the three-runway system will be operationalised in the early 2020s;
- The second is a network of tunnels and systems, including the baggage handling system and automated people mover system, to allow for the efficient transfer of passengers, baggage and airside vehicles within Changi East and also between Changi East and the existing terminals;
The third is Terminal 5, which will allow Changi Airport to serve up to an additional 50 million passengers per annum in its initial phase, a 60% increase in Changi’s capacity.
Extensive land preparation and drainage works at Changi East, which are needed to prepare the site prior to its construction, have been on-going since 2014.
Funding for Changi East
The Changi East developments are expected to cost tens of billions of dollars. They will be funded through joint contributions by the Government, the airport operator (CAG) and airport users, namely passengers and airlines.
Due to the strategic value of Changi East, the Government will invest substantially and foot the majority of the costs. To date, the Government has committed more than S$9 billion into the project. CAG has also committed S$3.6 billion to date, and will commit its reserves and future surpluses (including earnings from its airport concessions), as well as take on substantial borrowing towards funding the project. Past infrastructure developments at Changi Airport have been paid for by the airport through aeronautical charges and commercial revenue.
Charges for airlines and passengers will be kept to the minimum necessary to maintain Changi Airport’s competitiveness. Airlines and passengers departing from Changi Airport will contribute towards the Changi East developments via aeronautical charges paid to CAG, as well as the ADL.
The ADL will be reflected on airline tickets and forms part of the total ticket price. Worked examples can be found in the Annex and on the CAAS website. It will be collected by CAG from the airlines, on behalf of the Civil Aviation Authority of Singapore (CAAS) and the Government. The ADL revenue will be channelled directly into the Changi Airport Development Fund (CADF) set up for the purpose of funding airport developments at Changi, and does not form part of CAG’s or CAAS’s revenue stream.
 For example, a passenger who starts his journey from another country and connects via Changi Airport for both his onward and return journeys, will pay the ADL amount of S$3.00 twice, as he will depart from Changi Airport twice.
Click here for the Annex.
For more information, please contact:
Assistant Director (Corporate Communications)
Ministry of Transport
DID: +65 6376 5041
Deputy Director (Corporate Communications)
Civil Aviation Authority of Singapore
DID: +65 6541 2912
Mobile: +65 96211087