Singapore Changi traffic growth to slow as Qantas drops hub and AirAsia closes base

Passenger growth at Singapore is slowing significantly, making it very unlikely Changi will expand in 2013 its current streak of three consecutive years of double-digit expansion. Growth in the low to mid single digits will provide some breathing space for authorities to tackle increasing congestion problems. But Singapore authorities should still accelerate airport expansion, particularly the opening of a third runway, because the current congestion has already become an impediment to growth.

In the latest blow to Changi, AirAsia has decided to close its Singapore base. Shifting back to Malaysia the group's small contingent of Singapore-based crews will have a very slight impact on total passenger figures at Changi. But it signals the challenges Changi faces as its LCC growth figures start to slow down while other airports in the region continue to record rapid increases.

The AirAsia decision follows Qantas moving its transit hub for European services from Singapore to Dubai, leading to a reduction in total Changi capacity of more than 2%.