Centre for Asia Pacific Aviation notes Singapore Changi Airport recorded an all-time high 35 million passengers in 2006, up 8% year-on-year - a year in which it completed the upgrade of Terminal 2. The new Terminal 3 will for operations in early 2008, while upgrading works on Terminal 1 will commence in 3Q07.

"But Changi Airport faces rising competition from other regional hubs," stated the Centre's Executive Chairman, Peter Harbison.

"The increasing threat of Dubai is well documented, but Changi is also losing ground to traditional rivals like Hong Kong, as Mainland travel impacts increasingly and new carriers emerge in Hong Kong," according to Mr Harbison.

Hub Passenger Traffic Growth (Index: 100 = 2000)

Source: Centre for Asia Pacific Aviation

Airport Authority Hong Kong is developing an airport system in the Pearl River Delta and seeking investment opportunities in other airports on the Mainland , while Changi's future growth focus could lie in the fast-growing Middle East region.

Changi's airport advisory unit, Changi Airports International, has gained a contract to advise Abu Dhabi Airports Co (ADAC) on the planning of its new USD6.8 billion Midfield Terminal Complex at Abu Dhabi International Airport. In addition to its recent management contract, the advisory deal is potentially another step towards an equity deal later, as ADAC continues on the road to privatisation.

"Middle East airports are drawing interest from several foreign airport groups, including Changi's rival, Malaysia Airports, so competition for contracts will be intense," concluded Mr Harbison.