1. The Current Situation - Rise of the Middle East
The Middle East
sees the rise of the air hubs of Dubai, Doha and Abu Dhabi.
Dnata,
or Dubai National Air Travel Agency, is one of the world’s largest providers of
airport services. Part of the Emirates Group and wholly owned by the
government of Dubai, it comprises more than 50 specialist businesses, including
a comprehensive travel and tourism supply chain in Air Transport, Hotels &
Resorts, Retail, Ground handling, cargo, travel and catering services, Food
& Beverage, Tour Operator & Events Management, Travel and Training.
2. The Singapore Strategy – An Aerospace Hub
The Emirates Group is wholly owned by the government of
Dubai. In contrast, CAG was formed in 2009 to focus on airport operations and
management, and air hub development of the corporatized Singapore Changi Airport. CAAS continues its role as regulatory
authority for civil aviation in Singapore, and has a role in the growth and
development of the air hub and aviation industry.
Changi Airports International (CAI), a fully owned subsidiary of the CAG,
seeks to invest in and manage foreign airports.
CAAS aims to
further strengthen Singapore's position as a regional air hub, and that in its
next phase of growth, focus on innovation, connectivity and the clustering of
related industries. It hopes for
companies to move up the value chain by taking on work in areas such as
research and development (R&D), design, and manufacturing, as well as more
advanced MRO work. It is also looking beyond
MRO, where there is the potential to become a design think-tank for aerospace
original equipment manufacturers (OEM).
3. Moving Forward – 3 Possible Options
A.
Government Involvement
“Singapore needs
air connectivity and that's what we've been saying all the time. If we don't
have the money as a company, somebody must pay.” - Liew Mun Leong, CAG
chairman.
B. Private Sector Leads
“Perhaps Changi can
consider opening itself to retail investors so that there is some private
investment, either in terms of bonds issued to the public or shares to retail
investors, or both, with the Government retaining an important say on strategic
decisions." - Terence Fan, SMU’s aviation specialist and assistant
professor of strategic management.
An example of a private sector partnership sees SIA and
Airbus teamed up to open a pilot training school here. SIA owns 45% of the
Airbus Asia Training Centre and sees this as a key investment for the airline,
as well as being in line with the carrier’s’ "transformative strategy to
go beyond the core business into adjacent areas". – Goh Choon Phong, SIA
chief executive officer.
C. Government-Linked Companies Investments
Unlike Dubai, Singapore government lets the private sector
take the lead in its business decisions.
Unless it is one of strategic importance e.g. in January 2014 Singapore
investment company Temasek decided to partner the Singapore government to
rejuvenate the Mandai wildlife and nature heritage precinct in Singapore.
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