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Feedback for Macroeconomics Prelim Analysis

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Feedback for Macroeconomics Prelim Analysis

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Hello Team,

Thanks for sharing your prelim analysis with me. You’ll find below, feedback from me for your second stage work. Please note that the grow areas are specific to what I read on your padlet wall. It doesn’t mean these are all you need to do, to deepen your analysis for stage 3 presentation. I’m sure you’ll find more concepts or new info to deepen your analysis along the way. So feel free to expand your analysis. It also doesn’t mean that you have to address all that I’ve mentioned below. As a team, discuss and come to a consensus.

Just to be clear, there is no need to amend your prelim analysis on padlet. My feedback are meant for you to consider when you work on deepening your analysis in stage 3 (Presentation and the slides)

Glows:
I like that the Team revealed understanding in covering the overall economic outlook before analysing the specific industry (Aviation) to some extent. Good work in making reference to relevant articles and reports from recognised sources. Be sure to revisit these sources (in addition to new ones) as you work on your slides to avoid missing out the gems (esp the IATA report).

Grow areas:
Room for growth in terms of applying more economic concepts to your analysis.

Specific comments:
GDP
Good work in identifying the key sectors. Next step would be to deeper the analysis. Suggestion - how significant in terms of % or revenue generation. Do also find out on this for Aviation if possible.

The key causes impacting GDP could be deepened. E.g How travel restriction impact GDP using the expenditure formula. E.g. Why exports is important to SG and what do we exports and so on

Employment situation
Since we are looking at the big picture, it'll be good to look at the overall employment situation in SG first before focusing on aviation.

Good find on ambassadors and the figures to support retrenchments in the aviation sector. As you research further on such moves to cut costs across sector, try to identify this type of unemployment.

Inflation
Pretty good stuff here. Key causes were mentioned and reasons provided, except for the increase in price of cooked food. Take a look at all the causes and try to identify whether its demand pull and or cost push inflation.

Policies
Yeap, relevant policies, keep working on it!

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News Releases

1. The aviation sector has been one of the hardest hit sectors by the COVID-19 pandemic. In view of this, the Government will extend the support measures in the Stabilisation and Support Package and the Enhanced Aviation Support Package for the sector. A total of $187 million will be allocated to extend the support from November 2020 to March 2021 ¹.

2. This extension will provide continued cost relief through landing and parking rebates, and rent relief, for airlines, ground handlers, cargo agents and other airport partners at Changi Airport and Seletar Airport.

3. The Government will also continue to provide funding support to Singapore carriers to rebuild our air connectivity to the world, which is critical to preserving our relevance as a global hub.

4. The details of the extended cost relief measures are as follows:

For Airlines
* 10% landing charge rebate for all scheduled passenger flights landing in Singapore;
* 50% rebate on rental paid for airlines' lounges and offices within Changi Airport and Seletar Airport terminal buildings; and
* 100% rebate on aircraft parking charges at Changi Airport and Seletar Airport.

For Ground Handlers
* 50% rebate on rental paid for ground handling companies' lounges and offices within Changi Airport and Seletar Airport terminal buildings.

For Cargo Sector
* 10% landing charge rebate for all scheduled freighter flights landing in Singapore; and
* 20% rebate on rental paid by cargo agents tenanted in the Changi Airfreight Centre (CAC).

5. Further details of the support will be shared with companies.

1 Measures announced under the previous budgets due to expire on 31 October 2020 will be extended to 31 March 2021.

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Extension of Support to the Aviation Sector

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News Releases 1. The aviation sector has been one of the hardest hit sectors by the COVID-19 pandemic. In view of this, the Government will extend the support measures in the Stabilisation and Support Package and the Enhanced Aviation Support Package for the sector.

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SINGAPORE: Budget 2021 has adopted a more focused approach towards the most impacted sectors of the economy.

For example, S$870 million was provided to support the aviation sector, including a 10 per cent landing charge rebate for all scheduled passenger flights landing in Singapore for airlines, and a 50 per cent rebate on rental paid for ground handling companies' lounges and offices within Changi Airport and Seletar Airport terminal buildings.

Is this support justified?

As mentioned by Deputy Prime Minister and Minister of Finance Heng Swee Keat in his Budget speech on Tuesday (Feb 16), this support is to preserve the core capabilities and Singapore's position as a hub for global air travel and industries directly linked to this critical sector.

Changi Airport's total passenger movements were only 2 per cent of pre-COVID-19 levels as the International Air Transport Association (IATA) forecasts that it will take several years for air travel to recover.

A CRUCIAL PILLAR OF THE ECONOMY

In strategic terms, the aviation sector provides essential air connectivity for Singapore.

IATA reported that in pre-COVID times, air transport connected Singapore to approximately 159 international destinations as some 73 airlines operated out of Singapore.

To put it in perspective, much of Singapore's economic growth and status as a global aviation hub and trading nation was facilitated by the 355,400 aircraft landings and take offs from Singapore.

Therefore it is unsurprising that the health of industries within the aviation ecosystem is being supported as a key pillar of the economy.

Apart from direct links to the tourism sector and industries such as hospitality, retail, transport and F&B, the aviation sector encompasses several sectors instrumental for Singapore's economic development in the past as well as in future.

These include aircraft maintenance, repair and overhaul (MRO), financial services, supply chain management and manufacturing.

JOBS AND MORE JOBS

Aviation giants like Airbus, Rolls-Royce and GE Aviation have invested heavily in facilities here - as explained below - which in turn create local jobs, because of Singapore's focus on being an aviation hub.

Singapore itself has invested heavily in the aviation ecosystem which is crucial for the economy and supported by specialised training and R&D to further develop skillsets necessary to seize future opportunities.

According to the Civil Aviation Authority of Singapore (CAAS), the aviation industry contributed about 3 per cent of Singapore's total GDP and provided some 119,000 jobs.

These included employers in the airlines industry, airport operators, airport on-site enterprises and aircraft manufacturers.

IATA estimated that in total, Singapore's air transport sector supported 375,000 jobs.

These were made up of the 119,000 jobs in the aviation industry, 78,000 jobs in ancillary support industries and a further 26,000 positions that were supported by the spending derived from the aviation industry.

If inflows of foreign tourists were included, their spending supported a further 152,000 jobs.

Furthermore, the air transport sector and supply chain sector added S$29.4 billion to Singapore's GDP.

In addition, spending by foreign tourists contributed another S$19.3 billion to GDP that amounted to a total of S$48.7 billion as gross value contribution to GDP or 11.8 per cent of Singapore's GDP.

IMPORTANT AVIATION HUB

The key core and strategic capabilities contained within the Changi and Seletar air hubs, such as efficient processes, automated systems, world-class customer service and high accessibility, have enabled Singapore to be Asia's leading solutions provider for MRO services that makes up 10 per cent of the global MRO output.

Functioning as a one-stop solutions provider, Singapore offers end-to-end services for the MRO needs of the aviation industry. This MRO landscape consists of Singapore enterprises and multinational companies (MNCs).

They include ST Aerospace, Pratt & Whitney, Bombardier Aerospace and Rolls - Royce - companies that are helping ensure that Singapore remains prominent on the global aviation map.

For instance, ST Aerospace is collaborating with Airbus to develop the A330 Passenger-to-Freight (P2F) conversion process. This is a first for Airbus to appoint a third-party to undertake a P2F conversion, which is a complex procedure for aircraft modification.

The aim of the A330 P2F conversion programme is to initiate the process of an aircraft modifications centre. As part of its aircraft modifications plan, ST Aerospace has built an aircraft hangar in Changi North and a hangar in the Seletar Aerospace Park.

The P2F programme is critical to expanding the air freight logistics sector as it is currently growing and could utilise the spare capacity left by the passenger sector.

In terms of R&D activities, Rolls-Royce has established its Advanced Technology Centre (ATC) in Singapore to support the Seletar air hubs manufacturing activities.

Through its research, the Rolls-Royce ATC provides expertise in the provision of materials support and R&D solutions in the areas of computational engineering and electrical power and control systems.

The EDB is leveraging on the specific skills sets in MRO activities to establish more complex manufacturing activities in Singapore such as engine fan blades and avionics computers.

SECURING SINGAPORE'S SUPPLY CHAIN

The pandemic has highlighted the fragility and need to build resilience for supply chain management. Singapore is a key node for supply chain networks and the logistics industry due to its air connectivity and advanced infrastructure.

First, keeping Singapore's aviation sector alive also helps maintain its position as a node in supply chain networks, which has implications on the country's ability to source other products, including food supplies and essentials, as well as affect the competitiveness of other industries.

During the circuit breaker last year, those in Singapore would have seen how supply chain shocks can cause mass panic and genuine concerns.

This capability has also helped us get easy access to COVID-19 vaccines, which require advanced cold-chain logistics.

Second, being well-placed in supply chain networks has also enabled Singapore to become a regional distribution centre for aerospace firms.

For example, Satair, together with Airbus, has opened a joint distribution centre to support logistics and repair for aircraft.

Located at Seletar Aerospace Park, the distribution centre accommodates Airbus' inventory for spares and parts that supports its customers in the Asia Pacific region.

SUPPORTING OTHER INDUSTRIES

In conjunction, specialised services such as aircraft leasing are operated by 20 aircraft leasing companies based in Singapore.

They perform key functions such as aircraft asset management, financing and legal services, meaning there is a spillover of benefits for the legal and finance sectors.

Some of these companies include Nordic Aviation Capital Singapore, which is keen to grow its operations here to extend its reach into the region.

Another company, Titan Singapore Aircraft leasing, was formed in Singapore to create new roles in fleet management and finance to support the company's sales and marketing efforts for not only the Asia Pacific region but Africa as well.

As it has done in the past, the growth and development of the aviation sector will strengthen Singapore's capacity in emerging areas, such as sustainable aviation and cold-chain logistics

The aviation and airline industry is therefore key to Singapore as it is a major creator of jobs, investment and growth, helps the country maintain its supply chain competencies and help protect its food and essential supplies.

The sector also helps boost other industries like retail, hospitality, events, legal and finance.

With such strong multiplier effects and by being a core pillar of Singapore's economy, it is no wonder the Government sees the need to ensure its viability and competitiveness. That purpose should not be doubted.

Dr Faizal Yahya is a Senior Research Fellow at the Institute of Policy Studies, Lee Kuan Yew School of Public Policy, National University of Singapore.

This piece was first published in Channel NewsAsia on 18 February 2021.

Top Photo from Pexels.

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commentary: this is why singapore needs to save its airlines and aviation sector

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Commentary: This is why Singapore needs to save its airlines and aviation sector

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SINGAPORE: Budget 2021 has adopted a more focused approach towards the most impacted sectors of the economy. For example, S$870 million was provided to support the aviation sector, including a 10 per cent landing charge rebate for all scheduled passenger flights landing in Singapore for airlines, and a 50 per cent rebate on rental paid for ground handling companies' lounges and offices within Changi Airport and Seletar Airport terminal buildings.

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Worst may be over for Singapore’s aerospace industry as businesses start hiring again

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SINGAPORE: After being pummelled by the COVID-19 pandemic, Singapore’s aerospace industry is slowly getting back on its feet with businesses looking to hire again. Industry players said the worst may be over as travel resumes in some parts of the world and vaccine roll-outs continue to make progress, alt

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GDP
The economy of Singapore is heavily reliant on exports. Major industries supporting the economic growth of the country are tourism, manufacturing, and finance sectors.

Singapore real GDP (Constant 2005 Prices, $ billion)

Constant 2005 Prices, $ billion

Year 2016 Value 217.0 Growth 3.1

Year 2017 Value 224.0 Growth 3.2

Year 2018 Value 231.9 Growth 3.5

Year 2019 Value 240.6 Growth 3.7

Year 2020 Value 250.2 Growth 4.0

Singapore nominal GDP (Current Prices, $ Billion)

Current Prices, $ billion

Year 2016 Value 337.4 Growth 4.8

Year 2017 Value 353.3 Growth 4.7

Year 2018 Value 370.8 Growth 4.9

Year 2019 Value 390.0 Growth 5.2

Year 2020 Value 412.1 Growth 5.7

In 2021, there was a 7.1% growth in the third quarter on a year-on-year basis. Although this is slower than the 15.2% growth from last quarter, this has increased the GDP of the first 3 quarter to 7.7%. The travel restrictions and strict measurements against the virus continues to hinder the growth of the aviation, tourism and arts, entertainment recreation industry. In contrast,  outward-orientated industries such as electronics and finance and insurance has been growing better than expected. The shortage of labour in the construction and marine and offshore engineering sectors was alleviated when the government allowed the entry of migrant workers from South Asia as well as Myanmar into the country. After assessing the growth of the first 3 quarter of 2021, it was forecasted that the GDP growth for the year of 2021 would be around 7%.
It was also forecasted that the Singapore economy is expected to grow by 3-5% in 2022.

Labour market situation
- The employment rate for residents rose to 67.2 per cent in June this year, compared with 64.5 per cent a year ago
- In particular, the employment rate of youths aged 15 to 24 rose to 37.2 per cent in June, up from 30.9 per cent a year ago due to an increase in temporary positions related to managing Covid-19 such as safe-distancing ambassadors
- Thousands of employees in aviation companies were laid off as a result of the aviation industry being hit hardest amid the travel restrictions
Eg. Singapore airlines announced last year end that they had to cut approximately 4300 staffs due to factors such as reduction of flight capacity
- However, with consistent vaccine roll-outs and the expansion of vaccinated travel lanes (VTL), the industry is seeing signs of recovery
- With this positive growth in the second half of 2021, aviation companies plan to hire 1000 people over the next 2 years

General price trends
Singapore Inflation

Inflation Rate (%)

Year 2016 Value 2.6

Year 2017 Value 2.4

Year 2018 Value 2.3

Year 2019 Value 2.4

Year 2020 Value 2.2

According to additional source 1, overall consumer price index (CPI) increased to 3.8% year-on-year for November 2021
Some significant price changes:
- Food prices increased to 1.9% due to rise in prices of non-cooked food
- Transport prices had a large increase to 14.2% due to the rise in COE premiums which led to the sharp rise of private transport costs. With the release of VTLs, the increase in demand for air transport also contributed to the inflation.
- Clothing prices decreased to 6.6% which could be due to safe management measures which has restricted social events, resulting in lesser office or formal wear required

Significance of industry/Government support
-The industry plays a vital role in SG's economy as they contribute immensely through the ability to connect with cities around the world.
-Many jobs are supported by the industry itself or other industries directly linked to them(aviation industry), and hence was able to generate gross value of $36.6billion to the GDP
-The government supported by providing a large budget and many rebates, hoping to maintain the industry knowing of its importance to the country's economy.
-VTL was pushed for more to start travelling overseas and into SG, and hence boosting foreign tourist spendings.

Government measures
- In view of the COVID-19 pandemic, the government has implemented the extension of support measures in the Stabilisation and Support Package and the Enhanced Aviation Support Package for the aviation sector
- In total, $187 million will be allocated to extend the support
- The support would include cost relief through landing and parking rebates, and rent relief, for airlines, ground handlers, cargo agents and other airport partners at Changi Airport and Seletar Airport
- The government would also continue to provide funding support to Singapore carriers to rebuild our air connectivity to the world

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Happy that the leaner Team is working well together and giving support by providing constructive feedback and value-adding areas that your members are specialising in! *clap clap
I believe having gone through stage 1, Team will get hang of managing time for project to progress beautifully. I spotted 2 points in Teams reflection that could also be part of the analysis. Check out my comments within!

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Feedback on Microeconomics Prelim Analysis

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Feedback on Microeconomics Prelim Analysis

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Hello Team, Thanks for sharing your prelim analysis with me. You’ll find below, feedback from me for your first stage work. Please note that the grow areas are specific to what I read on your padlet wall. It doesn’t mean these are all you need to do, to deepen your analysis for stage 3 presentation. I’m sure you’ll find more concepts or new info to deepen your analysis along the way. So feel free to expand your analysis. It also doesn’t mean that you have to address all that I’ve mentioned below.

As a team, discuss and come to a consensus.

Just to be clear, there is no need to amend your prelim analysis on padlet. My feedback are meant for you to consider when you work on deepening your analysis in stage 3 (Presentation and the slides)

Glow areas:
1. All key sources largely from recognised sources with good effort in making reference to in-depth report. Thanks for making me read 35 + 40 pages of reports. Just kidding! Do use these as part of your references for the Macroeconomic analysis too.

2. All key sources are relevant to the chosen industry, in SG context or within Asia Pacific.

Grow areas:
I think that there are more information from the key sources that are “gems” and yet to be dug out by the Team. Can't seemed to find the India VTL being analysed too.

1. Correct identification of market structure with key characteristics such as high barriers to entry mentioned but could have adapted more reasons from the key sources to support this. Team might also want to check the relationship between Qantas and AirAsia. Team might also want to consider including the other key characteristics of this market structure, which is interdependence of players in the market. Information about this could also be found in your key sources.

2.
No. of sellers: The information lifted is factual. To bring this to the next level, Team might want to find out who exited from the SG market for instance.

Money income: Since Team identified money income as the determinant, it would be good to find out how income has changed recently and how that has led to a fall in demand for travelling. Any data supporting the relationship would be great. Something to think about would also be the impact of money income on travel in the current pandemic period. Huge or not?

No. of buyers: Glad that you indicated this observation being “pre-pandemic”, continue to expand this to include current situation for a more rounded analysis. I also spotted info within your key sources to be tapped on.

Taste and preferences: Question for thought would be, “Is Singapore than perceived as a country that is safe and with good hygiene currently?

3. Good attempt to apply this challenging economic concepts and the associated determinants. Just want to clarify that when price fall, quantity demanded will always increase. Whether a good or service has price elastic or inelastic demand depends on how reactive the consumers are to price changes.

Since Team talked about the pricing of different seat classes, Team might want to take up the challenge to explore this economic concept known as “price discrimination” that is not covered in class.

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Increase in sales after a drop in plane ticket prices

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This was published 6 years ago

Updated first published at

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Christmas has arrived early for hundreds of travellers after Singapore Airlines business-class tickets were mistakenly sold for flights to destinations in Europe for as much as half their actual price.

The mistake has led to a dispute between the airline and travel agents around the country over who should foot the bill for the error.

A steal: some lucky travellers will be able to enjoy business class perks at economy-class prices.

Singapore Airlines loaded business-class fares for flights between Australia and London into a global booking system that travel agents use to sell tickets to their customers.

The cost of business-class tickets that should have sold for up to $6000 a piece for flights from December 8 was loaded into the global distribution system, or GDS as it is known in the travel trade, for as little as $3500.

Hundreds of tickets are understood to have been snapped up by travellers who were lucky enough to spot the bargain fares for seats on one of the world's most highly regarded airlines.

The airline was finally alerted to the error by Flight Centre.

However, Singapore Airlines has since told travel agents who sold the cheap tickets that they will have to seek the difference between the actual price and what they should have sold for from their customers, or foot the bill themselves.

A spokesman for Flight Centre said it became aware of the issue on Saturday and notified Singapore Airlines of the problem, which appeared to have been fixed on Monday.

"Basically, the fare showed up in the booking system that online and bricks-and-mortar travel agents use as a business-class fare," the spokesman said.

"We have a good relationship with Singapore Airlines and will continue to talk to its management team in Australia to hopefully ensure a good outcome for our customers who have been affected."

Singapore Airlines said it had advised travel agents of various options, including paying the difference to its lowest business class fare, travelling in economy class on the booked ticket, refunding the difference between the fare charged and its lead in economy-class fares or offering a full refund.

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Travellers snap up half-price business tickets on Singapore Airlines after computer error

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This was published 6 years ago Updated first published at Normal text size Larger text size Very large text size Christmas has arrived early for hundreds of travellers after Singapore Airlines business-class tickets were mistakenly sold for flights to destinations in Europe for as much as half their actual price.

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Singaporeans expect Vaccinated Travel Lane to be launched across more countries.

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NEW DELHI - Mr Subhash Goyal, chairman of one of the largest travel groups in India, STIC Travel, is booking two tickets for him and his wife on the first available flight to Singapore in anticipation of the launch of a Vaccinated Travel Lane (VTL) scheme between the two countries from Nov 29.

Both his daughters are in Singapore and he is keen on seeing his two grandsons, aged 11 and 12, for the first time in two years.

"I'm dying to see my two grandsons in Singapore. We talk every day," said Mr Goyal, 75.

"There is a huge demand for travel, and a lot of families are separated now because there are a lot of Indians working in Singapore," he added.

Under the VTL scheme, travellers from either country will be able to visit one another without the need for quarantine.

Mr Karun Arya, a 36-year-old tech executive in Singapore, welcomed the scheme as he and his wife were now able to see their respective parents.

"I'm thrilled. It's been an extremely frustrating year. We've been forced to watch from the sidelines as foreigners from other nationalities had a much easier time getting permission to leave and return to Singapore and, more recently, as VTLs went live with other countries," he said.

"This means we can now travel to India and our parents can travel to Singapore easily since we are all vaccinated ," he added.

India and Singapore share close ties with strong people-to-people links. There are many Indian nationals working in Singapore as well as permanent residents and Singaporeans with family in India.

The proportion of employment pass (EP) holders in Singapore who are Indian nationals has doubled from 13 per cent to 26 per cent between 2005 and 2020, Manpower Minister Tan See Leng told Parliament in July this year.

"Singapore has been key to relations with India, especially with a large number of Indian diaspora who call it home. I would expect (passenger) traffic to be back to normal to Singapore in six months if there is no significant uptake on Covid-19 again," said Mr Ajay Awtaney, editor of LiveFromALounge.com, an India-based aviation news website.

Both countries are in talks to restart scheduled commercial services with two daily VTL flights each from Chennai, Delhi and Mumbai by Nov 29.

Passengers at Chhatrapati Shivaji Maharaj International Airport in Mumbai on Dec 22, 2020. PHOTO: REUTERS

At present, only relief flights are operating and ticket prices have soared to up to Rs 100,000 (S$1,821).

India is an important tourism market for Singapore, with 1.42 million visitors from the country recorded in 2019, the third largest visitor source for Singapore.

The Singapore Tourism Board has said it looked forward to welcoming Indian tourists again.

"We hope the VTL with India will be a significant first step towards a broader travel reopening. While we do not expect a major uptick in inbound tourists from India in the immediate term, it will be useful for travellers to get used to the new protocols and for both countries to streamline processes in the coming months," said Mr G.B. Srithar, regional director (India, Middle East and South Asia), Singapore Tourism Board.

"India is an important market for Singapore. We will market Singapore's varied offerings to our fans in India and look forward to welcoming Indian visitors once again when the VTL for India launches on Nov 29," he added.

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Families separated by Covid-19 look forward to Singapore-India VTL

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NEW DELHI - Mr Subhash Goyal, chairman of one of the largest travel groups in India, STIC Travel, is booking two two tickets for him and his wife on the first available flight to Singapore in anticipation of the launch of a Vaccinated Travel Lane (VTL) scheme between the two countries from November 29..

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One compliment for the group would be that I appreciate the fact that we look through each other's work and give constructive feedbacks so that we can strive to submit a better piece of work together.

One area to improve on our time management of the progress of our project so that we do not need to rush it a few days just before the deadline.

One interesting fact I learnt would be that Singapore Airlines

is one of the only few airlines in the world to have ever operated a Concorde service.

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I am grateful that everyone had put in the effort do come together and complete this part of the project despite the packed schedules.

However, it would be better if everyone gave the same effort to better understand the topic instead of rushing to find sources which may end up going to waste.

one interesting fact I found out during the research is that average age of Singapore Airlines aircrafts are 5years1month old.

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compliment: we were able to complete the project without any issues, everyone was proactive in looking for the key sources.

area of improvement: i feel that we can communicate more and work together at the same pace, even though we were able to finis it on time.

one interesting fact I found out during the research was that SIA does their own repairing and maintenance for their aeroplanes, giving them complete control over the quality of their planes.

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Despite our team only having 4 people, I think we have managed to get the work done pretty efficiently which is really great. I like how we are willing to compromise and adjust our schedules in order to discuss this project.

One area I think we can improve on is our time management as we tend to spend a bit too much time one part of the analysis which resulted in the other parts being quite rushed.

One interesting fact I learnt during the research is that Singapore airlines actually lost $4.27 billion for the financial year 2020 due to the pandemic.

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Microeconomics Prelim Analysis (based on 5 key resources)

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Microeconomics Prelim Analysis (based on 5 key resources)

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1. market structure of airline industry: oligopoly. (Rane)
support from key sources:
- there are over 100 airlines in the Singapore Airlines market, with 4 leading ones. They are Singapore Airlines, Emirates, Qantas and AirAsia.
- products offered between airlines are mostly similar or identical
- ease of entry into the industry is difficult due to the high capital required as well as intense competition with the leading airlines.

2.Demand/Supply of the Airline industry (Rane,ZT,Phoebe,Corwinn)

Number of sellers(airlines) in the SG has been decreasing due to the large amount of capital needed, low profitability, high risk and commitment as well as competition between established companies is intense. It is difficult to exit the industry & usually driven by financial insolvency that causes these companies to exit. This has discouraged little to no new entrants to the industry in recent years. (supply-no. of sellers)

It is said that, regardless of the purpose of travel, the demand for air travel is extremely vulnerable to the changes of money income of consumers. This is because travelling is not essential for leisure and business travellers. (demand-money income)

Passengers departing from SG increased about 13.06mil from 20.44mil in 2010 to 30.5 mil in 2019. Despite already being in high demand(pre-pandemic), the no. of buyers increases continuously as population rises and new expansions like city links and passenger operations.(demand-no. of buyers)

91% of respondents mentioned that health and safety precautions were more important now than price (36.8%), location (46.3%) and exclusive offers (34.8%). This shows that consumers are now prioritizing health and hygiene when deciding whether to travel or not. Hence, air travel will most likely decrease in popularity due to the uncertainty of whether there are sufficient measures in place to ensure the safety of travelers(demand-taste&pref)

3. price elasticity of demand of the Airline industry in Singapore (Corwinn, rane, zt))
support from the key sources:
- Generally, the airline industry in Singapore is rather elastic as the consumers are sensitive to the price changes.
- When the price of the air rates decrease, the demand of tickets will increase, and vice versa. This can be observed from the mispricing of business tickets for as much as half their actual price in 2014, where over 900 tickets that were sold over the span of 2 days.
- Flight tickets are typically quite expensive and takes up a large proportion of income for the average person. This is evident in the number of low-cost carriers in Singapore which makes the Singaporean airline industry is highly price elastic (Proportion of income)
-Singapore Airlines offer 3 to 5 different seat classes which shows that is a rather elastic industry since it isn’t a necessity to have so many types of classes (Neccessities&Luxury)
-Since Singapore is a geographically small country, travelling from one end to another does not require the use of airplanes. Hence, comparing outbound flights alone, only some short routes can be substituted by train or car travel. Otherwise, travelling long routes by these substitutes would be time-consuming and even more expensive at times. Therefore, there are no practical alternatives to flying in Singapore, making the threats of substitute in this industry moderate. Hence, due to the availability of substitute of long haul flights, the price is inelastic. (availability of substitutes)

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Amid the excitement over new destinations under the Vaccinated Travel Lane (VTL) scheme, there are precautions to take and potential pitfalls to avoid in leisure travel during a pandemic, said Mr Steven Ler, president of the National Association of Travel Agents Singapore.

Travel agents said that trips in the new normal will entail higher costs from insurance, Covid-19 tests and the whittling down of group sizes.

And under Singapore's rules, those who test positive overseas will not be able to board a plane for home until 14 days after they were first diagnosed and after they have fully recovered from Covid-19.

But there has been no lack of interest as Singapore, in its biggest move to restart leisure travel since the pandemic, announced nine new VTL countries last week, in addition to Germany and Brunei.

Fully vaccinated travellers can travel quarantine-free to the United States, Britain, Denmark, France, Italy, Spain, the Netherlands and Canada from Oct 19, and to South Korea from Nov 15.

The pent-up demand saw customers flocking to the Singapore Airlines (SIA) service centre in Orchard Road on the same day.

Travel agents, too, reported an uptick in inquiries.

The Government followed up on Monday with an announcement that unvaccinated children under 12 will also be allowed to travel quarantine-free from Oct 19.

Chan Brothers Travel has seen a fivefold surge in inquiries since the new VTL countries were announced, said its senior marketing communications manager Jeremiah Wong.

But the new normal of leisure travel will come with its share of inconveniences.

Though new rules have reduced the required number of Covid-19 polymerase chain reaction (PCR) tests from four to two, travellers will still have to make time before their return flight to take a test, either at the airport or at a service provider in the city.

Those who test positive may be looking at an isolation order, along with a trip extension of at least two weeks. The Ministry of Health states on its website that as of Oct 6, travellers should not return to Singapore until 14 days after the first diagnosis, and after they have fully recovered from Covid-19.

Travel insurance with Covid-19 coverage offers some buffer against this, with some plans including a daily quarantine allowance that can go towards accommodation and meals. This usually ranges from $50 to $100 a day.

Travel agents said they can play a role in helping travellers navigate the steps required.

Mr Ler, who is also the executive director of travel agency UOB Travel Planners, said: "You can possibly Google the information online, but it will take much longer.

"Travel agents have already been repeating this multiple times to customers.

"They have the expertise to assist with the essential planning, so you can focus on the joy of travelling again."

UOB Travel Planners, for instance, has a "travel safe bundle", which includes travel insurance with Covid-19 coverage, Covid-19 PCR tests and optional add-ons such as airport transfers.

These bundles cost between $500 and $900 and have been popular among corporate customers since they were launched nine months ago, said Mr Ler, who anticipates similar demand from leisure travellers.

Despite the added costs - travel agents here estimate that packages will cost between 5 per cent and 30 per cent more from insurance, Covid-19 tests and reduced group sizes - some travellers are undeterred.

For Mr Joni Herison, a father of three, the relaxed border measures are a chance to see his wife's brother and her family, who live in Atlanta, Georgia, in the US. They hope to make the trip next June.

Prior to the pandemic, the two families would vacation together every two to three years. Their last trip was to Phuket in 2018.

Mr Herison, 44, is the owner and founder of travel agency Druk Asia, which specialises in tours to Bhutan. His wife, a housewife, is 44, and their son and two daughters are aged nine, six and three.

PREPARED

The family is prepared to pay about 10 per cent to 20 per cent more for the trip, compared with pre-pandemic prices.

Meanwhile, business development manager Daniel Fang, 31, intends to go to New York City, Miami and Hawaii next month.

The bachelor and avid traveller, who has visited 102 countries, also went to Germany for 10 days last month under the VTL scheme.

To mitigate the Covid-19 risk, he rented a car in Germany to avoid travelling by public transport. He also set aside a contingency fund to cover Covid-19-related expenses such as accommodation, should he need to self-isolate.

On the possibility of catching Covid-19 and being stranded overseas, Mr Fang said: "These are things I took into consideration before the trip.

"But after having not travelled for two years, I think this is a good opportunity and a risk I am willing to take."

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Singaporeans still keen to travel despite risks, higher costs

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Amid the excitement over new destinations under the Vaccinated Travel Lane (VTL) scheme, there are precautions to take and potential pitfalls to avoid in leisure travel during a pandemic, said Mr Steven Ler, president of the National Association of Travel Agents...

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Expansions made in Changi increasing amount of passenger traffic.

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Pre pandemic air traffic at Changi Airport

Changi Airport was one of the largest transportation h ubs in Asia and one of the busiest in terms of passenger traffic. In 2019, the number of moving commercial aircrafts at Changi Airport amounted to approximately 382 thousand. More than 33.5 million people were departing from the Singaporean Changi Airport. In the same year, several expansions took place contributing to increase the passenger traffic. Changi Airport added three new passenger city links to Busan in South Korea, and Hefei and Xuzhou in China. On top of that, seven airlines, including AirAsia X Berhad and Vistara, started passenger operations from the airport.

COVID-19 has severely damaged Singapore's aviation industry

However, the COVID-19 outbreak has had a massive impact on the global aviation industry. Most of the air traffic has collapsed and Singapore has not been spared either. As of December 21, the flight frequency fell to an average of minus 89 percent compared to the previous year. This development naturally had an impact on Changi Airport itself, as well as on Singapore airlines.

The number of passengers carried by Singapore Airlines amounted to about 460 thousand in fiscal year 2020/21, down from around 21 million in 2019/20. Back in 2019, Scoot, the low cost airline of the Singapore Airlines Group, was named the best budget airline in the Asia-Pacific region. Scoot would be expanding its routes with the launch of nine new destinations by the end of 2020. After the pandemic year, the outcome of this project and many others remains open. As of now, all of Singapore airlines' important key performance indicators have experienced a strong loss compared to the previous year.

Changi Airport has been in the middle of upgrading and expanding the airport and air navigation services infrastructure to ensure sufficient capacity ahead of demand. In 2019, Changi Airport opened the world's tallest indoor waterfall, located in the newly opened entertainment complex Jewel Changi Airport. By 2030, Changi Airport's three runway system and the mega Terminal 5 was projected to increase passenger capacity by another 50 million. The plans have been put on hold and it remains to be seen whether the Singapore aviation industry will recover quickly so that the plans can be implemented on time.

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Changi Airport was one of the largest transportation h ubs in Asia and one of the busiest in terms of passenger traffic. In 2019, the number of moving commercial aircrafts at Changi Airport amounted to approximately 382 thousand. More than 33.5 million people were departing from the Singaporean Changi Airport.

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A research report and overview of Singapore's airline industry.

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The pandemic has changed tastes and preferences of consumers as travelers focus more on hygiene

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overview of Aviation industry in singapore

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Overview of Singapore's aviation industry

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The air transport industry constantly evolves, as new trends and technologies shape an ever-changing landscape. Over the years, Singapore has built up the sector as a key enabler of the Singapore economy. We possess the world's most awarded airport, an enviable air safety record, a respected centre for aviation training and a strong aviation industry. This includes airport and airline companies that are world-class leaders in their respective fields, internationally renowned maintenance, repair and operations (MROs) and related aviation ancillary service providers, all the result of a commitment to developing a world-class aviation system.

Growth Opportunities

The air transport industry carries billions of passengers and cargo tonnage around the world annually, for business, leisure or personal purposes. It is a key driver of international trade and exchange, and Singapore's development as a global air hub connected to over 320 cities handling 54 million passengers annually helps attract high value-add investments and talent to our shores. Besides the most visible pilot and cabin crew roles, the air transport industry also includes a wide range of other professional roles including aviation law and economics, revenue management, fuel hedging, route planning, and in-flight product and services.

International Civil Aviation Organization (ICAO) estimates that air traffic in the Asia-Pacific region will triple by 2030, which presents exciting opportunities for Singapore, with our carriers poised to receive over 150 new aircraft in the coming years. Besides additional infrastructure for Changi Airport with the development of a third runway and a mega Terminal 5, we are also expanding industrial land for more air cargo and aerospace companies.

Fun Facts

By late 2020s, Changi Airport will have 3 runways and 5 terminals, enabling it to handle up to 135 million passengers every year.

There are over 100 airlines flying to some 380 cities in about 80 countries and territories worldwide. This makes Singapore one of Asia's most connected cities.

Did you know that Changi Airport is the world's most awarded airport, having recently won its 500th 'Best Airport' award? This includes 30 years as Business Traveller UK's Best Airport in the World and 8 years as Skytrax's World's Best Airport.

Video courtesy of Civil Aviation Authority of Singapore.
Sponsoring Organisations

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The air transport industry constantly evolves, as new trends and technologies shape an ever-changing landscape. Over the years, Singapore has built up the sector as a key enabler of the Singapore economy. We possess the world's most awarded airport, an enviable air safety record, a respected centre for aviation training and a strong aviation industry.