Aviation in Singapore is a key component of the Singaporean economy. Besides currently the fourth busiest airport and the seventh busiest air cargo hub in Asia, the Singaporean aviation industry is also a significant aerospace maintenance, repair and overhaul centre.
The aviation industry is a significant contributor to the Singapore economy.Benefits of aviation In 2009, it contributed S$14.2 billion (5.4%) in direct and in-direct value-add to the Singaporean GDP. This included S$8.7 billion of direct contribution from the sector, S$3.1 billion through indirect contributions from the sector's supply chain and S$2.4 billion from consumer spending by employees of the aviation sector and its supply chain. 58,000 direct jobs were available in the industry, rising to 119,000 jobs if the entire supply chain is included. Out of the 58,000 direct jobs, aerospace manufacturing companies employed approximately 18,000 people, airline companies employed 15,000, while 24,000 worked in the airports and ground service companies. The sector also directly contributed S$1.5 billion in taxes in 2009.
Airlines registered in Singapore were also major contributors to the economy, employing over 15,000 in Singapore and providing a further 11,000 jobs in the supply chain in 2009. Overall, these airlines contribute over S$5.5 billion to the economy and supported 34,000 jobs in Singapore.
History In 1937, the Wearne Brothers launched the first commercial air service between Singapore and Malaya. It was called Wearne Air Services. On 28 June 1937, a de Havilland Dragon Rapide aircraft, the Governor Raffles, took off from Singapore to Kuala Lumpur and Penang. It was the inaugural commercial air service between these three cities by Wearnes Air Services. The WAS services ceased with the onset of World War II Japanese occupation of Malaya and Singapore. After the war, the air service was not continued.
Malayan Airways was established on 1 May 1947, by the Ocean Steamship Company of Liverpool, the Straits Steamship Company of Singapore and Imperial Airways. The airline's first flight was a chartered flight from the British Straits Settlement of Singapore to Kuala Lumpur on 2 April 1947 using an Airspeed Consul twin-engined aeroplane. Regular weekly scheduled flights quickly followed from Singapore to Kuala Lumpur, Ipoh and Penang from 1 May 1947 with the same aircraft type. The airline continued to expand during the rest of the 1940s and 1950s, as other British Commonwealth airlines (such as BOAC and Qantas Empire Airways) provided technical assistance, as well as assistance in joining IATA. By 1955, Malayan Airways' fleet had grown to include a large number of Douglas DC-3s, and went public in 1957. Other aircraft operated in the first two decades included the Douglas C-54 Skymaster, the Vickers Viscount, the Lockheed 1049 Super Constellation, the Bristol Britannia, de Havilland Comet 4 and the Fokker F27. In 1957, the airline became a state-run stock corporation.
When Malaya, Singapore, Sabah and Sarawak formed the Federation of Malaysia in 1963, the airline's name was changed, from "Malayan Airways" to "Malaysian Airways". MAL also took over Borneo Airways. In 1966, following Singapore's separation from the federation, the airline's name was changed again, to Malaysia-Singapore Airlines (MSA). The next year saw a rapid expansion in the airline's fleet and route, including the purchase of MSA's first Boeing aircraft, the Boeing 707s, as well the completion of a new high-rise headquarters in Singapore. Boeing 737s were added to the fleet soon after.
MSA ceased operations in 1972, when political disagreements between Singapore and Malaysia resulted in the formation of two entities: Singapore Airlines and Malaysian Airlines System. Singapore Airlines kept all 10 of MSA's Boeing 707s and 737s, retained the international routes out of Singapore as well as the existing corporate headquarters in the city, with J.Y. Pillay, former joint chief of MSA as its first chairperson. Female flight attendants continued to wear the sarong kebaya uniform, which had been first introduced in 1968. A local start-up advertising company, Batey Ads, was given the right to market the airline, eventually selecting the sarong and kebaya-clad air stewardesses as an icon for the airline and calling them Singapore Girls.
Market
As a result of an almost non-existent domestic market, Singapore has to place immediate emphasis on opening up the international market for its own airlines, as well as to allow foreign airlines to establish operations there. Singapore has Air Services Agreements with over 90 countries and territories, and has the most liberal aviation policy in Southeast Asia It has been an active advocate of open skies, and has concluded over 30 Open Skies Agreements, 18 of which are in the European Union, two in the Association of Southeast Asian Nations, five out of six members of the Cooperation Council for the Arab States of the Gulf, two in the Union of South American Nations and four members of the Pacific Islands Forum.
On 9 June 2006, it became the first Asian country to conclude a "horizontal" aviation agreement with the European Union. On 2 October 2007, Singapore became the second country to be allowed cabotage rights within the United Kingdom in a fully liberal aviation agreement. Singapore was also the first Asian country to conclude an Open Skies Agreement with the United States in 1997, and has significant liberal agreements with the United Arab Emirates.
Air service rights between Singapore-based carriers are allocated by the Air Traffic Rights Committee, established on 3 October 2003 in reaction to the awarding of multiple Air Operators Certificates in Singapore. The ATRC allocates air rights with a five-year validity. Unused rights for periods exceeding six months rights awarded but subsequently unable to meet pre-determined performance criteria will be returned to the pool for reallocation. Incumbent Singapore Airlines and its subsidiary airlines were allowed to retain all of their existing rights up to 2013, after which they will also carry a five-year validity and be subjected to the "use-it-or-lose-it" principle.
Open skies agreements CountryConcludedEffectiveRightsSourceAlbania Austria Bahrain 1st to 6th freedoms; 7th freedom for cargo onlyArchived copy Barbados Belgium Belize 1st to 6th freedoms; 7th freedom for cargo onlyBrunei Darussalam27 December 20041st to 6th freedoms; 7th freedom for cargo onlyArchived copy Archived copy Bulgaria 1st to 6th freedomsArchived copy Burundi 1st to 6th freedoms; 7th freedom for cargo onlyChile1st to 6th freedoms; 7th freedom for cargo onlyCook Islands 1st to 6th freedoms; 7th freedom for cargo onlyArchived copy Costa Rica Czech Republic 1st to 6th freedomsDenmark 1st to 6th freedoms; 7th freedom for cargo onlyFinland Germany Iceland 1st to 7th freedomsIreland 1st to 6th freedomsSingapore and Ireland Agree on “Open Skies” 13 December 2006 Kuwait 1st to 6th freedomsPress release mfa.gov.sg Lithuania 1st to 7th freedomsPress release Luxembourg Malta1st to 7th freedomsNew Zealand1st to 6th freedoms; 7th freedom for cargo onlyNorway 1st to 6th freedoms; 7th freedom for cargo onlyOman 1st to 6th freedomsPeru 1st to 6th freedoms; 7th freedom for cargo onlyPortugal1st to 6th freedomsQatar1988 Romania 1st to 6th freedomsMedia release Samoa 1st to 6th freedoms; 7th freedom for cargo onlySlovakia1st to 6th freedomsSlovenia Solomon Islands 1st to 6th freedoms; 7th freedom for cargo onlySpain Sri Lanka4 August 2005 1st to 7th freedomsSweden 1st to 6th freedoms; 7th freedom for cargo onlyThailand 1st to 6th freedomsTonga 1st to 6th freedoms; 7th freedom for cargo onlyUnited Arab Emirates 1st to 9th freedomsUnited Kingdom1st to 9th freedomsDaa mot.gov.sg United States1st to 6th freedoms; 7th freedom for cargo onlyMultilateral agreement state.govUruguay Zambia 1st to 6th freedoms
Singapore has attempted to conclude an open skies agreement with Australia since 1996, but was met with numerous obstacles. There are similar hurdles trying to conclude OSAs with other countries such as Indonesia and the Philippines,Encyclopedia mostly due to protectionist stances and a fear that it will not be a balanced agreement.PAL chief warns about affects of open sky policy on local carriers and tourism
Air service agreements CountryLatest conclusionRightsSourceAustraliaAll destinations (Unlimited passenger/cargo; unlimited via most intermediate points; 5th freedom except to US)Significant Liberalisation For Australia-Singapore Air Services Agreement Brazil All destinations (Unlimited passenger/cargo via any intermediate points), 5th freedom passenger and cargo to any destinationBilateral agreementsanac.gov.br CanadaAll destinations (Unlimited passenger/cargo via selected intermediate points)Press release ChinaAll destinations (Unlimited passenger/cargo, 5th freedom cargo to selected destinations)Singapore and China sign expanded air services pact ColombiaAll destinations (8 passenger; 8 cargo; to increase to 14 each by January 2011)EcuadorAll destinations (56, 5th freedom passenger; unlimited, 7th freedom cargo)FranceParis (7)Archived copy Greece Archived copy JapanTokyo-Haneda (28), Tokyo-Narita (5th freedom to US), all other destinations (Unlimited passenger/cargo; 5th freedom passenger flights to US via Osaka and Nagoya) KenyaAll destinations (Unlimited; 5th freedom with some restrictions)Press release MalaysiaAlor Setar (28), Bintulu (28), Ipoh (42), Labuan (28), Kerteh (28), Kota Bahru (28), Kota Kinabalu (42), Kuala Lumpur (Unlimited), Kuala Terengganu (28), Kuantan (28), Kuching (42) Langkawi (42), Malacca (28), Miri (28) Penang (70), Sandakan (28), Sibu (28), Tawau (28); unlimited cargo rights to all listed destinationsPress release PhilippinesCebu, Davao, Manila, Manila-Clark (with 5th freedom except to Canada/US) Press release Saudi ArabiaDammam (Unlimited), (14; 5th freedom to selected destinations) Press release UkraineAll destinations (Unlimited)
Figures in brackets refer to maximum frequencies per week.
There was much difficulties in attempts to open up the Singapore-Malaysia sector, until 2008.
Low-cost travel Partly in response from competition from AirAsia based in neighbouring Malaysia, Singapore-based low-cost airlines only began to operate from the year 2004 when Valuair launched its maiden flight on 5 May 2004. In rapid succession, two of the largest airlines operating out of Singapore Changi Airport began operating their competing carriers, namely Singapore Airlines' Tiger Airways and Qantas' Jetstar Asia, who began commercial flights on 15 September 2004 and 25 November 2004 respectively. A planned Singapore-affiliated airline by AirAsia was scuttled when it failed to obtain an air operator's certificate from the Singaporean authorities, possibly in retaliation to the Indonesian ban on all new low-cost flights into the country by non-Indonesian carriers.
The physical size of Singapore meant practically all low-cost air routes have to be international in nature, imposing greater risks on the airlines with the greater dependence on aviation negotiations between Singapore and its markets. With relatively limited air rights on offer in the Southeast Asian region, the three airlines had to contend with flying to a select number of destinations where air rights are available, resulting in intense, direct competition on specific routes. The Singapore-Bangkok sector, for example, saw all three Singapore-based carriers, as well as AirAsia flying the route prior to market consolidation. The airlines were able to take advantage of subsequent liberation of air rights between Singapore, Brunei and ThailandRemarks of Jeffrey N. Shane in late 2004, although key destinations such as Kuala Lumpur remain closed to all low-cost airlines.