• Home
• /
• Business

CIAS to invest S$11m in airport services

DUBAI — The Dubai-based Dnata controlled Singapore airport ground handler and in-flight caterer Changi International Airport Services Pte. Ltd. (CIAS) will invest S$11 million in improving airport services to improve its market share.

Dubai-based Emirates group unit Dnata bought Temasek Holdings' 78 per cent stake in CIAS last year and the group has been battling to increase its 20 per cent market share, which includes customers such as sister company Emirates Airlines, Lufthansa, Cathay Pacific, and Northwest Airlines Corporation (NWAC).

CIAS faces competition from the industry's dominant player, Singapore Airport Terminal Services Limited, which has an 80 per cent market share and Swissport, a unit of Candover Investments PLC and Dutch airline KLM, launched operations in March as the third ground handler at the Singapore airport.

The increased competition has put pressure on fees, but CIAS expects to maintain and improve its margins by leveraging on its expertise and reviewing its costs, Dnata President and CIAS Chairman Gary Chapman said.

CIAS is also exploring new business opportunities and overseas alliances in growth markets such as China, where it already has operations in Guangzhou, and India, to drive long-term growth.

“But these are very preliminary. They won't happen this year. Our immediate focus is on consolidation,” said CIAS Chief Executive Georgie Ong.

The new investment, which is almost double CIAS' usual annual capital expenditure of around S$6 million, is being spent on a new Commercially Important Passenger, or CIP, lounge at Changi airport's Terminal One, which is a joint venture with Cathay Pacific Airways, and to upgrade the in-flight catering facility.

CIAS has also planned to introduce over the next year new ground support equipment, large scale information technology projects for baggage handling, a web-based cargo management system, and a SAP-based catering system. The improvements will help CIAS stay ahead in the increasingly competitive ground-handling industry, Ong said.