Singapore's latest budget includes a $3 billion plan to expand its Changi airport with a fifth terminal before the fourth is even completed, but whether or not the travelers come isn't clear.
"Changi's current success and successful completion of the expansion alone will not guarantee that the new capacity is utilized," Graham Pickett, a global aviation and transport analyst at Deloitte, said via email.
It's not a modest expansion. The new terminal five, targeted for completion in around 10 years, will be as big as terminals one, two and three combined, more than 1 million square meters. The additional airport spending is likely a contributor to expectations Singapore's budget deficit this fiscal year will rise to around 6.67 billion Singapore dollars ($5.3 billion), up from last fiscal year's smaller-than-expected 100 million Singapore dollar deficit.
Singapore is projecting Changi will see passenger growth of around 4-6 percent each year for the rest of this decade, according to a speech by Lui Tuck Yew, the transport minister, a year ago.
But it isn't entirely certain that traffic will materialize. In 2014, Singapore's international visitor arrivals fell 3.1 percent on-year to 15.1 million, the first drop since 2009, during the financial crisis, amid a double-digit decline in Chinese tourist arrivals, the Singapore Tourism Board said.
In a research note in August of last year, Maybank-Kim Eng analyst Derrick Heng noted that Changi's flight traffic was expanding faster than its passenger throughput, as the region's airlines deal with overcapacity -- something Heng believed would lead to carriers scaling back their offerings.