BUDGET 2025: Analyst sees long wait for returns from $5b Changi expansion

The expansion of Changi Airport is a strategic move that will strengthen Singapore’s position as a leading air hub.

The Singapore government has announced a $5b top-up to the Changi Airport Development Fund. A guarantee will also be provided to Changi Airport Group, helping lower borrowing costs for Terminal 5’s development.

Shekhar Jaiswal, analyst at RHB, said the expansion of Changi Airport is a strategic move that will strengthen Singapore’s position as a leading air hub. He noted that Terminal 5’s increased capacity would be a long-term growth driver for aviation-related companies.

Once operational, Terminal 5 will expand Changi Airport’s capacity by more than 50%. This expansion creates growth opportunities for companies like Singapore Airlines, SATS, SIA Engineering, and ST Engineering.

To promote sustainable transportation, the government will introduce a Heavy Vehicle Zero Emissions Scheme. Additionally, an Electric Heavy Vehicle Charger Grant will support the co-funding of charging infrastructure.

Jaiswal highlighted that these green initiatives are essential for future-proofing Singapore’s transport sector. He mentioned that electrifying heavy vehicles would reduce operational costs for logistics and transport firms.

The government plans to invest over $60b this decade to expand and renew the rail network. An additional $1b will be allocated to enhance bus services under the Bus Connectivity Enhancement Programme.

SBS Transit, a subsidiary of ComfortDelGro, is expected to benefit significantly from these developments. It is the largest public bus operator and runs two MRT lines in Singapore.

Jaiswal stated that the rail network expansion and bus enhancements will strengthen SBS Transit’s market position. He believes these investments will meet growing commuter demand and improve operational efficiency.

Furthermore, SBS Transit, in partnership with RATP Dev Asia Pacific, will operate the upcoming Jurong Region MRT Line. This development will enhance SBS Transit’s presence in the growing rail sector.

Jaiswal remarked that the Jurong Region MRT Line is a significant growth opportunity for SBS Transit. The line will serve key industrial and residential areas, driving higher passenger volumes and revenue streams.

Overall, the Changi Airport expansion, green transport initiatives, and public transport enhancements provide long-term growth potential for Singapore’s aviation and land transport sectors.

Jaiswal concluded that these measures will reinforce Singapore’s role as a key transport hub in the region. He added that the long-term outlook for SIA, SBS Transit, and ST Engineering remains positive due to strong structural growth drivers.