Ahead OF THE Curve ANNUAL REPORT 2017/18 12 Mission, Vision, Values Contents 13 Corporate Profile 14 Chairman & CEO Message 18 Board of Directors 24 Executive Management 25 Management Team 26 Awards 27 Financial Review 31 Corporate Governance 35 Enterprise Risk Management 36 Business & Operations Review 38 Global Connectivity 40 Air Traffic Statistics 41 @ChangiAirport on Instagram 42 Revolutionising Air Travel 48 Growing the Air Hub of Choice 51 Touching Millions of Hearts 54 Redefining Travel Retail 58 Enhancing Operational Readiness 61 A New Era Gleams 64 Driving Digital Innovation 66 Strengthening Bonds on Social 68 Building International Presence 71 Winning Hearts at the Workplace 73 Reaching Out to the Community 75 Group Financial Summary 2017 marked a historic milestone The year also saw Changi’s one Changi Experience will continue as Changi Airport opened doors billionth passenger passing through to be the goal for the airport to a brand new terminal, T4, with since its opening on 1 July 1981. In community driving the airport’s new breakthroughs to redefine 2017, Changi Airport also welcomed service-focused culture and travel experience and grow a record of 63 million passengers in philosophy. a financial year. This is a remarkable Changi’s appeal as a leading air Changi’s transformation journey is achievement for the 50,000-strong hub. Boundaries were pushed, with now well underway. Following the ONE Changi airport community, innovation being the cornerstone opening of T4, a new passenger made possible by years of hard to elevate the Changi Experience, terminal at Seletar Airport and work and dedication to grow the and provide our passengers with Jewel Changi Airport will be Changi air hub together to what it is opportunities to discover new unveiled to the world soon, while today. With over 100 airlines linking adventures. Designed to be a fun, the development of Changi East, a network of 400 cities worldwide, vibrant and positively surprising including T5, picks up pace. In Changi Airport is the world’s sixth planning ahead to build sufficient terminal, T4 presents a theatre of busiest airport for international capacity to meet future demand experience that invokes emotional traffic, handling 7,200 weekly flights in air travel, Changi will ride on the connection, surprising and or one every 80 seconds. momentum of growth, and prepare delighting passengers every step itself for the future with these As Changi Airport Group (CAG) of the way. exciting new developments to stay celebrates the airport’s many ahead of the curve. milestones, it continues to reinforce its commitment to service by putting passengers at the heart of everything it does. Delivering the CELEBRATING SIGNIFICANT MILESTONES Air Hub

Changi Airport welcomed a record of 63 million passengers in FY2017/18, achieving a 6.1% growth compared to the year before. It also reached a new milestone with airfreight throughput crossing two million tonnes for the very first time.

With the opening of T4, Changi as an air hub continues to grow from strength to strength, with an additional capacity of 16 million passengers per annum (mppa). The added capacity enables the airport to provide room for airlines to grow alongside Changi. MILLION63 PASSENGERS IN FY2017/18

METRE-LONG300 CENTRAL GALLERIA

Changi’s new T4 presents a new experience for passengers with its fully automated departure process based on a Fast and Seamless Travel (FAST) system. The terminal is the first to integrate facial recognition technology with end-to-end self-service options, making it safer, easier and faster for passengers to catch their flight.

The Changi Experience is enhanced through two large immersive digital screens in the transit areas of the terminal where passengers can soak in the sights and sounds of multimedia projections featuring cultural and travel stories, as they pass through the centralised security Changi screening area and wait for boarding. Experience REINVENTING TRAVEL EXPERIENCES S$2.5BILLION SALES IN FY2017/18

POSITIVELY SURPRISING PASSENGERS Commercial

Innovative retail concepts introduced at the new T4 are a delight to Changi’s passengers as they can now enjoy a seamless duty-free shopping experience. Browsing of the Wines & Spirits, as well as Cosmetics & Perfumes sections, is enhanced with well-integrated walkthrough spaces, and services that provide for purchases to be made in a single transaction. Beyond the traditional duty-free categories, popular local branded products displayed in heritage shophouses also add a nostalgic touch to the retail experience.

With more than 400 retail and service stores, and 140 food and beverage options offered across the airport’s terminals, Changi’s concession sales continue to outperform with a record of S$2.5 billion achieved in FY2017/18, representing a 10% year-on-year growth.

MILLION PASSENGER85 CAPACITY PER ANNUM OPENING DOORS TO A NEW ERA Development

For Changi Airport to stay ahead of the competition, continuous innovation is needed to maintain its leading edge. The upcoming Projects Jewel Changi Airport, targeted for opening in the first half of 2019, will be a game changer for Changi Airport with its wide range of lifestyle offerings. Along with the development of Jewel as a multi-dimensional, world-class lifestyle destination, T1 will be expanded. The expansion will see Changi Airport’s capacity increase to 85 million passengers per annum.

Looking ahead, the Changi East development – which includes T5, the three-runway system, network of tunnels and systems, as well as the Changi East Industrial Zone, will further provide for future capacity. This will allow Changi Airport to ride on the region’s growth in air travel, to secure Singapore’s air hub status in the future. BUILDING CHANGI’S HEARTWARE People of Changi

A big part of what makes Changi Airport today, is its ‘Heartware’. As the conductor of Changi Airport’s 50,000-strong airport community, CAG continues to develop and nurture its people and the airport community to deliver the Changi Service DNA – personalised, stress-free and positively surprising. By putting passengers at the heart of what we do, Changi Airport strives to heighten the Changi spirit of excellence and celebrate many more milestones ahead. 50,000A STRONG ONE CHANGI COMMUNITY 12 CHANGI AIRPORT GROUP

MISSION, VISION, Values

MISSION VISION

Exceptional People, Connecting Lives

To be the world’s leading We aspire to build a company where ordinary airport company, growing a safe, people achieve exceptional results. Working secure and vibrant air hub in together as a team, we bring great ideas to Singapore and enhancing the life and achieve exceptional results beyond communities we serve worldwide. our individual capabilities. Customers are our inspiration. From the youngest child to the largest corporation, we understand that what we provide connects people in ways that will enhance their lives.

VALUES

We are We value the best our in our PEOPLE BUSINESS

INTEGRITY is at the heart of everything We are we do We succeed committed with our to our CUSTOMERS PARTNERS ANNUAL REPORT 2017/18 13

CORPORATE Profile

hangi Airport Group It handled 63 million passenger the provision of consultancy and C(Singapore) Pte Ltd (CAG) movements in FY2017/18, serving airport management services. was formed on 16 June 2009 about 100 airlines flying to more Today, CAI’s presence covers major and the corporatisation of than 400 cities worldwide. With economies including Europe, the Changi Airport followed on 90,000 sqm of commercial space Middle East, South America, as well 1 July 2009. As the airport company across its four terminals, Changi as China and India. managing Changi Airport, Airport is also one of Singapore’s CAG undertakes key functions best places for shopping and At Changi Airport, there is immense focusing on airport operations dining. Increasingly, the airport pride in providing impeccable and management, air hub has become a favourite haunt for service and unrivalled capabilities development, commercial activities Singapore residents, especially to deliver the iconic Changi and airport emergency services. families. Experience. More than just a model of functionality, the Changi Over the past three decades, To grow its overseas business, CAG Experience is about connecting CAG – previously part of the Civil invests in and manages foreign passengers and engaging them, Aviation Authority of Singapore airports through its subsidiary in ways that enhance their lives. – has successfully established Changi Airports International (CAI). Every journey through Changi Changi Airport as the world’s most CAI’s objective is to build a quality Airport is an opportunity to bring awarded airport. With more than portfolio of airport investments people together and to help them 560 accolades under its belt, worldwide with strong markets and realise their aspirations. Changi has come a long way since significant development potential. its humble beginnings in 1981, Its key business activities include when T1 first opened. investments in airports, as well as

One of the world’s busiest international airports today, Changi Airport is a major air hub in Asia. 14 CHANGI AIRPORT GROUP

CHAIRMAN & CEO Message

LIEW Mun Leong LEE Seow Hiang Chairman Chief Executive Officer ANNUAL REPORT 2017/18 15

inancial year 2017/18 was stress at airport checkpoints. In the for Independent Validators F another strong year for terminal’s transit area, innovative Certification for Pharmaceutical CAG. We saw a record of 63 million retail design concepts and Handling (CEIV Pharma). During passengers pass through Changi offerings make waiting for one’s the year, CAG and its nine Airport and handled over two flight a more delightful experience. other CEIV-certified partners in million tonnes of cargo throughput Singapore launched the Pharma@ STRENGTHENING OUR POSITION AS for the first time in our history. A LEADING AIR HUB Changi initiative to pursue best Propelled by strong passenger To strengthen our air hub for standards in pharmaceuticals growth, our concession sales also sustainable long-term growth, we handling and promote Changi reached a record high of over expanded Changi’s connectivity Airport as a trusted and reliable S$2.5 billion. by riding on robust demand for air pharmaceutical cargo hub. Amid strong growth in the global travel in Asia and expanding our GROWING OUR NON-AERONAUTICAL aviation sector and increasing links to Europe and the US. During BUSINESS demand for capacity, CAG was the year, CAG added 11 new city Despite strong headwinds in the proud to commence operations links and welcomed three new retail market due to stiff competition at our new terminal, T4, during the airlines to the Changi family. from e-commerce, Changi Airport’s year. With T4, we increased Changi concession sales delivered a In Asia, our key markets of India Airport’s handling capacity by healthy growth of 10%. Throughout and China registered year-on- another 16 million passengers per the year, we kept our focus on year growth of 16.2% and 9.8% annum (mppa) bringing the total designing relevant and exceptional respectively. India was the fastest capacity to 82 mppa. shopping and dining experiences growing among Changi’s top 10 for our passengers and visitors. Underpinning these achievements country markets, while passenger has been our continued focus on traffic to and from China crossed To introduce a diverse retail mix the customer. Our efforts to deliver six million for the first time. Today, and pioneer shopping concepts, a best-in-class Changi Experience Changi is connected to 35 Chinese CAG brought in 14 new brands was once again affirmed by cities, offering more than 350 at the airside, and some 30 new travellers around the world who weekly services and 80,000 weekly brands at the landside. Among voted Changi as Skytrax’s World’s one-way seats. them, was the world’s first Louis Best Airport for the sixth consecutive Vuitton duplex airport store. Our In Europe, we closed the year time. retail spaces were also enhanced with Lufthansa resuming its to uplift the terminal experience STEPPING INTO THE FUTURE WITH T4 Singapore-Munich service, and also and passengers now enjoy new The key highlight of the year was welcomed the return of Qantas’ feature gardens like the Crystal undoubtedly the commencement daily Sydney-London A380 service Garden at T3. To reward loyal of operations at T4 on 31 October via Changi. Singapore is now shoppers and diners of Changi 2017. T4 embodies the bold spirit of Qantas’ largest hub outside of Airport, we continued to offer our CAG to embrace change and drive Australia. innovation for future growth. More Changi Rewards members with significantly, it has opened up new Advancements in aviation exclusive deals and treats. The possibilities for the development of technology have also created new Changi Rewards membership base our future terminal at Changi East. opportunities in the long-haul, now exceeds half a million. low cost segment. New In keeping with evolving digital The development of T4 saw CAG connections aided by this trends and consumer spending undertaking design and building development include the launch habits, we enhanced iShopChangi experiments, testing new concepts of Scoot’s services to Athens and to provide passengers with a more and technologies to bring more fun, Honolulu (via Osaka). vibrancy and positively surprising seamless shopping experience and travel experiences to passengers. In the air cargo sector, we greater convenience. Today, the These include automated FAST worked closely with our partners online store offers a mind-boggling check-in systems and biometric comprising airlines, ground assortment of items from over 600 security screening for higher handlers and freight forwarders brands, with value-added services efficiency and safety. Immersive to become the first airport such as complimentary delivery LED displays were introduced to community in Asia Pacific to attain service to Singapore residents and help take passengers’ minds off the the IATA Centre of Excellence more payment options. 16 CHANGI AIRPORT GROUP

ENHANCING OPERATIONAL plans for incidents within the and enhancing passenger EFFICIENCY, SAFETY AND SECURITY terminal. experience to deliver good The Changi Experience is performance. underscored by our continued In October 2017, we participated in assurance to passengers that they Exercise Northstar – a multi-agency In Brazil, passenger traffic at can enjoy peace of mind while anti-terror exercise organised by Tom Jobim International Airport travelling through Changi because the Singapore Police Force. The first remained steady despite Brazil’s we remain committed to delivering such exercise to be conducted at weak economic situation, post the operational efficiencies, and that Changi, it served to raise the level Rio Olympics. Non-aeronautical their safety and security is always of of awareness and preparedness revenue grew 13% over the previous paramount importance to us. among our airport community. year as passengers enjoyed new facilities like airline lounges and a To improve operational systems and ENHANCING INFRASTRUCTURE wider selection of dining and retail processes at Changi’s terminals, To keep pace with passenger outlets. The airport won several we expanded the FAST check-in growth, systems and facilities at awards in 2017, including the Best system at T1. We also enhanced the Changi Airport must continue to be Airport for Operational Efficiency in efficiency of our transport system kept in tip-top condition. During the Latin America. During the year, CAI by relocating the T1 taxi stands as year, infrastructure enhancements increased its effective stake in part of the terminal’s expansion were carried out both inside Tom Jobim, from 20.4% to 51%, and plans, and took the opportunity Changi’s terminals, as well as in recognised a step-up acquisition to introduce intelligent systems for the aerodrome. gain of S$98 million. more effective taxi dispatch and In T1, redevelopment works on carpark management. CAI’s four airports in Russia’s the baggage handling system Krasnodar region - Anapa, To inculcate a stronger safety continued. The terminal’s Departure Gelendzhik, Krasnodar and Sochi culture among the airport Hall was refurbished with more -- reported strong passenger community, CAG launched the automated check-in kiosks and numbers. Passenger traffic in new SWEETmini application to bag drop machines. Baggage belts FY2017/18 increased by almost 10% encourage proactive reporting and screening capabilities were compared to FY2016/17, crossing of potential hazards. We also also enhanced. the 11-million milestone for the first mandated the use of three-point time. Krasnodar International Airport At the airside, conventional aircraft grounding for enhanced and Sochi International Airport, in floodlights are being progressively lightning protection for workers particular, saw significant growth in replaced with LED floodlights to at the airside. Our efforts to the international segment, driven by provide a brighter environment ensure a safe and secure airport key markets such as Istanbul, Tbilisi, environment earned us another for workers. Tel-Aviv and Vienna. year of deficiency-free rating from Outside the airport, construction the International Federation of Air DRIVING INNOVATION TO BETTER of a central median drain was SERVE PASSENGERS Line Pilots’ Association. carried out along Airport Boulevard In delivering the Changi Experience, BUILDING RESILIENCE AND to mitigate heavy and flash floods CAG leverages technological EMERGENCY PREPAREDNESS on Changi Airport grounds. Over innovation and digitalisation to During the year, we continued at Seletar Airport, a new passenger better serve passengers who are to strengthen our emergency terminal building and three new increasingly tech-savvy. preparedness at Changi and aircraft stands were constructed to Seletar Airport through two full-scale enhance the airport’s capabilities To know our customers better, we exercise drills involving simulated to support private and business built on our centralised customer aircraft incidents at sea and on aviation. repository by integrating data land. sources from various touchpoints EXPANDING INTERNATIONALLY to gain deeper insights into the In May, the airport experienced Beyond our shores, Changi Airports preferences and needs of different a fire at T2 that required full International (CAI) continued passenger profiles. Through our evacuation. While the response to to maintain a steady portfolio Customer Discovery Insights the fire was well managed, it also overseas, with the airports in its programme, we obtain actionable presented an opportunity for us to portfolio focused on attracting new insights that enable us to better review and refine our emergency airlines, increasing flight frequencies serve our passengers. ANNUAL REPORT 2017/18 17

In 2017, CAG launched the ‘Changi requirements for the appointment Within CAG, we stayed true to Airport Living Lab’ in partnership of Changi East’s Master and Civil our values and beliefs in growing with the Economic Development Consultants. The year also saw the and empowering our people Board of Singapore. The S$50 Changi East team move to their new to create actively engaged million programme seeks to drive project office on-site in September employees. Following the physical innovation over the next five years, 2017. transformation of our workspace, collaborating with innovation- we have also begun to enable SUSTAINING FINANCIAL GROWTH driven companies and start-ups, our people with new technologies As Changi Airport moves into its next to develop and demonstrate new and services to provide our staff phase of expansion, maintaining a technology solutions in a live greater convenience and enhance strong financial position is critical to airport environment. This includes productivity. We also continued deliver sustainable growth. leveraging automation and to foster a greater sense of community through our internal robotics, data analytics and the For FY2017/18, the Group’s total communications initiatives that Internet of Things to optimise scarce revenue rose 12.9% to S$2.6 billion, encourage staff interaction. manpower resources and empower due to Changi Airport’s strong our airport workforce to operate at performance. Total operating The passion and commitment higher efficiency and productivity expenses increased by 17.7%, of our staff at CAG cannot be levels. largely a result of the consolidation better exemplified than by the of the operating results of the STAYING AHEAD OF THE CURVE late Foo Sek Min, a well-respected Brazilian airport and higher cost As demand for air travel continues colleague who demonstrated what from the opening of T4. Overall, the to grow, it is imperative for CAG it means to serve with passion and Group achieved earnings before to increase Changi Airport’s commitment to keep the Changi interest, taxes, depreciation and handling capacity and secure flag flying high. We are grateful for amortisation (EBITDA) of S$1.3 its attractiveness as a transfer his dedication and contribution to billion, an 8.4% increase from hub, through new infrastructure CAG and Changi Airport. the previous year. Total net profit developments and the upgrading attributable to the shareholder We would also like to thank our of existing terminals. stood at S$849 million, a year-on- Board Directors for their strong Jewel Changi Airport is making year growth of 28.3%. guidance and counsel during good construction progress and the year and extend a special During the year, CAG continued is set to raise its curtains in the appreciation to outgoing Director to provide financial incentives to first half of 2019. The integration of Mr Dilhan Pillay for his contributions. its airline partners through the T1’s expansion with Jewel will see We take this opportunity to Changi Airport Growth Initiative Changi Airport increase its capacity welcome our new Director, Mr Ng to incentivise airlines to pursue by another three mppa and the Chee Khern. Together, the Board traffic growth and to enhance looks forward to taking CAG to introduction of new airport facilities connectivity to Changi Airport. greater heights in the years ahead. and services to serve an expanded passenger segment. BUILDING THE PEOPLE OF CHANGI Going forward, Changi Airport’s The Changi East and T5 growth will depend on building a development plans are also on strong ‘ONE Changi Community’, track. Extension works at Runway as delivering the best service to 3 were successfully completed, our passengers will require the with the runway strengthened and dedicated effort of all organisations LIEW Mun Leong resurfaced to enable it to handle within Changi Airport. the increased weight of civilian Chairman aircraft. More than half of the design To help build a sense of common work for tunnels on the Changi purpose and deliver a ONE Changi East site have been completed in experience, CAG launched the preparation for the commencement ONE Changi mobile app to enable of construction. Having completed airport workers to connect, discuss several concept of operations learnings and get the latest news studies, the T5 team has identified updates on the airport while on- LEE Seow Hiang the functional and spatial the-go. Chief Executive Officer 18 CHANGI AIRPORT GROUP

BOARD OF Directors

6 5 4

3 2 1 ANNUAL REPORT 2017/18 19

7 8 9 10 11 12

1. LIEW MUN LEONG 4. TAN GEE PAW 7 . ERIC ANG TEIK LIM 10. MICHAEL GEORGE WILLIAM BARCLAY

2. LEE SEOW HIANG 5 . RICHARD R. MAGNUS 8 . MIGUEL KO KAI KWUN 11. PROFESSOR TAN KONG YAM

3. TAN CHING YEE 6. NG CHEE KHERN 9 . DANNY TEOH LEONG KAY 12. LIM ZHI JIAN 20 CHANGI AIRPORT GROUP

LIEW Mun Leong is a registered professional civil TAN Ching Yee Chairman engineer. He has published four Mrs Tan is a Non-Executive Director books, entitled Building People: Mr Liew is the Chairman of CAG. of CAG. She was appointed to the Sunday Emails from a CEO, He was appointed to the Board on Board on 1 May 2017. Volumes 1–3 and Building People 16 June 2009. Volume 4: Sunday Emails From Mrs Tan is the Permanent Secretary Mr Liew was the founding Group a Chairman. of the Ministry of Finance, President and CEO of CapitaLand Singapore. She also holds the Limited. He is currently the LEE Seow Hiang appointment of Permanent Chairman of Surbana Jurong Secretary (Special Duties), Prime Chief Executive Officer Private Limited. Mr Liew sits on the Minister’s Office. She assumed boards of Singapore Exchange, Mr Lee is the CEO of CAG. He these posts on 1 May 2016. She is Singapore China Foundation was appointed to the Board as Chairman of the Inland Revenue and the Chinese Development Executive Director on 16 June 2009. Authority of Singapore and the Assistance Council. He also chairs Accounting and Corporate the Management Advisory Board of Mr Lee is concurrently Deputy Regulatory Authority, and a Board NUS Business School and Temasek Chairman of Changi Airports member of the National Research Foundation Nurtures CLG Ltd. He International Pte Ltd and Chairman Foundation. is a Senior International Business of Jewel Changi Airport Trustee Advisor in Temasek. Pte Ltd. He holds the appointment She was previously Permanent of President of Airports Council Secretary at the Ministry of Mr Liew is the Provost’s Chair International (ACI) Asia Pacific Health and the Ministry of Professor (Practice) (pro bono) Regional Board and is a Member Education. Before that, she in NUS Business School, Faculty on the ACI World Governing Board. was the Chief Executive of the of Engineering and the Lee Kuan He also sits on the Board of NTUC Infocomm Development Authority, Yew School of Public Policy. He is FairPrice Co-operative Ltd and Singapore, and also Deputy also the Rector of NUS Ridge View SMRT Corporation Ltd. Secretary (Infocomm and Media Residential College. Development) at the former Ministry Prior to the corporatisation of CAG, of Information, Communications He was elected the President of Mr Lee was Deputy Director-General and the Arts. Prior to these roles, International Organisation for (Operations) of the Civil Aviation she had worked at the Ministry of Standardisation (ISO) for the term Authority of Singapore. From 2005 Education and Ministry of Trade 1997 to 1998. to 2008, he was the Principal Private and Industry. With over 46 years of experience Secretary to Minister Mentor Lee in the construction and real Kuan Yew in the Prime Minister’s Mrs Tan read Economics at estate industries both locally Office. From 1989 to 2005, Mr Lee Cambridge University and and overseas, Mr Liew has been held various appointments in the obtained her Masters of Science in involved in several of Singapore’s Republic of Singapore Air Force Management from the Graduate public sector projects, including (RSAF) and the Ministry of Defence, School of Business, Stanford the development of Changi Airport with his last appointment being University. from the beginning in 1975. For Deputy Head of Air Operations in HQ RSAF. his exceptional contributions, Mr TAN Gee Paw Liew was awarded the Meritorious Mr Lee was awarded both the Service Medal by the President of Mr Tan is a Non-Executive Director SAF (Overseas) and President’s Singapore in 2011. In 2016, Mr Liew of CAG. He was appointed to the Scholarship in 1989 and the SAF was conferred France’s National Board on 1 May 2017. Postgraduate Scholarship (General Order of the Legion of Honour Development) in 2002. He holds a Mr Tan previously served as (Ordre national de la Légion Bachelor of Arts (Honours) from the Chairman of the Public Utilities d’honneur), with the rank of Knight. University of Cambridge, UK, and a Board, Singapore’s national water Mr Liew graduated from the Master of Business Administration agency from 1 April 2001 until his University of Singapore with a from the Massachusetts Institute of retirement on 31 March 2017. degree in Civil Engineering and Technology, USA. Mr Tan is a member of a number ANNUAL REPORT 2017/18 21

of government committees. Service Order in 2010 for his work Mr Magnus is a retired (now He is Chairman of Nominating as Chairman of PUB. In 2011, Mr Tan termed Chief) District Judge. He Committee, Lee Kuan Yew Water was conferred the Distinguished was awarded the Meritorious Prize, Singapore International Engineering Alumni Award by Service Medal for his exceptional Water Week. He is the Adjunct the NUS; and the NUS Society public service and awarded the Professor, Dean’s Office, Faculty of Distinguished and Outstanding Outstanding Volunteer award by Engineering, National University of Member Award by NUS in 2014. He the Ministry of Social and Family Singapore. Previous appointments was elected an Honorary Fellow Development, and the Public held by Mr Tan were Principal of the Institution of Engineers, Service Star by the State in 2015. of Ngee Ann Polytechnic, and Singapore and awarded the Mr Magnus graduated from Permanent Secretary of the then Lifetime Engineering Achievement National University of Singapore Ministry of the Environment. He Award in 2015. Mr Tan was also with a Masters of Laws. He is also is currently a member of CAG’s elected as a Fellow of the Academy an alumnus of the Harvard Business Executive Committee on Airport of Engineering, Singapore in 2012. School and the John F Kennedy Development and a Director of School of Government. Surbana Jurong Private Limited. Richard R. MAGNUS He is also an Adjunct Professor in the Lee Kuan Yew School of Mr Magnus is a Non-Executive NG Chee Khern Public Policy, National University of Director of CAG. He was appointed Singapore. to the Board on 23 July 2010. Mr Ng is a Non-Executive Director of CAG. He was appointed to the Mr Tan graduated with First Class Mr Magnus has several public Board on 1 March 2018. Honours in Bachelor of Engineering and private sector responsibilities. (Civil) from the University of Malaya Among others: Mr Magnus is Mr Ng is Permanent Secretary in 1967, and a Master of Science currently Chairman of the Public for Smart Nation and Digital in Systems Engineering from the Transport Council, Public Guardian Government in the Prime Minister’s University of Singapore in 1971. Advisory Committee, Political Films Office formed in May 2017. He is also the Chairman of the He was conferred an Honorary Advisory Committee, Bioethics Government Technology Agency Degree of Doctor of Science from Advisory Committee, Ministry of of Singapore board, a Director of the University of Westminster, UK in Home Affairs’ Remote Gambling the boards of CapitaLand Mall 1993, and an Honorary Doctorate Act Appeals Advisory Panel and Trust Management and a board in Engineering from Sheffield is a Member of the Public Service member of the National Research University, UK in 1995. In 2013, he Commission and the Ministry Foundation. was conferred an Honorary Degree of Home Affairs’ Independent of Doctor of Engineering by the Review Panel. In the private Mr Ng previously held the following Nanyang Technological University. sector, Mr Magnus serves on the positions: Permanent Secretary boards of Temasek Foundation (Defence Development) in Mr Tan received the Public Cares CLG Limited, CapitaLand Singapore’s Ministry of Defence, 2nd Administration Medal (Silver) Mall Trust Management Ltd, Permanent Secretary in Singapore’s in 1978 and a Special Award Singapore Consortium Investment Ministry of Health from August 2014 (Gold Medal) for Clean River Management Limited, and is to February 2016, Director of the Commemoration in 1987. He Chairman of the Management Security and Intelligence Division also received the Medal of Board of Human Capital from 2010-2014, and Chief of the Commendation at the NTUC May (Singapore) Pte Ltd. He was the Republic of Singapore Air Force Day Award in 2005, the President’s Founding Chairman of the Casino from 2006-2009. Mr Ng was also a Award for the Environment in 2007 Regulatory Authority. He is also board member of the Civil Aviation and the President’s Science and Singapore’s First Representative Authority of Singapore. Technology Medal in 2015. to the ASEAN Inter-Governmental Mr Tan was conferred the Commission on Human Rights, Mr Ng was a recipient of the Meritorious Service Medal in Vice-Chairman of UNESCO’s President’s Scholarship and 2001 for his work as Permanent International Bioethics Committee. Singapore Armed Forces Overseas Secretary of the then Ministry of the He is also an Adjunct Professor as Scholarship. He holds a Bachelor Environment and the Distinguished well as a Justice of the Peace. of Arts (Honours) and a Master 22 CHANGI AIRPORT GROUP

of Arts in Philosophy, Politics and Mr Ko was Chairman and President Council and Board. He also held Economics from the University of of Starwood Hotels & Resorts, various other positions at KPMG, Oxford. He also graduated with a Asia Pacific Division. Prior to his including Head of Audit & Risk Master of Public Administration from appointment, Mr Ko was Deputy Advisory Services (Singapore), Harvard University. Chairman and CEO of CDL Hotels Head of Risk Advisory Services International. Between 1992 and (Asia-Pacific) and Head of Financial 1999, Mr Ko was the President Services (Singapore). Eric ANG Teik Lim of Asia-Pacific at Pepsi-Cola International. Mr Teoh qualified as a Chartered Mr Ang is a Non-Executive Director Accountant in the UK in 1981 of CAG. He was appointed to the Widely recognised for his and is a member of the Institute Board on 18 November 2009. knowledge and insight of business of Chartered Accountants of and culture in the Asia Pacific England and Wales. He is currently Mr Eric Ang is a career DBS tourism industry, Mr Ko was voted a fellow of the Institute of Chartered banker with 40 years of banking Regional Hotel Chief of the Year Accountant’s Singapore. In his experience and until 31 May 2014, (2007 and 2008) by the readers of current appointment as an was responsible for the capital the Travel Weekly. He was named independent Director of various markets business. He is now a Visionary Leader of the Year and boards, he also serves as the Senior Executive Advisor at DBS a recipient of the Global Awards Chairman of the Audit Committee Bank and is principally responsible at the World Travel Mart (2007) in and Board Risk Committee. for business origination and high London and honoured the Lifetime level relationship building for the Achievement Award 2012 at the bank. China Hotel Investment Conference Michael George William BARCLAY His current directorships include in Shanghai. Mr Barclay is a Non-Executive Sembcorp Marine Ltd, Raffles Director of CAG. He was appointed Mr Ko has a Bachelor in Business Medical Group, Surbana Jurong to the Board on 16 June 2009. Administration in Economics from Pte Ltd, DBS Foundation Ltd and the University of Massachusetts and Mr Barclay is the Group CEO of NetLink NBN Management Pte Ltd. a Masters in Business Administration Mandai Park Holdings (MPH). He is also the Co-Chairman of the from Suffolk University. He is also He oversees both Mandai Park SGX Disciplinary Committee. He was a non-practicing Certified Public Development, the entity set up to previously a director of Accountant by the State Board of drive the rejuvenation of Mandai Hwang Capital Malaysia Bhd. Accountancy in New Hampshire in into an integrated wildlife and the U.S. Mr Ang graduated from the nature precinct, and Wildlife Reserves Singapore, the operator University of Singapore with a Danny TEOH Leong Kay Bachelor of Business Administration of four award-winning attractions – (Honours) degree. Mr Teoh is a Non-Executive Director Jurong Bird Park, Night Safari, River of CAG. He was appointed to the Safari and Singapore Zoo. Board on 23 July 2010. Miguel KO Kai Kwun Prior to joining Mandai Park Mr Teoh is currently Chairman of Holdings, Mr Barclay was CEO of Mr Ko is a Non-Executive Director M1 Ltd and a Board Member of the Sentosa Development Corporation of CAG. He was appointed to the following companies: Ascendas- for seven years. This followed Board on 7 September 2009. Singbridge Pte Ltd, DBS Ltd, DBS on from stints as Regional Vice Bank Holdings, DBS Bank (China) President Asia for the International Mr Ko is currently the Executive Ltd, DBS Foundation Ltd and Air Transport Association and Chief Director and Group CEO of Keppel Corporation Ltd. Executive of SilkAir. Mr Barclay Ascendas-Singbridge. Mr Ko is began his career with Singapore also the Chairman of Ascendas Mr Teoh was a Managing Partner Airlines, holding various portfolios Hospitality Fund Management of KPMG in Singapore until his in Singapore, Germany, Switzerland, Pte Ltd/Ascendas Hospitality Trust retirement on 30 September 2010. Belgium and the UK. Management Pte Ltd and Deputy During this time, he served as a Chairman of Ascendas Funds member of KPMG’s Asia-Pacific Mr Barclay has a Master of Science Management (S) Ltd. Previously, Board and the KPMG International degree in Transport Planning & ANNUAL REPORT 2017/18 23

Engineering from the University Institution at Stanford University and of Leeds and has completed the World Bank in Washington. Advanced Management Program at Harvard Business School. Professor Tan is a graduate of Princeton University with a Bachelor of Art (Honours) and has a PhD in Professor TAN Kong Yam Economics from Stanford University. Professor Tan is a Non-Executive Director of CAG. He was appointed LIM Zhi Jian to the Board on 30 January 2015. Mr Lim is the Alternate Director Professor Tan is presently Professor to Mrs Tan Ching Yee. He was of Economics at the Nanyang appointed to the Board on Technological University and 1 May 2017. Co-Director of the Asia Competitiveness Institute at the He is Director (Reserves and Lee Kuan Yew School of Public Investment) at the Ministry of Policy at the National University Finance. Prior to joining the Ministry of Singapore. He is also Deputy of Finance in June 2016, he held Chairman of APS Asset appointments in the Ministry of Management (China) and Manpower and the Monetary sits on the boards of Surbana- Authority of Singapore. In the Jurong, Ascendas-Singbridge Ministry of Manpower, he was the and CapitaRetail China Trust Deputy Director of the Foreign Management. Workforce Policy Department. In the Monetary Authority of Singapore, From 1984 to 1988, Professor he held the positions of Deputy Tan was the assistant director Director of the Strategic Planning on exchange rate policy at the Office and Senior Policy Analyst of Monetary Authority of Singapore the Prudential Policy Department. and assistant to the late Dr Goh Keng Swee, the former Deputy Mr Lim was awarded the Overseas Prime Minister of Singapore, who Scholarship by the Monetary had been invited by Mr Deng Authority of Singapore and Xiaoping to advise China on graduated from Carnegie Mellon economic development strategy. University with a double major From June 2002 to June 2005, he in Computer Engineering and was a senior economist at the Economics. He also holds a Masters World Bank office in Beijing. In in International Policy from Stanford 2004, he was a member of the University and a Master in Public World Bank expert group on the Administration Edward S. Mason 11th five-year plan (2006 to 2010) Program (Mason Program) from the for the State Council in China. The Harvard Kennedy School. expert group provided analysis and policy recommendations to the Chinese government. Prior to that, he was the chief economist of the Singapore government at the Ministry of Trade and Industry (1999 to 2002) and head of the Department of Strategy and Policy at the NUS business school. He has also worked at the Hoover 24 CHANGI AIRPORT GROUP

EXECUTIVE MANAGEMENT Team

1

4

2 CHANGI Airport Group

1 . LEE Seow Hiang 5 Chief Executive Officer 2 . TAN Lye Teck Executive Vice President, Airport Management 3 . YAM Kum Weng Executive Vice President, Airport Development & Advisor, Air Hub Development 4 . LIM Peck Hoon Executive Vice President, 3 Commercial 5 . NG Lai Leng Chief Financial Officer, Executive Vice President, Corporate, Executive Vice President, 6 Enterprise Performance & Development

CHANGI Airports International

6 . LIM Liang Song Chief Executive Officer ANNUAL REPORT 2017/18 25

MANAGEMENT Team

CHANGI AIRPORT GROUP

CHOY Da Wen LEONG Kok Hoong Leslie PAKIANATHAN Group Senior Vice President, Senior Vice President, Project Director, Transformation & Enterprise Development Contracts & Tunnel Construction Management Development Cost Control Ivan TAN CHUNG Choon San Albert LIM Group Senior Vice President, Project Director, Senior Vice President, Corporate & Marketing Changi East Construction Passenger Experience Communications Jayson GOH LIM Ching Kiat Justina TAN Managing Director, Managing Director, Managing Director, Airport Operations Management Air Hub Development People HUNG Jean LIM Wee Ping TAN Boon Seng Chief Executive Officer, Senior Vice President, Project Director, Jewel Changi Airport Development Business Development Project Control KOH Miaw Ling LING Ming Koon TAN Kok Siong Senior Vice President, Senior Vice President, Project Director, T5 Building Airport Operations Planning Changi East Construction & Strategy KOH Ming Sue TENG Hwee Onn Managing Director, Jessie LOONG Senior Vice President, Engineering & Development Senior Vice President, Engineering Management & Legal/Company Secretary Systems Planning LECK Siew Leng Senior Vice President, Matthew NGAN TEO Chew Hoon Internal Audit Senior Vice President, Group Senior Vice President, Mechanical & Electrical Airside Concessions Audrey LEE Group Senior Vice President, ONG Chee Chiau WEN Dazhi Economic Affairs Group Senior Vice President, Senior Vice President, Tunnel Design Management Steve LEE Changi East T5 Planning Chief Information Officer/ ONG Sim Lian Ivy WONG Group Senior Vice President, Group Senior Vice President, Senior Vice President, Technology Design Management Strategy & Transformation LEONG How Yin Cletus PACKIAM YEO Kia Thye Project Director, Chief, Managing Director, Changi East Planning, Airport Emergency Services Airport Operations Planning Design & Construction & Airside

CHANGI AIRPORTS INTERNATIONAL

CHAN Mew Yoong Peter LEE SEE Ngee Muoy Director and Head, Managing Director, Managing Director, Human Resources Changi Airport Planners Legal and Compliance and Engineers Eugene GAN James THONG Managing Director, LOW Beng Lan Managing Director, Asset Management Chief Financial Officer Consultancy NG Kuan Luen Director and Head, (As of 10 May 2018) Risk Management 26 CHANGI AIRPORT GROUP Awards ACCOLADES RECEIVED BY CHANGI AIRPORT (FY2017/18)

MONTH CATEGORY & AWARDS NO. OF TIMES PUBLICATION/ORGANISATION 20 18 World’s Best Airport 2018 9 Skytrax Airport of the Year Above 20 Million Mar 3 Air Transport News Passengers Best Airport (Overseas) 1 TTG China Best Airport in the World 13 DestinAsian Feb Top Worldwide Airport 16 Wanderlust International Federation of Air Line Pilots’ Jan Deficiency-Free 2017 37 Associations (IFALPA)

MONTH CATEGORY & AWARDS NO. OF TIMES PUBLICATION/ORGANISATION 20 17 Best Overall Airport in the World 3 Global Traveler, US World's Leading Airport 12 World Travel Awards Dec Best Overseas Airport 13 Selling Travel Best Airport in the World 24 Business Traveler, US Favourite Airport 7 Condé Nast Traveller, India Nov Best Airport in the World 13 Business Traveller, China Best Airport in the World 6 Travel + Leisure, India and South Asia Top Airport in the World 9 Condé Nast Traveler, US Oct Best Airport in the World 30 Business Traveller, UK Travel Hall of Fame – Best Airport of the Year 15 TTG Asia Sep Best Airport in the World 25 Business Traveller, Asia Pacific Best Airport in the World 11 Condé Nast Traveller, UK Aug Best Airports Worldwide 9 Smart Travel Asia Best International Airport in the World 5 Travel + Leisure, US Jul Best Airport Worldwide 24 Business Traveller, Germany World’s Best Airport 1 AirHelp Jun Asia's Leading Airport 14 World Travel Awards Best Airport in the World 11 Ultratravel May Favourite Airport 1 International Traveller Best Airport in the World 14 Business Traveller, Middle East Airport Authority with the Most Supportive Duty Free News International & Travel 9 Apr Approach to Travel Retail Retailer International Airport Authority in Asia/Pacific with the Most Duty Free News International & Travel 17 Supportive Approach to Travel Retail Retailer International ANNUAL REPORT 2017/18 27

FINANCIAL Review

FINANCIAL HIGHLIGHTS

FY2013/14 FY2014/15 FY2015/16 FY2016/17 FY2017/18

PROFIT & LOSS (S$’MIL)

Total revenue 2,106 2,150 2,164 2,305 2,602

Total expenses 1,185 1,255 1,284 1,401 1,649

EBITDA 1,187 1,171 1,167 1,208 1,310

Profit after tax 896 782 784 657 835

Profit attributable to equity holder 896 784 786 662 849 of the Company

FINANCIAL POSITION (S$’MIL)

Assets 6,684 7,564 8,460 9,260 14,894

Liabilities 937 1,441 1,874 2,223 6,457

Equity 5,747 6,123 6,586 7,037 8,437

FINANCIAL RATIOS

EBITDA margin 56.3% 54.5% 53.9% 52.4% 50.3%

NPAT margin 42.5% 36.4% 36.2% 28.5% 32.1%

Return on equity 16.5% 13.2% 12.3% 9.6% 11.6% 28 CHANGI AIRPORT GROUP

THE YEAR IN REVIEW consolidation of the Brazilian OPERATING REVENUE Changi Airport recorded strong airport and higher costs with the The Group’s operating revenue growth in passenger movements opening of T4. With T4, Changi grew 12.9% to S$2.6 billion, of which of 6.1% in FY2017/18 to reach Airport will be able to handle up 94.1% comprised revenue from 63 million passenger movements, to 16 million passengers a year, Changi Airport. fortifying Changi’s position as the increasing its total annual capacity Changi Airport Operations sixth busiest airport in the world in to 82 million passengers. The increase in passenger traffic terms of international passenger Overall, the Group achieved of 6.1% from 59.4 million to 63 traffic. Indonesia continued to rank earnings before interest, taxes, million boosted Changi Airport’s as Changi Airport’s largest country depreciation and amortisation revenue growth. In particular, market, followed by Malaysia, (EBITDA) of S$1.3 billion in revenue from airport services China, Thailand and Australia. FY2017/18, representing an (which comprised largely landing, Notably, India and China registered improvement of 8.4% from the parking and aerobridge charges, highest double-digit year-on- previous year. The improvement as well as passenger service year (y-o-y) growth of 16.2% and was largely due to the 6.1% charges) increased by 12.1% from 9.8% respectively, spurred by the growth in passenger movements S$700 million to S$785 million. CAG addition of new city links and at Changi Airport, and in part continued to support its airline increase in flight frequencies to due to the consolidation of the partners through multiple incentive both countries. Brazilian airport which contributed and collaborative programmes During the year, Changi welcomed S$41 million or 3.1% to the Group’s under the Changi Airport Growth three new passenger airlines and EBITDA. The Group also achieved Initiative (CAGi) to incentivise established eleven new city links. net profit attributable to the airlines to pursue growth, drive In addition, Changi welcomed the shareholder (Net Profit) of S$849 traffic and enhance connectivity return of Ethiopian Airlines linking million, representing a y-o-y growth to Changi Airport. Revenue from Changi to Addis Ababa, a key of 28.3% (or S$187 million). There security services increased 6.2%, gateway to and from Africa. was a valuation gain of S$98 in tandem with passenger traffic million arising from the step-up growth. Driven by the increase in acquisition of the Brazilian airport passenger traffic, both (as opposed to an impairment Airport concession and rental aeronautical revenue and non- loss in overseas airport investments income increased by 6.6% to aeronautical revenue registered last year). reach S$1.26 billion. It continues to growth and helped Changi Airport Group and its subsidiaries (the Group) deliver a strong financial performance. The Group’s operating revenue increased by 12.9% to reach S$2.6 billion. In December 2017, Changi Airports 10% International (CAI), a wholly-owned S$282 subsidiary of Changi Airport Group, 32% assumed majority control of Tom S$820 Airport services Jobim International Airport in Rio FY2017/18 de Janeiro, Brazil, increasing its GROUP REVENUE Security services initial stake in the concessionaire Airport concessions from 20.4% to 51% shareholding. S$2,602 and rental income The acquisition of Tom Jobim also (million) 8% 50% Others contributed to an increase in S$1,298 S$202 operating revenue to the Group in FY2017/18.

On the cost front, operating expenses grew 17.7% to S$1.6 billion, largely due to the ANNUAL REPORT 2017/18 29

contribute approximately half of the to drive concession sales. The to invest in and drive innovation, Group’s total operating revenue. strong performance from the non- embarking on numerous pilot Despite the challenging conditions aeronautical segment enables projects to improve security, safety in downtown retail, concession CAG to subsidise and keep and efficiency of airport operations, sales registered a healthy growth aeronautical charges at Changi as well as to develop strategy of 10% y-o-y to a record of more Airport competitive. in response to the opportunities than S$2.5 billion. This was delivered and threats of e-commerce and through the continual refreshment OPERATING EXPENSES changing consumer behaviour. and revamp of our retail offerings, The Group’s operating expenses Aside from investing in innovation, as well as deeper engagement increased by 17.7% to S$1.6 billion CAG continued to work closely with with our shoppers. New brands in FY2017/18. The increase was partners in the airport community and concepts were injected during largely due to higher operating to drive a stronger service culture the year, offering passengers expenses with the opening of and guide the service teams in more shopping and dining T4, and the additional operating their interactions with customers at options. During the year, Changi expenses of the Brazilian airport all touchpoints. introduced the world’s first airport which was consolidated in the last duplex for luxury fashion brand, quarter of the financial year. FINANCIAL POSITION Louis Vuitton, in T3’s Central Piazza, Shareholder’s equity increased elevating shopping experience Changi Airport Operations by 20% or S$1.4 billion to reach for our passengers. Changi also Changi’s operating expenses S$8.4 billion, with a strong asset opened its first integrated duty- increased by 7.4% in FY2017/18, base of S$14.9 billion. The growth free shopping zone in T4, allowing largely attributed to the opening of in the Group’s total equity was passengers to pay for all their T4 which commenced operations attributed to the Net Profit of S$849 purchases from both The Shilla Duty on 31 October 2017, following 12 million achieved during the year, Free and DFS outlets in a single months of rigorous Operational as well as the accounting of non- transaction. Readiness and Airport Transfer trials. controlling interest in the Brazilian airport. To drive concession sales at the Higher expenses were also incurred airport, concerted marketing for the payment of CAAS services, The Group’s strong financial and promotion efforts were as well as for the provision of position strengthens its ability undertaken, including a revamp passenger services and security to invest in capital expenditure of iShopChangi.com with new related operations. CAG continued to upkeep and enhance the and improved features. Through iShopChangi, tenants are able to reach passengers beyond the terminals, offering time-pressed passengers the convenience and comfort of shopping before they step into Changi. To further enhance passengers’ retail 15% 16% experience, secure payment S$257 S$260 Maintenance of land, buildings and equipment modes were added as well as a home delivery service Depreciation and FY2017/18 amortisation for Singapore residents. Loyal GROUP EXPENDITURE shoppers can also accumulate 25% Government charges 22% and CAAS services Changi Rewards points for instant S$411 S$1,649 S$357 dollar redemptions on their next (million) Services, security and other related expenses purchases. During the year, the Changi Rewards membership base Employee compensation exceeded half a million. CAG’s 22% anchor retail campaigns, ‘Be a S$364 Changi Millionaire’ and the annual year-end festive promotions were also well received and helped 30 CHANGI AIRPORT GROUP

has acquired for the Brazilian airport for a period of 25 years, starting in 2014. 7% S$1.1 An interim sinking fund reserve 14% apportioned out from the Group’s S$2.1 retained earnings, has been Property, plant and created to fund the Changi FY2017/18 equipment and TOTAL ASSETS investment property East development project. The 45% contribution to this sinking fund S$6.7 Intangible assets S$14.9 in FY2017/18 was S$234 million, (billion) Cash and cash bringing the cumulative amount in equivalents 34% this fund to S$410 million. S$5.0 Others Concession payable accounted for 55% of total liabilities. This represents the obligations that the Brazilian airport has to the Brazilian National Agency of Civil Aviation, for the right to operate the airport.

The Group’s total loan and borrowings of S$1.3 billion airport facilities, as well as to fund Cash and cash equivalents comprised loans used to support significant development projects. amounted to S$2.1 billion. The the construction of Jewel, which is During the year, the Group invested surplus cash has been earmarked scheduled to open in the first half for the funding of on-going close to S$1.2 billion for the of 2019, and loans undertaken by development projects. Intangible the Brazilian airport. enhancement and development assets of S$5 billion arose from the of infrastructure, including T1 acquisition and consolidation of expansion, Jewel Changi Airport the Brazilian airport and comprised (Jewel), T4, three-runway system largely the unamortised cost of the and Changi East Development. concession right that the Group

7% S$0.5 17% S$1.1 Concession payable FY2017/18 TOTAL LIABILITIES 55% Loan and borrowings S$3.5 Trade and other S$6.4 payables (billion) Others 21% S$1.3 ANNUAL REPORT 2017/18 31

CORPORATE Governance

The Board and Management of CAG are deeply The profiles of the Directors can be found on pages committed to our Company’s central core value – 20 to 23 in this annual report. Changi Airports integrity – which is at the heart of all we do. We strive to International (CAI), a wholly-owned subsidiary, has a meet and maintain the highest standards of corporate separate Board of Directors. governance, professionalism and integrity to build a company which stakeholders can be proud of. To thrive 4. The roles of the Chairman and the CEO are and to operate a sustainable business over the long separate and distinct. The Chairman leads the term, and to uphold and protect the Company’s brand Board and facilitates effective and comprehensive and reputation, CAG strongly believes that it has to be Board discussions and decision-making on accountable to its immediate business and regulatory strategic issues, while the CEO has full executive environment, as well as to the global community. responsibility for the management of CAG’s businesses and implementation of the Group’s CAG’s Code of Conduct sets out the principles, strategies and policies. policies and standards of conduct that it expects of all employees in their day-to-day activities and in the 5. Six committees have been formed to assist the decisions they make. The Company has implemented Board in the detailed consideration of various a whistle-blowing framework to detect and deter matters. These are the Executive Committee unethical or illegal conduct, while protecting whistle- (EXCO), Executive Resource and Compensation blowers from retaliation. Committee (ERCC), Audit Committee (AC), Tenders Committee (TC), Executive Committee on Airport Development (ECAD) and Operational Risk and THE BOARD OF DIRECTORS Safety Committee (ORSC). Each committee is governed by its own terms of reference, which 1. CAG’s Board of Directors is our highest decision- sets out the scope of the committee’s duties and making body, which oversees the Company’s responsibilities. Ad-hoc committees are also formed long-term strategies and provides management to review specific issues from time to time. guidance for continuing and steady growth, while protecting the interests of stakeholders. 6. The Board meets at least four times a year.

Composition and Balance Access to Information 2. The Board, headed by Non-Executive Chairman, 7. Prior to each Board meeting and when necessary, Mr Liew Mun Leong, comprises 12 Directors, of the Board is provided with pertinent information – whom only the CEO, Mr Lee Seow Hiang, is an including updates on the Company’s operating Executive Director. The majority of our Board and financial key performance indicators, members are independent. Our Directors are legislative, industry and other significant individuals with broad and diverse expertise and developments relating to the Group – which experience. enables the Board to make informed and sound decisions. The Board has full access to the Senior 3. The Board Directors of the Company are: Management team and the Company Secretary. Should the Directors require independent Mr Liew Mun Leong - Chairman professional advice on matters relating to the Mr Lee Seow Hiang - CEO businesses or issues affecting their duties, the Mrs Tan Ching Yee - Shareholder Representative Company will, at its expense, arrange for the Mr Tan Gee Paw appointment of relevant professional advisors. Mr Richard R. Magnus Mr Ng Chee Khern Mr Eric Ang Teik Lim Mr Miguel Ko Kai Kwun CAPITAL & INVESTMENTS Mr Danny Teoh Leong Kay 1. The members of the EXCO are: Mr Michael George William Barclay Professor Tan Yong Kam Mr Liew Mun Leong - Chairman Mr Lim Zhi Jian Mrs Tan Ching Yee (Alternate Director to Mrs Tan Ching Yee) Mr Eric Ang Teik Lim 32 CHANGI AIRPORT GROUP

Mr Richard R. Magnus Audit Matters Mr Lee Seow Hiang 2. The AC comprises the following non-executive 2. The EXCO reviews and recommends to the Directors: Board financing and investment strategies of the Mr Danny Teoh Leong Kay - Chairman Company and approves significant investments by Mrs Tan Ching Yee the Company and CAI. The EXCO also approves Mr Eric Ang Teik Lim treasury matters such as banking and credit facilities, granting of corporate guarantees, 3. The primary role of the AC is to assist the Board to debt capital market issuance, opening of bank review the adequacy of the Company’s internal accounts as well as hedging policies. EXCO also control systems in ensuring that the financial sets the financial limits for operations, procurement records have been properly maintained and that and treasury of the Company. its financial statements give a true and fair view of the Company’s performance and position. In addition, the AC is also responsible for reviewing EXECUTIVE RESOURCE AND COMPENSATION the effectiveness of financial, compliance and risk management frameworks, as well as the robustness 1. The ERCC comprises the following non-executive of the reporting processes. The AC also reviews Directors: the adequacy of mechanisms put in place for the Mr Liew Mun Leong - Chairman Company’s employees, partners, suppliers and Mr Eric Ang Teik Lim contractors to raise concerns in confidence; the Mr Miguel Ko Kai Kwun procedures for independent investigation of the matters reported and ensures appropriate follow- 2. The ERCC supports and advises the Board on up, investigation and resolution. remuneration matters, leadership succession and development. The roles of the ERCC include: 4. The AC performs independent review of the financial statements of the Company; reviews the a. reviewing and approving the policy for key areas of management judgment applied for determining executive remuneration, including adequate disclosure, critical accounting policies the remuneration packages, service contract and any significant changes that would have a terms and benefits programme for key material impact on the financial statements. management executives; 5. The AC reviews the adequacy and effectiveness b. approving the appointment of key of the internal audit function and its processes, management executives, overseeing their as well as ensures it is adequately resourced development and reviewing succession plans to and set up in the organisation to carry out its ensure a strong pipeline of talent to enable the function. The AC reviews Internal Audit Division’s continued success of the Company; and plans, its effectiveness, and the audit scope, and also approves its budget. The AC also reviews c. recommending the remuneration framework, the audit reports to verify the effectiveness of including fees for non-executive Directors. actions taken by Management on the auditors’ recommendations and observations.

ACCOUNTABILITY AND AUDIT 6. The AC reviews and approves the external audit plan; the scope and results of the external Accountability audit and the independence and objectivity 1. Management provides all members of the Board of the external auditors. The AC also reviews the with reports on operating and financial information external audit reports to ensure that significant and key performance indicators on a quarterly findings and observations regarding control basis and as the Board may require from time weaknesses are promptly rectified. Prior to making to time, to enable the Board to make balanced recommendations to the Board on the external and informed assessments of the Company’s auditor’s appointment or reappointment, the performance, position and prospects. AC reviews the external auditor’s independence, ANNUAL REPORT 2017/18 33

objectivity and quality of work based on Audit 3. The Company’s internal and external auditors Quality Indicator framework established by the review the key internal controls of the Company Accounting and Corporate Regulatory Authority. In for material non-compliance or failures in internal line with best practice, the external audit partner controls and recommend areas of improvements. is rotated every five years. The AC also reviews the The AC also reviews the effectiveness of the action non-audit fees awarded to the external auditors to taken by Management on the recommendations ensure that the non-audit services performed by made. them would not affect their independence. 4. The AC also reviews the effectiveness of the 7. The AC meets with the internal and/or external enterprise risk management framework and the risk auditors three times during the year. At least one of management processes put in place to manage these meetings is conducted without the presence financial and strategic (business) risks while of Management, where the auditors may raise meeting business objectives. issues encountered in the course of their work 5. A separate committee, the Tenders Committee directly to the AC. (TC), evaluates and approves the award of tenders for goods and services exceeding S$50 million, with the exception of those related to new INTERNAL CONTROLS development projects and major redevelopment 1. The Board and Management of the Company are projects at Changi Airport, which come under the fully committed to maintaining a robust system of purview of the ECAD. The TC is chaired by a non- internal controls, procedures and risk management executive Director and comprises the following to safeguard our shareholder’s interests and the Directors: Group’s assets. The Board delegates its oversight Mr Michael George William Barclay - Chairman responsibilities for internal controls, and financial Mr Richard R. Magnus and strategic (business) risk management to the Mr Lee Seow Hiang AC, which ensures effectiveness and adequacy of the system of internal controls in the Company, Internal Audit while the ORSC assists the Board in reviewing the 6. IA assists the AC to ensure that the Company operational and safety risk management system maintains sound risk management and internal put in place by Management. control systems. IA is independent of the activities it 2. The internal controls established by the Company audits. It conducts regular audits of high risk areas, are supported by systems, processes and people. and undertakes investigations as directed by the CAG’s three lines of defence for risk management AC. It comprises suitably qualified and experienced are as follows: staff, headed by the Senior Vice President, Internal Audit (SVP, IA). SVP, IA reports functionally to the • the first line of defence is the business units who Chairman of the AC, and administratively to are responsible for identifying and managing the CEO. To ensure the independence of the IA risks inherent in their businesses; function, the IA team has unrestricted access to the AC. • the second line of defence comprises the oversight and control functions such as 7. IA adopts a risk-based approach in its audit Enterprise Risk Management, Legal, Aerodrome work, focusing on key internal controls, including Safety, Aviation Security, Information Security, financial, operational and compliance controls. and Enterprise Performance divisions, and Internal audit practices are also guided by the International Standards for the Professional Practice • Internal Audit (IA), which provides an of Internal Auditing set by the Institute of Internal independent assessment and assurance on the Auditors. reliability, adequacy and effectiveness of our system of internal controls, risk management 8. Audits are carried out on all significant business procedures, governance framework and units and processes in the Company. The processes, forms the third line of defence. annual audit plan is developed in consultation 34 CHANGI AIRPORT GROUP

with, but independent of Management and is approved by the AC. IA’s report on findings and recommendations are submitted to the AC and a summary of key findings and recommendations discussed at the AC meetings. IA also tracks and reports to the AC on the implementation status of actions agreed by Management, so as to ensure prompt and adequate closure of audit findings.

AIRPORT DEVELOPMENT

1. The ECAD comprises four Directors, as follows:

Mr Liew Mun Leong - Chairman Mr Tan Gee Paw Mr Lim Zhi Jian Mr Lee Seow Hiang

As and when necessary, external members may be co-opted to provide expertise in relation to the development projects.

2. The ECAD oversees new development and major redevelopment projects at Changi Airport. The roles of the ECAD include:

a. reviewing and approving collaborations, selection of consultants, architects and other professional advisors, design concepts, aesthetic element proposals and other proposals related to development projects at Changi Airport; and

b. reviewing and approving tenders for goods and services exceeding S$50 million related to development projects at Changi Airport. ANNUAL REPORT 2017/18 35

ENTERPRISE RISK Management

CAG manages a wide range of risks which includes 3. Management leads the Company’s efforts in operational and safety, regulatory, financial, and developing and strengthening its risk management developmental projects risks. With increasing processes and framework through the RC, passenger numbers and the completion of T4, CAG’s supported by the ERM division. key challenges include maintaining safe, secure and efficient operations at Changi Airport. 4. Reporting to the AC and ORSC, the RC is chaired by the CEO, and comprises Senior Management There is clarity in risk ownership, roles and members of the Company. It meets regularly responsibilities at the Company’s business units. Each to review the Company’s key risks and provide key development project such as the Changi East directions to strengthen the implementation of ERM Development has a dedicated risk team, whose role in the Company. is to identify and aggregate the project’s current and Risk Awareness Culture emerging risks which impact timelines, costs, quality and safety, and to regularly report the project’s top 5. At CAG, every employee and everyone working risks and mitigation measures to the Company’s in the airport community is a valued manager of Risk Committee (RC), through the Enterprise Risk risks. Therefore, the RC, through the ERM division, Management (ERM) division. continues with its engagement efforts through inter- divisional risk workshops and meetings with risk Risk Governance owners. 1. Both the Board and Management are responsible for the management of risks in CAG. The Board, 6. The ERM division also conducts regular courses on through the ORSC, provides an oversight on the fundamentals of risk identification, assessment, operational and safety risks, while the review of the mitigation, review and reporting to divisional risk Company’s financial and strategic risks are assisted owners to institutionalise ERM and enhance the risk by the AC. awareness culture.

2. The ORSC comprises two Directors, as follows:

Mr Michael George William Barclay - Chairman Mr Richard R. Magnus

An external member (not being a Director) may be co-opted as and when necessary to provide expertise in the areas reviewed. 36 CHANGI AIRPORT GROUP

BUSINESS & OPERATIONS Review ANNUAL REPORT 2017/18 37 38 CHANGI AIRPORT GROUP

GLOBAL Connectivity

Connecting Singapore to over 400 cities in about 100 countries and territories worldwide

EUROPE Eastern/Central Western Europe Albania Austria Azerbaijan Belgium NORTH Bulgaria Denmark AMERICA Croatia Estonia Czech Republic Faroe Islands Canada Hungary Finland United States Poland France Romania Germany Russia Great Britain (UK) SOUTH Serbia Greece AMERICA Slovenia Iceland Brazil Turkey Ireland Colombia Ukraine Italy Lithuania Luxembourg Netherlands Norway Portugal Spain Sweden Switzerland

2 City Links 50 City Links 131 City Links

SOUTH NORTH EUROPE AMERICA AMERICA ANNUAL REPORT 2017/18 39

AFRICA East Africa South Africa ASIA Burundi Botswana Central Asia South Asia Ethiopia Mozambique Turkmenistan Bangladesh Kenya South Africa Uzbekistan Bhutan Mauritius Zimbabwe India Rwanda Middle East Maldives Seychelles West Africa Bahrain Nepal Tanzania Benin Qatar Sri Lanka Uganda Burkina Faso Saudi Arabia SOUTHWEST Cote d’Ivoire United Arab Emirates Southeast Asia PACIFIC North Africa Ghana Brunei Darussalam Australia Egypt Niger Northeast Asia Cambodia Cook Islands Nigeria China Indonesia Fiji Hong Kong SAR Laos New Zealand Central Africa Japan Malaysia Norfolk Island Chad Macau Myanmar Papua New Guinea Congo South Korea Philippines Samoa Republic of Congo Taiwan Thailand Solomon Islands Timor Leste Tonga Vietnam Vanuatu

28 City Links 125 City Links 72 City Links

AFRICA ASIA SOUTHWEST PACIFIC 40 CHANGI AIRPORT GROUP

AIR TRAFFIC Statistics

FY2017/18 62,972,068 FY2016/17 59,371,696 FY2015/16 56,737,315 FY2014/15 53,969,875 PASSENGER FY2013/14 MOVEMENT 53,874,049

FY2017/18 2,143,119 FY2016/17 1,998,479 FY2015/16 1,867,784 FY2014/15 1,847,423 AIRFREIGHT FY2013/14 MOVEMENT 1,837,580 (Tonnes of Airfreight)

FY2017/18 377,429 FY2016/17 362,246 FY2015/16 351,059 FY2014/15 339,191 COMMERCIAL FY2013/14 AIRCRAFT 347,458 MOVEMENT ANNUAL REPORT 2017/18 41

@CHANGIAIRPORT ON Instagram 42 CHANGI AIRPORT GROUP

REVOLUTIONISING the Automated Check-in Kiosks (ACK) and Automated Bag Drop (ABD) machines to be positioned Air for efficient passenger flow through the Fast and Seamless Travel (FAST) process.T4’s interior design is based Travel on a symmetrical petal design, inspired by the orchid petal. It appears as the central repetitive motif used in various locations within T4, such as on the kerbside drop-off, interior skylight lanterns, n 31 October 2017, Changi sqm terminal has a handling marble flooring and carpets, Airport celebrated the capacity of 16 million passenger adding to its boutique feel. The O coherent design is something commencement of its newest movements per annum - half the terminal, T4, by welcoming its first size of T3 with two thirds its handling special for T4. passengers with fanfare. After five capacity. With skylights and glass walls years since its conception in 2012 allowing natural light in, T4 and with construction completed A 300-metre-long Central Galleria simulates a natural environment in 2016, T4 opened its doors and was introduced to separate the for plants and trees to thrive. The presented a game-changing public zone from the transit area, terminal’s landscaping covers passenger experience at Changi providing a clear view from the 2,000 sqm and is home to about Airport. In the lead up to its check-in hall of the transit area. The 190 large trees. opening during the year, immense 11-metre-high ceiling and skylights admitting light into the terminal preparatory works on systems and For its creative design in terminal make T4 appear bigger. For more processes, and the training of layout and focus on providing optimal deployment of manpower people were conducted, to ensure a barrier-free environment, T4 and equipment, T4 adopted a T4’s operational readiness. received the Universal Design centralised layout for departure Mark Platinum Award, the highest DESIGN APPROACH and arrival immigration, as well accolade under the Building & Situated at the site of the previous as pre-board security screening. Construction Authority Universal Budget Terminal, boundaries were In the Departure Hall, the check- Design Mark scheme. pushed in terms of the architectural in islands are angled towards the approach and terminal layout for immigration control area to create INNOVATION AND TECHNOLOGY T4 to achieve maximum capacity natural and intuitive wayfinding for For the first time at Changi Airport, with a smaller footprint. The 225,000 passengers. In addition, this allows a fully automated departure

T4’s check-in rows are angled towards the common immigration control area, Along the contiguous Boarding Corridor that stretches 800 metres to create natural and intuitive wayfinding for passengers. The 11-metre-high along the terminal is length, 160 ficus trees form a boulevard, ceiling and skylights admitting light into the terminal make T4 appear bigger. separating the boarding area from the common area at the departure gates. ANNUAL REPORT 2017/18 43

process under CAG’s FAST initiative T4 is the first Changi terminal to offer end-to-end self-service travel options was introduced. T4 is the first via FAST, comprising automated terminal at Changi Airport to offer check-in, bag drop, immigration and boarding. end-to-end self-service options by automating processes at check-in, bag drop, immigration and boarding, integrating facial recognition technology. It allows more optimal use of manpower resources to continue to deliver a better Changi Experience, against a backdrop of a tightening labour market in Singapore. A total of 65 ACKs, 50 ABD machines, 18 Automated Immigration Gates and 46 Automated Boarding Gates were installed.

To enhance efficiency and processes at the screening checkpoints, T4 is also the first terminal in Changi Airport to introduce computed tomography the spirit of dynamism, originality (CT) at all the security lanes to and connection with aviation to screen hand carry luggage at the inspire and entertain passengers sculptor Kurt Metzler and ‘Les passenger security checkpoint. and visitors. A grand-scale kinetic Oiseaux (The Birds)’ by French artist With advanced 3D screening sculpture, Petalclouds, spans 200 Cedric Le Borgne are installed in technology, there is no need for metres of the Central Galleria. It the departure and arrival halls. passengers to present electronic combines art and technology A six-metre-high steel sculpture is devices such as laptops and to create a harmonic, collective the centrepiece of T4’s themed tablets. choreography of six identical ‘petal garden, Steel in Bloom. Covered in clouds’. Another three art works, An Automatic Tray Return system intricate botanical motifs, it draws namely ‘Hey Ah Chek!’ by local with parallel divestment stations has inspiration from the silhouettes of sculptor and cultural medallion also been installed, with two clear plants, creating a playful contrast advantages. The system no longer winner, Chong Fah Cheong, ‘The between man-made material and requires security staff to manually Travelling Family’ by Swiss-Italian nature. return trays, freeing them up to pay closer attention to passengers. It also allows two passengers to present their belongings for screening simultaneously, speeding up the entire process.

A 70-metre-long Immersive Wall above the centralised security screening area provides a stress- free environment for passengers as they undergo checks.

THEATRE OF EXPERIENCES T4 presents a rich mix of art, culture and technology, with theatre performances, heritage-themed façades, immersive LED displays and entertainment features.

A unique feature in T4 is the curated art programme that embodies Petalclouds at T4 evokes the impression of clouds dancing gracefully in the sky. 44 CHANGI AIRPORT GROUP

‘Peranakan Love Story’ is a collaboration with renowned Singaporean The 70-metre by 5-metre Immersive Wall showcases compelling imageries of composer and artiste Dick Lee. Singapore’s skyline, ASEAN landmarks, as well as a whimsical animated clip on suitcases being screened before flight.

For the first time at Changi get to discover and learn about About 25% of them are new to Airport, Singapore’s local culture the rich Peranakan culture. Changi Airport. These include local and flavour are showcased footwear label PAZZION; dining PLETHORA OF DELIGHTS TO THRILL permanently to international outlets like Treasures (Yi Dian Xin) PASSENGERS passengers. The Heritage Zone in by Imperial and Tiger Den, as well Shopping and dining have always the transit area features a row of as Australian pharmacy - Airport been an integral part of the airport nine shophouses spanning the Pharmacy. In addition, British experience, and T4 presented 1880s to the 1950s. Retail and food retailer WHSmith opened its first an opportunity to introduce new and beverage outlets housing Singapore store in T4. concepts to Changi Airport’s local brands like Bee Cheng Hiang, extensive retail and food and Bengawan Solo, Curry Times, Eu Making a debut in T4 and beverage options. The shops Yan Sang, and Heavenly Wang are Changi Airport is the concept of and restaurants at T4 comprise integrated into the shophouses. a seamless duty-free shopping well-loved local and international CAG worked very closely with experience with integrated the tenants on the shop décor brands with 16,000 sqm dedicated Cosmetics & Perfumes as well to exude nostalgia through to a wide array of retail and dining as Wines & Spirits concessions furnishings and interior design. options. Of the 81 outlets, 62 are operated by The Shilla Duty Free retail and service outlets and 19 and DFS respectively. Having two A surprise element is injected are food and beverage ones. different operators work together through a special performance display on the shophouse façade. An LED screen transforms two Peranakan shophouse bays into a digital stage, to present a six- minute cultural mini-theatre show - ‘Peranakan Love Story’.

A Peranakan Gallery on the mezzanine floor features historical exhibits and artefacts of the Peranakan culture such as embroidered Sarong Kebaya, antique wooden wedding bed, and porcelain ‘nyonya ware’. The gallery, a first-ever collaboration between CAG and National

Heritage Board, enhances the With the concept of an integrated duty-free zone, passengers are able to conveniently check-out heritage experience as passengers their purchases in a single transaction, hence enjoying a seamless shopping experience. ANNUAL REPORT 2017/18 45

Singapore brand TWG Tea introduced tea sampling for the first time in Changi Airport. Tea aficionados may find it hard to resist TWG’s treasure trove of exotic teas and accessories.

to integrate their services is unique Michael Kors, The Cocoa Trees for healthier food options, CAG in an airport. Passengers can and TWG Tea Boutique. CAG encouraged more food and shop and combine their duty-free worked very closely with tenants of beverage operators to expand purchases in a single check-out these anchor clusters to create a their range of healthier choices. transaction, bringing them much premium shopping experience. Apart from that, CAG worked with convenience and time savings. the operators to introduce more More than 450 staff from both In the public area, airport visitors self-help ordering and payment companies underwent a robust can dine at 11 food and beverage options to reduce queue time, joint training programme to ensure outlets, including new at Changi improve productivity and enhance they have comprehensive product restaurants such as local food efficiency. knowledge in both categories. chain Andes at Astons, London Fat Duck, Old Street Bak Kut Teh STAFF-FRIENDLY TERMINAL The T4 shopping experience is and Sushi Goshin by Akashi. Food Besides designing for passengers, T4 enhanced by stores with 11-metre- Emporium by NTUC Foodfare, also is also designed to be a staff-friendly high façades and visually a new tenant at Changi, operates terminal for the 3,000 staff working impactful storefront designs. This a food court with colonial-inspired there. Staff-centric amenities have zone offers a selection of popular design features, carrying a wide been incorporated for a more retail brands - Charles & Keith, range of local favourites. With conducive working environment. Coach, Furla, Gassan Watches, increasing consumer preference These include ergonomically- designed work stations, dumbwaiters (a small freight lift to transport items such as wheelchairs and strollers at the apron area) at aircraft stands, and four staff lounges for them to rest, enjoy their meal breaks and interact with other colleagues. The baggage handling area is more brightly illuminated and better ventilated with fans and spot cooling grills. Non-slip flooring and colour-coded zones improve the work and safety conditions of operations for baggage handling staff.

PREPARING T4

The T4 Housekeeping team maintains the cleanliness of the new terminal with a team of Prior to the commencement autonomous cleaning machines. of operations, the year saw 46 CHANGI AIRPORT GROUP

Members of the public participated in the trials as passengers, to test out various airport systems and processes. These include the suite of FAST options, security screening, GST refund, baggage claim, ground transport, way-finding and passenger and baggage transfer. In addition, about 50 volunteers with disabilities were invited to test way-finding as well as departure and arrival processes. Roadway trials were also conducted with taxi drivers to familiarise them with getting around T4.

‘Live‘ trials involving selected T4 airlines were carried out in the final stage of tests before T4 The final trial stage was the ‘live’ commenced operations. trials involving selected T4 airlines such as Air Asia, Cathay Pacific, Cebu Pacific, Korean Air and the installation and testing of testing had to be conducted. Trials Spring Airlines. Here, software key airport, engineering and IT involved the airport community integration was tested, and realism systems and processes, including comprising government agencies, was injected by handling real FAST. Training and familiarisation airlines, and ground handling passengers and operating real- programmes were organised for companies. time flights for both departure and airport staff and partners. The arrival. In all, 11 ‘live’ flight trials were terminal’s interior fittings, installation Months of rigorous Operational conducted. of facilities, art and horticulture Readiness and Airport Transfer T4 MEDIA PREVIEW, VIP TOURS AND works, as well as renovation of (ORAT) trials and ‘live’ flight trials OPEN HOUSE shops and restaurants were also were carried out, starting as early Members of the media were given carried out. as October 2016. The trials involved a first peak into T4 from 24 to OPERATIONAL READINESS TRIAL over 2,500 airport staff and 7,500 31 July 2017. More than 100 local With many new systems and volunteer participants. Over a and international reporters from processes at T4, including state- million bags were put through Indonesia, Philippines and Vietnam of-the-art technologies and the T4 baggage handling system were taken on a terminal tour and equipment deployed for the first during a three-month stress test got a first hand look at what it had time in Changi Airport, thorough period and the ORAT trials. to offer. The special preview was

Over 100,000 visitors thronged T4 during the two-week Open House in August 2017. ANNUAL REPORT 2017/18 47

were also treated to yummy local delights, games and activities at the G19 boarding gate area. By the end of the day, T4 had handled 19 arrival and departure flights by Cathay Pacific and Korean Air, carrying about 4,200 passengers.

Nine airlines began operations at T4 in phases – Cathay Pacific and Korean Air (31 October), Cebu Pacific and Spring Airlines (2 November) and Air Asia Group (of four airlines) and Vietnam Airlines (7 November). VietJet Air shifted its operations to T4 on 6 A fire evacuation drill was carried out as part of T4’s full dress rehearsal. March 2018. Today, T4 is served by 11 airlines flying to 21 regional destinations. Together, they are estimated to serve more than 8.3 well received and saw T4 garnering rehearsal included final systems million passengers at T4 per annum. many headlines worldwide. checks and tests by airlines, commercial tenants, ground To mark its operational launch, More than 60 groups of VIPs were handling companies and other a host of opening specials from hosted to an informative guided airport partners. retail to food deals were available tour hosted by T4 Ambassadors, to promote shopping and dining. during the period from 31 Jul COMMENCEMENT OF OPERATIONS Embracing the rich heritage to 4 Aug 2017. The VIP groups T4 welcomed its first passengers on display at T4, a shopping promotion included airport partners such as 31 October 2017. Cathay Pacific themed Those Were The Days was management teams from airlines flight CX659 from Hong Kong also launched between 5 March and ground handling companies, was the first flight to arrive at the business partners of commercial new terminal at 0525 hours. Its and 1 May 2018, reviving childhood tenants, government agencies, passengers were warmly welcomed memory fun times with old school grassroot leaders and community with orchids and goodie bags as games and activities, and offering groups. they stepped into the terminal. passengers limited edition gifts-with- Passengers departing on the first purchase. All 29,000 premiums were A T4 Open House was held from 7 to departure flight CX650 at 0650 fully redeemed one month before 20 August 2017 for members of the hours bound for Hong Kong, the promotion ended. public. During the two-week Open House, over 100,000 visitors came through the doors. More than 350 CAG staff volunteers and airport partners became T4 Ambassadors to showcase the terminals’ unique features. Social media influencers were also actively engaged to publicise #ChangiT4. This effort saw over 8,000 pieces of user-generated content by Open House visitors shared on social media.

AIRPORT COMMUNITY READY FOR OPENING A week before T4 commenced operations, CAG conducted a full-dress rehearsal for operations at T4 involving about 1,500 airport Passengers preparing to board the first departing flight, Cathay Pacific Airways flight CX650, at the staff, tenants and participants. The Automated Boarding Gate. 48 CHANGI AIRPORT GROUP

GROWING THE its existing connectivity to India with additional services to cities such as Coimbatore and Delhi. It Air Hub also welcomed a new city link to Madurai – one of the oldest cities in Tamil Nadu with a rich heritage of Choice culture. With these developments, Singapore is now connected to 15 Indian cities with more than 260 weekly services, operated by eight airlines. n FY2017/18, the aviation During the year, three new airlines I industry saw another year of – Hebei Airlines, JC (Cambodia) China continued to be a key healthy growth for both passenger International and Norwegian, market for Changi Airport, with and cargo traffic. Changi Airport joined Changi’s family of over passenger traffic crossing the captured a fair share of this 100 airlines. six-million mark for the first time, traffic, with passenger movements clocking 6.4 million passenger STRENGTHENING PASSENGER growing 6.1% to reach 63 million MOVEMENTS IN REGIONAL MARKETS movements between the two for the year – the first time it has Changi’s top five markets retained countries for the year. With Hebei crossed the 60-million passenger their respective positions compared Airlines coming onboard as one mark. Aircraft movements increased to the previous year, with Indonesia of Changi’s new airlines, there are 4.2% to reach 377,429 flights. ranking as the busiest, followed now 13 carriers operating between Traffic to all regions saw growth, by Malaysia, China, Thailand and Singapore and China. with strong double-digit growth Australia. In terms of destination Changi is connected to 35 Chinese in Africa (+25%), North America by passenger movements, Kuala cities, offering more than 350 weekly (+21%), South Asia (+14%) and Lumpur, Jakarta and Bangkok took services. Europe (+10%), following exciting the top three spots, followed by developments for the year. Hong Kong and Manila. INCREASING CONNECTIVITY WITH NEW LONG-HAUL ROUTES Changi Airport continued to India is Changi’s sixth biggest The year in review saw growth expand its network and added 11 market and the fastest growing in long-haul routes from Changi new city links for the year, to China among Changi’s top 10 markets, Airport. In the long-haul low- (Harbin, Shijiazhuang, Yantai), recording a robust 16% year- cost segment, Changi Airport Greece (Athens), India (Madurai), on-year growth that is driven by established new connections to Indonesia (Padang*), Japan strong visitor arrivals from both Europe, including the launch of (Hiroshima, Okinawa), Malaysia primary and secondary Indian Scoot’s services to Athens. On the (Bintulu*), Sweden (Stockholm) cities. Working closely with its airline full service segment, Lufthansa also and the United States (Honolulu). partners, Changi Airport deepened reinstated its Munich-Singapore service, strengthening Singapore’s connectivity to Germany.

At the end of March 2018, Qantas Airways resumed its Sydney- Singapore-London A380 services after a hiatus of five years. Qantas also increased capacity for its Singapore-Melbourne and Singapore-Perth routes. This has enabled Changi’s Singapore- Australia and Singapore-London routes to grow in capacity by 5.5%, and 21.3% respectively.

With Africa regarded as the next frontier in emerging markets,

Changi Airport organised an event to celebrate the crossing of the 60-million passengers milestone * Services to these cities have since ceased. in December 2017. ANNUAL REPORT 2017/18 49

Changi Airport is pleased to BUILDING AND EXPANDING S$30 million to the partnership, welcome the return of Ethiopian PASSENGER SEGMENTS has since rolled out marketing Airlines during the year. As the In addition to route development campaigns in 19 markets in airline has one of the most efforts, CAG also collaborated with various regions around the travel industry partners to pursue extensive networks within the world. The renewed partnership sustainable traffic growth across African continent, its launch of five will also see the broadening of various passenger segments – the Singapore MICE Advantage weekly services from Changi to including transfer and transit, MICE Programme (SMAP) and refreshing Addis Ababa strengthens Changi’s (Meetings, Incentives, Conventions offers to attract business visitors to connectivity with the African and Exhibitions) and fly-cruise. Singapore. It will secure more MICE continent. events to be held here. Together with Singapore Airlines Over in the United States, Scoot (SIA) and the Singapore Tourism These marketing efforts will launched services to Honolulu Board (STB), a three-year complement existing initiatives such (via Osaka), and United Airlines partnership was renewed to as the Free Singapore Tour, a long- launched the world’s longest non- strengthen Singapore’s destination standing, complimentary service stop route served by the B787-9, appeal in driving visitor traffic jointly offered by CAG, SIA and offering a new service between to and through Singapore. The STB. The initiative provides transfer Singapore and Los Angeles. tripartite which commits more than passengers on longer layovers with a taste of Singapore and attracted more than 70,000 passengers during the year.

In conjunction with the return of Qantas Airways’ London services via Singapore, and their capacity injection on other routes from Changi, a three-year partnership involving a S$5 million commitment between CAG, STB and Qantas Airways was also launched to promote Singapore both as a destination and as a connecting gateway to Asia, Europe and Australia. This collaboration will see a series of joint marketing campaigns launched in Australia, Southeast Asia and the United [Left to right]: Mr Benjamin Chan (SIA), Ms Melissa Ow (STB) and Mr Peh Ke-Wei (CAG) at the SMAP launch at IMEX Frankfurt 2017. Kingdom to promote travel on

The resumption of Qantas Airways’ services strengthens Changi Airport’s position as the region’s leading air hub. 50 CHANGI AIRPORT GROUP

Qantas Airways’ services via Singapore.

To cultivate fly-cruise traffic, CAG entered into a three-year collaboration with Genting Cruise Lines’ Dream Cruises and STB. The partnership is aimed at promoting Singapore as an Asian cruise hub, as well as positioning Singapore as a strategic gateway to neighbouring countries through fly-cruise itineraries. This marketing initiative is estimated to bring in 600,000 visitors, and more than S$250 million in tourism receipts. Launch of Pharma@Changi initiative to enhance handling capabilities for pharmaceuticals air cargo. PROMOTING CHANGI AIRPORT AND SINGAPORE IN KEY MARKETS At the same time, CAG continued to drive its business objectives LEVERAGING CHANGI’S AIR CARGO In October 2017, CAG formalised of inspiring travel, increasing CAPABILITIES the Pharma@Changi initiative passenger expenditure and Amid a challenging global air with nine other CEIV-certified building the Changi brand freight market, the year saw stellar partners in Singapore. As part of in Australia, China, India and performance on the air cargo the two-year Memorandum of Indonesia, through partnerships front. For the first time, airfreight Understanding, the companies will and integrated marketing throughput at Changi Airport jointly pursue the best standards campaigns. crossed the two-million tonne in pharmaceuticals handling, and mark, growing 7.2% year-on-year promote Changi Airport as a trusted Positioning Changi Airport as the to reach 2.1 million tonnes of and reliable pharmaceutical air gateway to the region and beyond, cargo. Improvement in cargo cargo hub in the region. Over the passengers were introduced to flows was recorded across the last three years, pharmaceutical the many facilities, retail, food and board, for exports (+12%), imports cargo ranked among the top beverage options that would help (+7%) and transshipments (+5%). five cargo types transported via make their transit in Changi Airport Freighter connectivity to new airfreight globally, in terms of total a pleasant and delightful one. destinations were established with value. For FY2017/18, Changi Airport handled 24,900 tonnes of Beyond tactical campaigns to links to France (Paris), Indonesia pharmaceutical cargo. drive sales of air tickets and travel (Semarang), and the United Arab packages, a key thrust for the year Emirates (Dubai). In recognition for its efforts, Changi was to develop brand platforms Airport was awarded the ‘Asia Changi Airport became the first that resonated with Changi’s target Pacific Airport of the Year 2017 airport community in Asia Pacific to audience in these markets. Key (Customers’ Choice)’ by Payload attain the IATA Centre of Excellence brand messages, emphasising Asia, the ‘Cargo Airport of the Year’ for Independent Validators the airport’s unique elements to (over one million tonnes) by Air Certification for Pharmaceutical evoke emotions, helped increase Cargo News, the ‘Best Airport 2017’ Handling (CEIV Pharma) across the overall brand equity and advocacy award at the Asian Freight, Logistics supply chain comprising airlines, among passengers. & Supply Chain Awards, as well as ground handlers and freight the ‘Diamond Award’ (over one Efforts to increase retail spend at forwarders. CAG worked closely million tonnes) at the Air Cargo the airport have been successful with the companies on audit Excellence Awards. through various partnerships. reports and facilitated discussions Targeted retail campaigns for between these companies and China and Indonesia passengers, IATA. With these efforts, Singapore featuring discounts off minimum is now an air cargo hub with the purchase proved to be effective in most number of IATA CEIV Pharma driving up transaction values and certified logistics companies in the overall spend. Asia Pacific region. ANNUAL REPORT 2017/18 51

TOUCHING in themed experiences and activities at the largest destination- themed Nordic exhibition, inspiring Millions travel to the Nordic countries of Denmark, Iceland, Finland, Norway of Hearts and Sweden. The kawaii experience continued during the annual year-end festive celebrations as the adorable Sanrio family returned to spread the he relentless passion of was also named the Best Airport festive spirit in November 2017. The T Changi’s 50,000-strong in the World by leading UK travel T3 Departure Hall was transformed airport community to create the publication Business Traveller. These into an idyllic Mystical Garden, best possible airport experiences were just two of the 27 Best Airport where visitors could pose for photos for millions of passengers awards that Changi Airport received with the crowd-favourite Sanrio extends beyond efficient airport in FY2017/18, bringing its total haul characters. A specially built gazebo operations and ensuring a of such awards to date (31 March provided a unique vantage point safe and secure environment. 2018) to more than 560. of the garden, while daily light and World-class facilities, excellent snow shows delighted the young SAYING HELLO TO KITTY AND FRIENDS customer service with warm and old alike. Changi Airport took centre stage hospitality, and the anticipation for all Sanrio fans from Singapore of passengers’ travel needs are One special highlight of the revelry and beyond as it transformed always key considerations to was the largest indoor autonomous into a Nordic wonderland for deliver a personalised, stress-free drone show in Singapore, which and positively surprising Changi the June 2017 school holidays. married art and technology to Experience. Seven loveable Sanrio characters enhance the festive experience. – Cinnamoroll, Gudetama, Hello Every night for the duration of It was thus heartening to Kitty, the Little Twin Stars, My Melody, the event, 40 drones lit up the gain recognition yet again by and Pompompurin - greeted dimmed Mystical Garden like passengers from around the world airport visitors in a first-in-Singapore fireflies, in a synchronised routine, at the Skytrax awards in March appearance. Snow was also seen forming shapes like a snowflake 2018, when Changi was named in Changi Airport in a specially and Christmas tree, creating an the World’s Best Airport. This was the designed snow house where intimately magical experience sixth year in a row and the ninth children and the young-at-heart for the crowds below. By the end year overall that Changi has won immersed and frolicked in wintry fun. of the holiday season, more than this accolade from Skytrax. For Visitors also caught a rare sighting a hundred of these enthralling the 30th consecutive year, Changi of the Northern Lights and engaged drone shows were performed to a

Hundreds turned up for the launch of Changi’s Mystical Garden with Sanrio characters in the T3 Departure Hall in November 2017. 52 CHANGI AIRPORT GROUP

The 504 clocks that make up ‘A Million Times at Changi’ are able to synchronise their movements to form messages and symbols.

cumulative audience of more tour for passengers to discover made in the airport, thus creating than 57,000. hidden gems within the transit areas a more relaxing environment of the airport. The guided tours for passengers. It also enabled Basement 2 of T3 was also home are hosted by Changi Experience passengers to focus their attention to a new Sanrio-themed children’s Agents (CEAs). Apart from sharing on more critical announcements. playground. Over at T2, a four- interesting facts about the airport’s metre-tall Hello Kitty topiary in the facilities and offerings, the CEAs Passengers and visitors at Changi Departure Hall was the perfect can also curate tour routes based Airport were also treated to a variety backdrop for selfie moments. At on passengers’ interests for a more of huge horticultural displays over the end of the festivities, more than personalised touch. the year. Located in both the public 150,000 limited-edition Sanrio plush and transit areas, these vibrant toys were redeemed by fans and Throughout the year, the CEAs also displays use thousands of live plants shoppers. continued to delight passengers and fresh flowers to commemorate CREATING A MILLION MEMORIES through their ‘WOW’ initiatives occasions and festivals like Chinese To create even more enchanting during festive and special New Year, National Day, Christmas, th memories for passengers and occasions like Valentine’s Day Deepavali and the 50 anniversary visitors, Changi Airport unveiled a and ONE Changi Kindness Day. of National Service, and serve as unique work of art – A Million Times During these engagements, CEAs photo spots for memories to be at Changi – in November 2017 at roved the terminals to surprise captured. T2. It is one of the biggest kinetic passengers with occasion-specific Further enhancing the passenger artworks in the world, and the first treats, gifts, fun activities and experience at T3 was the revamp of installation in Changi that combines photo opportunities. Throughout its signature ‘Green Wall’, which was kinetic movement, music and FY2017/18, these ‘WOW’ initiatives completed in January 2018. The shadow play. The ‘clock face’, which elevated the Changi Experience for new ‘Green Wall’ features 113,000 is made up of 504 smaller clocks more than 65,000 passengers. individual plants of more than fitted with individual motors, not only In January 2018, CAG also rolled 50 species, almost four times the serve to tell the time, but forms a out the Quiet Terminal initiative at number of the old wall. Despite this visual representation of the abstract all four terminals, limiting public increase in the amount of greenery, concept of time. With this new art announcements to essential the time needed to maintain this installation, Changi Airport now has ones, such as those regarding five-storey-high vertical garden has three kinetic sculptures, including been cut by more than half, thanks Kinetic Rain in T1 and Petalclouds emergencies, lost and found in T4. cases involving children and to the wall’s new and improved passports, flight delays, and gate system of plant arrangement, and In April 2017, Changi Airport and belt changes. This halved automation of the watering and introduced the ‘Discover Changi’ the number of announcements fertilisation processes. ANNUAL REPORT 2017/18 53

systems. In December 2017, when Changi Airport. To help build the T1 taxi stand was relocated to this sense of common purpose, Basement 1 of Jewel Changi Airport CAG has held the Annual Airport (Jewel), CAG took the opportunity Celebration (AAC) since 1994, to to implement a new intelligent honour outstanding individuals in taxi dispatch system. This system the airport community who have automatically routes taxis to bays, exemplified service excellence by thus enhancing the productivity of going beyond their call of duty. taxi coordinators. To mark the AAC’s silver jubilee in CAG also rolled out a new Video- February 2018, CAG introduced based Parking Guidance System three new awards at the ceremony (VPGS) in Changi Airport’s car – the Changi Hero Award to parks, enabling the airport’s car recognise staff who had stepped park operator to monitor the forward in a life threatening More than 50 species of specially selected plants on the new ‘Green Wall’ provide status of the car parks in real- situation to take charge and aid different layers and textures to the wall. time. Operationally, the VPGS has passengers; the Changi Service Star transformed car park management which recognises the remarkable at Changi Airport, creating greater achievement of staff who have won productivity and efficiency. Instead ENHANCING EFFICIENCY, BOOSTING top service awards multiple times; of conducting laborious patrols PRODUCTIVITY around the car parks, officers now and the Special Commendation CAG continually strives to make receive alerts on errant practices by Award to commend an airport processes and systems as efficient drivers, such as illegal parking and partner who had consistently been as possible. To this end, dedicated abuse of pick-up spaces via the a supportive employer to airport FAST (Fast and Seamless Travel) system, enabling a targeted and staff over the years. zones were introduced at the T1 expeditious response. VPGS also Departure Hall in 2017, successfully helps create a stress-free parking To further build this sense of paving the way for an efficient, experience for visitors, as it enables common purpose, CAG launched self-service check-in experience. CEA to help them locate their the ONE Changi mobile application Passengers flying on Jetstar and vehicles via a simple app-based at the AAC. Through the application, Qantas Airways were the first to licence plate search if required. members of the airport community enjoy the new Automated Check-in are now able to connect and Kiosks and Automated Bag Drop BUILDING A ONE CHANGI discuss learnings from their courses systems, similar to those introduced COMMUNITY and training with one another in the newly opened T4. CAG firmly believes that providing the best service possible to easily, read up on the latest airport This focus on efficiency also passengers requires the dedicated news and happenings, and pick up extends to the airport’s transport effort of all organisations within service tips while on-the-go.

In recognition of Changi’s service heroes, 30 awards were given out at the Annual Airport Celebration 2018 which was graced by Coordinating Minister for Infrastructure and Minister for Transport, Mr Khaw Boon Wan. 54 CHANGI AIRPORT GROUP

REDEFINING became the first car prize winner and walked away with an all-new Volvo S90 luxury sedan.

Travel OFFLINE RETAIL OF TOMORROW Beyond an exciting retail mix, Retail delightful retail spaces, novel activations and personalised services, Changi Airport creates a dynamic, multi-faceted retail environment that keeps up to hangi Airport scaled of the world’s best airports to shop speed with evolving consumer C new heights with record- and dine at. trends and spending habits. breaking concession sales of One of the ways Changi Airport over S$2.5 billion in FY2017/18, Besides driving footfall and maintains a refreshing retail mix registering a 10% growth year-on- spending, airport-wide events is by introducing variety and new year. The phenomenal success continue to make Changi Airport brands across the airport’s retail was propelled by strong passenger an exciting, rewarding and vibrant and food and beverage offerings. growth, the new T4, a diverse retail shopping and dining destination. At the Departure Transit Hall, 14 mix and pioneering shopping The ‘Be a Changi Millionaire’ new brands such as Irvins, Superga, concepts relevant to passengers’ flagship shopping promotion has Tanuki Raw and Ted Baker, were needs and aspirations. attracted more than 1.5 million introduced in FY2017/18. At the With over 90,000 sqm of retail space, participating entries from 221 public areas, 30 new brands made 400 retail and services outlets and nationalities in FY2017/18. To date, it their appearance at Changi 140 dining outlets, Changi Airport has crowned eight millionaires and Airport, including American prides itself in designing exceptional rewarded millions of passengers Tourister, Dragon Brand Bird’s Nest shopping and dining experiences who shop and dine at Changi and Hokkaido Baked Cheese Tart. Airport. The 2017 edition took this for passengers and visitors at every A note-worthy retail highlight perennial favourite to the next level touchpoint of their journey through in FY2017/18 was the highly- with the addition of a new car the airport. anticipated opening of the Louis prize. For the first time in the history Vuitton duplex store and the As the airport welcomes more of ‘Be a Changi Millionaire’, finalists revamped T3 Central Piazza. The passengers, Changi’s strategic retail paired up and raced through four world’s first Louis Vuitton airport partnerships and never-ending rounds of games at the Grand duplex features a bespoke product pursuit of innovation will continue Draw, before Indonesian Oddie mix for the cosmopolitan traveller, to shape its retail strategy and fuel Rehatta emerged as the ultimate and joins the ranks of the Wines & many new ideas and developments recipient of the Millionaire Grand Spirits and Cosmetics & Perfumes to reinforce Changi Airport as one Prize. Chinese Zhang Xuchao duplexes to offer passengers a refined and personalised retail experience. A linkway at the mezzanine level connects all three duplex stores and allows passengers to browse seamlessly across the three retail spaces. A stunning centre-piece at the refurbished Central Piazza is Changi Airport’s seventh feature garden, the Crystal Garden. Specially conceptualised for the area, the Crystal Garden is a blend of soothing nature and delicate glass sculptures. The Central Piazza was also built with a new lounge area with plush seating, soft lightings and dedicated work spaces, all designed to uplift the T3 Moments right after the winners were crowned at the ‘Be a Changi Millionaire’ grand draw. experience for all passengers. ANNUAL REPORT 2017/18 55

An enchanting experience amid a garden of lights awaits passengers at the Crystal Garden.

On top of enriching its retail Girls, Louis Vuitton fragrance travel base of Changi Rewards grew to offerings, Changi Airport set, and SKII Magnetic Booster. over half a million. collaborates closely with its retailers TANTALISING TREATS FOR ALL and brands to excite passengers Another initiative that was To step up its food and beverage with exclusive product launches launched to elevate the offline offerings and attract more diners and engaging retail activations. shopping experience was the to Changi Airport, two new-to- This way, passengers can always LoveSG campaign. It celebrated look forward to new experiential Singapore along with its history, Singapore food and beverage elements and activities when they culture and pride, and told the concepts were launched in fly through the airport. Some in-store Singapore story to both locals and FY2017/18, including the airport’s activations included saxophone foreign passengers. For National largest restaurant SORA, housing six performances at The Fashion Place Day, a total of 38 tenants including Japanese brands in a single space. at T4, an atelier craftsman event home-grown brands Bee Cheng The airport was even awarded the at Braun Buffel in celebration of Hiang and TWG Tea offered Changi global winner for best New Food & its 130th anniversary, and product exclusive products, sure-win lucky Beverage Concept of the Year for its personalisation services at Pandora dips and souvenirs. Passengers Hello Kitty Orchid Garden at the FAB for Christmas. were delighted with the opportunity (Food and Beverage) Awards 2017. to encapsulate their wonderful Besides satisfying the taste buds In FY2017/18, a record number memories of Singapore and Changi of the 63 million passengers of 11 brands chose to launch with special souvenirs to bring that fly through the airport their new products or interactive home to share with their loved ones. outpost concepts as a first at annually, Changi Airport also Changi Airport. In August 2017, To reward loyal shoppers and diners constantly reviews its existing Changi welcomed the Miss Dior of Changi Airport, Changi Rewards food and beverage offerings to pop-up with a pink Jaguar car members were treated to a series accommodate new demands. that was seen in the fragrance of exclusive events such as insider To better cater to the needs of a commercial with Hollywood actress tours to the SATS Inflight Catering growing group of health-conscious Natalie Portman. In March 2018, Kitchen and Shilla Beauty Loft. Key passengers, Changi Airport has Changi unveiled the first food member promotions such as the expanded its range of healthier and beverage outpost featuring ‘7%+7% GST Savings’ sale and the food choices. Selected cafés like Hudsons Coffee and The Kitchen by ‘Members’ Weekend 10X Points’ The Coffee Bean & Tea Leaf display Wolfgang Puck. There were also five promotion saw the participation calorie count on their menus, first-in-the-world product launches of more than 10,000 members while some restaurants like The that made their debut at Changi and an average increase of 30% Kitchen by Wolfgang Puck and Airport, including Chanel Gabrielle, in sales year-on-year. At the end of Crystal Jade even provide low salt Hennessy XXO, Jo Malone Blossom the financial year, the membership or gluten-free options. The number 56 CHANGI AIRPORT GROUP

the brand-new Volvo S90 luxury sedan injected new hype and excitement to the 2017 edition of ‘Be a Changi Millionaire’ shopping promotion. At the year-end festive promotion, Changi linked up with JCB as the official payment partner and tapped on their marketing platforms to reach a wider audience. Changi also partnered Mastercard and Chope in a year-long collaboration. With Mastercard, Changi could ride on their extensive global network of banks and merchant partners for cross-promotions while airport

ANA’s very first Japan Gourmet Hall opens outside of Japan at T2. visitors enjoyed more privileges at retail and dining outlets as well as anchor landside campaigns. The partnership with Chope, of halal-certified dining operators and beverage tenants have been on the other hand, introduced has also increased in FY2017/18. encouraged to come onboard mobile reservations in Changi As Changi Airport welcomes more since its operations in September Airport through the website and passengers, CAG worked together 2017 and the facilities will be iChangi mobile app, increasing with its food and beverage partners ramped up to accommodate more convenience and rewarding diners to leverage technology for higher operators when Jewel opens in the with additional Chope dollars and efficiency and enhanced customer first half of 2019. Changi Rewards points in tactical experience. About 43 outlets promotions. across the airport have either FORGING STRATEGIC PARTNERSHIPS implemented electronic menus or To grow its commercial revenue, Changi Airport inked its first sports self-service ordering and payment boost Changi’s existing marketing partnership with International kiosks. A centralised dishwashing efforts and bring more value-add Championship Cup and Lagardere facility has also been built at T3. It to passengers and airport visitors, Sports Asia, gaining access to their currently houses four dishwashing CAG has embarked on a number marketing platforms and provided machines which can handle of new partnerships. marketing support for four key about 12,000 dishes per hour, and international tournaments such as serves all landside food courts as Working with Wearnes Automotive, WTA Women’s Tennis. Changi Airport well as a café operator. More food a new car prize in the form of also partnered the National Gallery Singapore and became a major sponsor for two highly acclaimed and successful exhibitions such as – Life is the Heart of a Rainbow, by Yayoi Kusama.

These partnerships also included in-country marketing programmes to key markets such as China and Indonesia. With partner payment solution partners like Alipay, Unionpay and WeChat pay, as well as airline partners like Xiamen Airlines, Changi strengthened its outreach to the Chinese travellers and captured a larger share of the wallet. For Indonesia, Changi partnered with Bank Central Asia and Garuda Indonesia iShopChangi now offers more than 14,000 items from over 600 brands. on exclusive promotions with a ANNUAL REPORT 2017/18 57

Lebaran Shopping campaign passengers have access to a wider its passengers by rejuvenating its which helped to grow sales. product catalogue. existing lounge offerings at Changi Airport, CAG supported the revamp RISING E-COMMERCE This has contributed to the healthy of the Emirates lounge at T1 and As one of the innovators in growth of the e-commerce portal, the expansion of the SATS Premium the industry, Changi Airport is which achieved a 60% increase in Lounge at T2. The newly renovated among the first few to have its online sales in FY2017/18. Emirates Lounge is now able to own e-commerce business. From accommodate more passengers 1,800 items across five product OPTIMISING SPACE FOR and have several new features categories in 2013, iShopChangi COMMERCIAL GROWTH including a prayer room. The SATS now offers a mind-boggling range CAG manages the leases and Premium Lounge expansion led to of items from over 600 brands. operations of over 1,600 rentable increased floor area from 550 sqm On top of widening its selection premises within Changi Airport, and ensuring an attractive mix, both in the passenger terminal to 680 sqm, as well as an increase iShopChangi stays ahead of the buildings and the Changi Airfreight in seating capacity from 127 to 162. game by offering value-added Centre (CAC), as well as more The Cargo Agent Buildings (CAB) services to its customers. than 60 long-term land leases. This includes the new T4 where CAG at Changi has also undergone Complimentary delivery service allocated and leased new rentable improvements as part of CAG’s has been made available premises such as office spaces, asset enhancement initiatives at to Singapore residents since lounges and other facilities. One of CAC. The lift lobbies at CAB D, CAB November 2017, with key tenants the highlights was the opening of E and Megaplex 1 were given a Shilla Duty Free and Sprint-Cass the Cathay Pacific Lounge on T4’s sophisticated new look. A vending coming on board. Customers first day of operations. Spanning cluster was created at CAB D with have also been enjoying seamless 845 sqm, this was the airline’s first vending machines selling ready-to- checkouts with seven different dedicated lounge in Singapore eat meals, snacks, ice-cream, drinks payment options available on the and one of its biggest lounges and necessities such as over-the- e-commerce site, four of which outside of Hong Kong, with room for counter medicines, plasters and were introduced recently. Retailers over 200 guests. The airline lounge chargers for better food options on iShopChangi now enjoy greater even houses a signature noodle and more convenience for staff business opportunities, not limited bar which serves a selection of working at CAC. The area was also by the passenger traffic within a freshly prepared noodle dishes. spruced up to include comfortable particular terminal. This means that seating areas where the cargo T4 tenants can sell to passengers As part of CAG’s effort to enhance community can take a break from travelling out of T1, T2 and T3 while the overall travel experience for work.

Passengers can savour a menu of comforting noodle dishes at Cathay Pacific Lounge in T4. 58 CHANGI AIRPORT GROUP

ENHANCING areas to reduce lightning hazard while minimising any hindrance to ground handling activities. The Operational outcome of the study was exhibited at the SUTD Capstone Project public sharing. CAG is following up with Readiness more detailed analysis towards realising a prototype for site testing.

CAG also mandated the use of three-point aircraft grounding. mid the flurry of activities carefully coordinated to minimise This new safety measure provides A across Changi Airport’s disruptions and sufficient stands enhanced lightning protection for terminals, a different kind of buzz were available for flight operations. workers. When lightning strikes an takes place behind the scenes. The Since the replacement started in aircraft parked at the aircraft stand, airport’s airside community works August 2016, 30% of the floodlights three-point aircraft grounding would tirelessly to ensure that in-flight across Changi’s apron areas have provide pathways for these high meals, luggage and cargo get been replaced. The project is surge charges to be dissipated to loaded onto the aircraft on time, expected to be completed by 2023. the ground safely. As Singapore and that these planes are cleaned, experiences an average of 168 MINIMISING RISKS OF LIGHTNING refuelled and inspected before thunderstorm days per year, this new STRIKES taking off from Changi. To keep pace safety measure works to mitigate the Against the backdrop of increasing with the growth in passenger traffic, risk of lightning related incidents. unpredictable weather that could engineers and technical adversely hamper the efficiency of MITIGATING FLOODS staff ensure that systems and aircraft ground handling operations CAG undertook the construction of facilities in and around Changi (e.g. delay in the presentation of a central median drain along Airport Airport are kept in tip-top condition baggage for arriving passengers for safe, smooth and seamless Boulevard, the main road to and or processing of transfer baggage airport operations. out of Changi Airport, to mitigate due to temporary stop work as heavy and flash floods at the airport. For its immaculate safety record, a precaution against lightning Despite the challenge of managing Changi Airport received a hazard), CAG initiated a joint disruptions to operational roadways deficiency-free rating from the research with the Singapore during the construction period, works International Federation of Air Line University of Technology and progressed smoothly with minimal Pilots’ Associations (IFALPA) for Design (SUTD) to explore potential impact to road traffic due to the the 36th consecutive year since solutions that will offer greater safety careful planning of works during commencing operations in 1981. assurance for airside workers. The off-peak hours. The drain was also collaboration aimed to develop precast off-site before its assembly OPTIMISING AIRFIELD EFFICIENCIES technical concepts that can feasibly at the work site to cut down on the Since the roll-out of the Airport be deployed at the airport apron total construction period required. Collaborative Decision Making (ACDM) in October 2016, average taxi time for departing flights during the morning peak period was further reduced by 30 seconds in its second year of implementation. This translates to an overall reduction of two minutes for every flight, as compared to pre-ACDM timings.

PROVIDING BRIGHTER WORKING ENVIRONMENT The current conventional floodlights used to illuminate the apron areas were replaced with LED floodlights to provide a brighter working environment for airside workers. As the lights were fitted onto aircraft The central median drain along Airport Boulevard was precast off-site to cut down on the total stands, replacement works were construction period, minimising impact to road traffic. ANNUAL REPORT 2017/18 59

permeated the air-condition system and spread throughout the terminal.

CAG promptly executed emergency plans and focused on fire-fighting and evacuation in the initial phase, followed by the full diversion of T2’s operations to T3, before re- opening T2 after the terminal was cleared of smoke and ready to resume operations. Despite the many challenges to be tackled, T2 was back in operations some nine hours after. Evacuation was

A screen grab of the video production ‘Watch Out, Help Out, and Move Out’ to educate the airport carried out safely in accordance community on what to do in a crisis situation within the terminal. with fire evacuation procedures, and there were no casualties from the incident. Neither was there a need As the excavation location was bombing. In line with SGSecure’s for the diversion of arrival flights to adjacent to a row of raintrees along ‘Run, Hide and Tell’, an advisory neighbouring airports. Through the Airport Boulevard, CAG’s project and message, ‘Watch Out, Help Out, incident, many lessons were drawn horticulture teams monitored the and Move Out’ was communicated and a review was carried out to trees closely during the construction to the airport community through refine the emergency preparedness period to ensure they were various platforms. CAG also took plans of Changi Airport. unaffected. the opportunity to practice crisis ADDING EQUIPMENT FOR FIRE SAFETY communications for passengers PREPARING FOR EMERGENCIES To enhance operational readiness and the airport community during CAG continued to enhance its at Changi Airport, the Airport the exercise, further raising the level emergency preparedness and Emergency Service (AES) procured of awareness and preparedness rescue capabilities through two new firefighting equipment among airport partners. full-scale aircraft emergency during the year. These included exercise drills at Changi and Seletar MANAGING CRISIS replacements to renew existing Airports – aircraft crash at sea and The year saw CAG and the airport vehicles, and a new fleet to prepare on land, respectively. More than 350 community’s resilience in managing for the fire protection of upcoming operational personnel, including a crisis at Changi Airport. A fire senior management from CAG, the broke out in T2 on 16 May 2017 and Civil Aviation Authority of Singapore was eventually traced to a source (CAAS), Ministry of Transport in the Air Handling Station (AHS) (MOT), Republic of Singapore Air room. While the fire was quickly Force (RSAF) and airport partners extinguished, the smoke had participated in both exercises.

In a time where global acts of terrorism pose serious threats, CAG took steps to strengthen its readiness and community Newly procured firefighting vehicle to resilience through its participation enhance rescue and in Exercise Northstar - a counter- firefighting operations. terrorism exercise, conducted by the Singapore Police Force (SPF) at T3 on 17 October 2017. Observed by Singapore’s Prime Minister Lee Hsien Loong and several Cabinet Ministers, this was the first time the multi-agency anti-terror exercise was held at Changi Airport. During the drill, simulations included a shooting rampage by gunmen and a suicide 60 CHANGI AIRPORT GROUP

The Annual Airport Safety Awards recognises outstanding safety acts and projects undertaken by staff in both Changi and Seletar Airports.

new facilities, such as Runway 3. could be maintained while allowing at Changi and peak periods get A total of 10 foam tenders, two passengers to keep laptops or large extended, safe driving and aircraft emergency airstairs, two command electronics in their cabin bag. pushback operations become of vehicles and a foam pod were critical importance. More than procured. These have been Based on the trial results, CAG 600 tractor drivers signed up for scheduled for delivery progressively implemented a mixed-mode this event, almost four times more till 2020. person screening model at T4, than the first run. Participants which comprised a combination of navigated a carefully designed The advanced capabilities of these walkthrough metal detectors and circuit which assessed their safety new equipment would enable body scanners. With the aid of body awareness, checking of blind spots AES to focus manpower on more scanners, staff at T4 will only need and driving skills. time-critical tasks in rescue and to pat-down areas which require firefighting operations. For example, additional checks, enabling a less To encourage active and easy the emergency airstairs have intrusive security screening process hazard reporting by the airport been enabled with smart docking for the passengers. For screening community, a specialised technology for automated stairs of hand baggage, T4 became mobile application SWEETmini, deployment. The foam pod would Changi’s first terminal to deploy was introduced for airside staff. enhance the on-site replenishment 100% CT-based screening at all the Immediate follow-up actions can be of foam during firefighting security lanes. taken by the Aerodrome Safety Unit operations and facilitate continuous for reports submitted via the app. firefighting till support from mutual INCULCATING STRONGER SAFETY Enabling such proactive hazard aid agencies arrive. CULTURE reporting by the community allows CAG recognised outstanding safety for safety hazards to be addressed AIRPORT SECURITY acts and projects undertaken by promptly. In preparation for operations staff in both Changi and Seletar in T4, a trial was conducted in Airports, and these staff were ENHANCING AIRSIDE STAFF WELFARE selected common gatehold honoured at the Airport Safety As CAG strives to continuously rooms in T1, T2 and T3 to evaluate Awards (ASA) held on 11 August enhance the Changi Experience the most appropriate mode of 2017. The annual event also for passengers, it took concurrent security screening in T4, with six showcased innovative projects and steps to ensure an attractive and body scanners introduced for ideas from CAG, dnata Singapore, vibrant airside work environment. To this purpose. Body scanners have SATS and SIA Engineering Company, increase the supply of food options the ability to detect non-metallic to enhance airport safety. in the airside, CAG engaged a prohibited items, thus enhancing roving food truck operator (Foody the level of security competency CAG also held its second annual Truck) to sell food at various to keep pace with the changing Safe Airside Driving competition in locations within the airside. Foody security environment. In addition, 2018, with an expanded scope to Truck supplemented the only food Computed Tomography (CT) using include aircraft pushback – where outlet in the airside – Delta Café, to 3D technology to screen hand carry the plane is pushed back from the provide staff with access to more luggage was also put on trial at T3, aerobridge to taxiing position. As food options, without having to which proved that detection level traffic volume continues to increase make their way to the landside. ANNUAL REPORT 2017/18 61

increase its handling capacity from 21 million passengers per annum A New Era (mppa) to 24 mppa. GLEAMS At T1’s Departure Check-in Hall, 70% of upgrading works have been completed. These include the replacement of check-in counters, implementation of a central FAST zone, and installation of new baggage conveyors and other JEWEL CHANGI AIRPORT (JEWEL) and T3 are progressing well. Jewel design finishes. Construction of Changi Airport’s will also be integrated with Level 1 new development, Jewel, is fast of T1, and arriving passengers The Baggage Claim Hall is taking shape for its opening in the will be able to walk seamlessly undergoing expansion, with four first half of 2019. Situated at the into the development. baggage claim belts having been heart of Changi Airport, Jewel is a upgraded, while the interior design mixed-use development comprising In June 2017, the design of the of the hall is being refreshed. a range of offerings including topmost level of Jewel, featuring The Baggage Handling System gardens and attractions, retail a line-up of unique lifestyle is also being upgraded to a fully outlets, a hotel, and facilities for offerings, was unveiled. Occupying automated system with a new airport operations. It is envisaged 14,000 sqm, Canopy Park will baggage security screening system, to strengthen the Changi air hub feature offerings such as play and automated storage for early and capture passenger mindshare, attractions, gardens, walking trails, check-in baggage. The Baggage to boost Singapore’s appeal as a and dining outlets. Half of the total Handling Area has been revamped stopover point for passengers. landscape and greenery in Jewel – to provide a better working over 1,400 trees and palms – will be environment for ground handling Façade works, which commenced housed in Canopy Park. Designed staff with enhanced lighting, in late 2016, have been completed. to be a world-class, lifestyle leisure ventilation and signage. Jewel’s overall façade is intricately attraction, Canopy Park promises a T1’s Arrival Hall will also receive a made up of more than 9,000 gamut of experiences for visitors to facelift and see a 35% expansion in pieces of specially manufactured Jewel and passengers at Changi floor area to 8,500 sqm. As part of glass, close to 18,000 pieces of Airport. steel element and over 6,000 this revamp, the new taxi stand at steel nodes. T1 Expansion Basement 1 of T1 was operational In conjunction with the in December 2017, with the Structural works for two passenger development of Jewel, T1 is new interim Arrival Pick-Up area linkbridges connecting Jewel to T2 undergoing expansion works to relocated in February 2018.

Each glass panel of the Jewel roof is carefully lifted 45m above Close to 18,000 pieces of steel element and over 6,000 steel nodes were used in the ground for installation. the construction of the Jewel façade. 62 CHANGI AIRPORT GROUP

Seletar Airport’s new passenger terminal building is designed to handle 700,000 passenger movements annually.

CAG took great effort to minimise disruption to airport operations. Over the past year, a total of six ramps connecting Jewel’s basement levels with existing roads, as well as linkbridges to T2 and T3 that crossed existing roads and departure ramps, were constructed. These construction works required more than 180 nights of lane closures and road diversions, all of which were carefully coordinated to ensure minimal impact to ongoing airport operations.

SELETAR AIRPORT Work continued apace on the Changi East development site in FY2017/18, including the As part of the wider Seletar construction of canals to drain water from the site. Aerospace Park development and to enhance the area as a private business aviation gateway buildings, by the Building and of 2018, and will eventually replace to Singapore, Seletar Airport Construction Authority of Singapore, the current passenger building has been upgraded with a new the terminal building features a which has been in operation since passenger terminal. Spanning a design optimised for efficient energy, 1982. To better support traffic growth gross floor area of 10,000 sqm, water and resource utilisation. A low- the new terminal is designed to at Changi Airport, Seletar Airport handle about 700,000 passenger energy-consumption design puts will also handle turboprop aircraft movements a year and will have the building in good stead to enjoy operations currently operating at three new aircraft stands directly long-term operational cost savings Changi Airport. and minimises its carbon footprint in front of the terminal building CHANGI EAST to allow passengers quick and on the environment. Work continued apace on the efficient aircraft access. The next phase of development Changi East development in The building structure has been includes the testing and FY2017/18. Changi East, which completed, and has received its commissioning of key systems such spans 1,080 hectares, consists Temporary Occupation Permit. as baggage belt and security of the development of a three- Awarded the Green Mark Platinum screening equipment, as well runway system for Changi Airport; Award for Non-Residential Buildings, as interior furnishings and fitting tunnel systems and other related Singapore’s highest award for out. The terminal is expected to infrastructure and transport links; environmental sustainability for commence operations at the end and a new T5. ANNUAL REPORT 2017/18 63

Building a three-runway system Amid the ongoing construction as arrival and departure flows, Much progress was made on work, Changi East also maintained security, staff, and logistics flows converting an existing military a clean safety record, with zero have been completed for T5. runway into a third runway for aerodrome incidents in FY2017/18. These studies have enabled the Changi Airport that can be used This was accomplished through T5 team to develop the overall by civilian aircraft. The runway innovative ground control concept for the terminal and was successfully extended and measures, such as an Automated identify its functional and spatial strengthened. Taxiways were Height Infringement Detection requirements. The appointment of System, which used GPS sensors constructed to prepare the the T5 Master Building and Master to detect incidences of height runway for connection with the Civil Consultants in April 2018 will infringement among worksite rest of Changi Airport, and a enable the team to move ahead machinery and equipment, and new drainage network was also with the design work on Changi an Online Work Declaration System, constructed. Flight checks on the Airport’s next terminal. which provided an electronic runway were also completed in platform to enable contractors to Relocating to a new home order to prepare it for handover to make work declarations at any CAG’s entire Changi East team the Republic of Singapore Air Force time of day. moved into the new Changi East (RSAF) in mid-2018. Tunneling ahead Project Office in September 2017, With the third runway then More than half of the design enabling them to work together undergoing the final phase of work for the tunnels on the under one roof just beside the development, work had to be done Changi East site has been worksite. The Changi East Project to facilitate the towing of aircraft completed, in preparation for the Office features, among other from Changi Airport to the location commencement of construction. facilities, a halal cafeteria serving of Singapore Airshow 2018. The These tunnels will house roads a mixture of Asian and Western three-runway system team had to for airside vehicles, as well as dishes, a small gymnasium and a strengthen an existing bridge so vital infrastructure like electrical training room. Working under one that it could support the weight wiring and water pipes; connect roof facilitates greater collaboration of the largest civilian aircraft on the T5 headhouse with its satellite within the Changi East team and terminals; and link T5 with the other exhibition at the airshow. Other at the same time, builds intangible terminals in Changi Airport. works, such as installation of tow bonds among team members, way lights and grading of Aviation Designing the future of T5 which will be invaluable in the long Park Road, ensured that all aircraft Several concept of operations journey ahead for the Changi East was towed safely and efficiently. studies, spanning areas such development.

The new Changi East Project Office – home to CAG’s Changi East team. 64 CHANGI AIRPORT GROUP

DRIVING spending patterns, point-of-sale transactions, flight data and more were integrated. The CDI project Digital was completed in September 2017 and resulted in enhanced data analytics and digital marketing Innovation capabilities to better engage with customers. With actionable customer insights, CAG is able to deliver relevant and timely content s traffic at Changi Airport to meet the needs of the many to customers according to their continues to grow, the quest different profiles of customers at profiles, interests and preferences, A delivering a personalised Changi to connect with our passengers Changi Airport. With each platform and create the best experience housing a rich amount of data, a Experience at different touchpoints. remains. The ability to leverage centralised customer information TRANSFORMING THROUGH technology seamlessly in a database was built to gather trends TECHNOLOGY practical way, to serve increasingly and insights for deeper and more In today’s digital era, Changi Airport tech-savvy passengers and to holistic engagement with Changi’s needs to constantly transform empower staff is key. This also customers. to stay ahead of competition. involved closer inter-division Leveraging the smart use of digital collaboration within CAG to CAG embarked on a strategic technologies allows CAG to be project to design and build a transform passenger experience aware of the airport’s operating centralised customer repository and lay the foundation for Changi environment, and deploy resources in August 2016. The Customer Airport to be a Smart Airport of effectively through analytics Discovery Insights (CDI) project the future. and real-time feedback. Working allows a 360-degree view of together with airport partners, KNOWING CUSTOMERS BETTER passengers to understand their CAG has successfully integrated Over the years, Changi Airport user journey through the various advanced information technology has developed various customer touchpoints in the airport such systems at T4, the first terminal in engagement programmes such as as check-in, immigration and Changi Airport to integrate facial iShopChangi, Changi Rewards and boarding. As part of the project, recognition technology with end-to- Changi Millionaire, each designed 12 data sources including end self-service options.

For the successful initiatives in digitally transforming Changi Airport’s operations and service processes, CAG was named IDC’s ‘Digital Transformer of the year’ at the country, regional and international levels. ANNUAL REPORT 2017/18 65

EXPLORING NEW APPROACHES OF WORKING WITH TECHNOLOGY PARTNERS To embody Changi’s spirit of innovation and stay ahead of the pack as an organisation in the coming years, CAG aims to push forward and transform operations with new technologies, partnerships and business models; grow new lines of business; and deliver a lean cost base even as Changi Airport doubles in size. To do so, CAG is adopting new modes of working with technology partners, beyond regular procurement and tenders.

In August 2017, CAG ran an Intelligent Video Analytics (IVA) Through CDI, CAG will be able to deliver a personalised and positively surprising Changi Experience to customers based on their preferences and user journey at Changi Airport. challenge where companies were invited to demonstrate their capabilities for airport operations use cases, including passenger participating companies to better differentiate between passengers flow management at the gatehold understand the context and need in the queue, passers-by and rooms, through the analysis of before co-creating solutions with passengers already inside existing CCTV footage. Through such CAG. Companies were provided with the gatehold rooms. Of the 12 challenges, CAG was able to adopt actual CCTV footage to analyse companies who participated in a quicker and leaner way of working and train their model. With that, they the challenge, Xjera Labs and NCS with partners for new technology demonstrated their ability to detect outperformed and were selected to solutions which are not off the shelf. queues and crowd conditions at the build a prototype system for three gatehold rooms. gatehold rooms. As an example, for the IVA challenge, CAG shared specific This was not an easy challenge, use cases and limitations, allowing as the solution would need to

With the IVA, CAG and Certis CISCO will be able to better monitor crowd conditions at gatehold rooms. 66 CHANGI AIRPORT GROUP

STRENGTHENING OPENING A NEW TERMINAL ON SOCIAL MEDIA For the first time in Changi’s history, CAG was able to leverage social media to drive interest about the T4 Bonds Open House, awareness of the new terminal and its exciting offerings. Changi developed exclusive content to introduce the terminal, teased audiences about the On Social Open House and generated buzz around the terminal’s key development milestones. A Facebook event page was created to encourage registrations for the Open House that led to more than 13,000 sign-ups through the event page. The team also successfully organised hangi Airport’s social media efforts continued a preview for 100 social media advocates and C to show outstanding performance as influencers to share their personal preview experience engagement with passengers strengthened over the and help drum up excitement and generate interest year. CAG continued to build firm bonds and brand in the terminal. Overall, more than 8,000 pieces of affinity with its online community by generating greater user-generated content were shared on social media awareness of the airport’s facilities and commercial platforms within two weeks. activities through its social media platforms such as Facebook, Instagram, LinkedIn, Twitter, Weibo and YouTube.

SOCIAL MEDIA CHANNEL STATISTICS

FACEBOOK 2,506,723 +30%

TWITTER 73,585 +22%

INSTAGRAM 153,786 +43%

To excite and tease audiences, T4 was introduced to global audiences on Facebook through a slew of social activities. Changi Airport’s Facebook page crossed the two million page likes milestone, while its Instagram channel To cap it off, a video celebrating T4’s first operational grew beyond 150,000 followers. Changi’s social media day was produced. The video garnered 2.4 million team also succeeded in clinching four awards for its views and reached 5.2 million people around the campaigns and engagement efforts. world, cementing the T4 launch campaign as the most successful campaign of the year.

INDUSTRY AWARDS

Hall of Fame 2017 SOCIAL CAMPAIGN OF THE YEAR (Gold Awards)

Markies 2017 BEST IDEA – SOCIAL (Gold Awards)

Markies 2017 BEST IDEA – VIRAL (Silver Awards)

Markies 2017 BEST USE OF APPS/MOBILE (Bronze Awards) The video of the T4 opening was viewed by 5.2 million people around the world. ANNUAL REPORT 2017/18 67

NEW WAYS OF ENGAGING OUR FOLLOWERS On top of the beautifully curated mix of airport, aircraft and destination imagery, CAG rode on new social media trends and development to deepen engagement with its audiences. With video being the most consumed type of content on social media, Changi tapped on the live streaming capabilities of Facebook and 15-second video highlights on Instagram, also known as Instagram Stories. Polls and raw content on Instagram Stories allowed Changi to engage followers by presenting behind-the-scenes Through CAG’s social media channels, the public was given firsthand content and live events at a more personal level. updates on the T50 incident in February 2018. Changi also used the interactive 360-degree image technology on Facebook to display T4’s numbers and figures.

Fans were given the opportunity to catch CAG’s annual event, Changi Millionaire, live on Facebook.

On the LinkedIn platform, CAG engaged the professional community with thought leadership articles contributed by CAG’s senior management on various topics. This allowed CAG to position itself as Timely updates were shared on Facebook to ensure that Changi a leader and voice of the aviation industry. Through cements its position as a reliable airport. this channel, CAG was able to share information on Changi Airport and create awareness on its work culture and job opportunities, and present itself as an employer of choice. social media reach to provide updates on incidents which disrupted air travel. They include timely updates In building its social channels, CAG continued to on the airport’s operational status when the T2 fire establish greater content synergies by leveraging occurred in May 2017, and subsequently when Runway articles created for its other communication platforms 1 had to be closed in February 2018 due to an aircraft such as its online blog, Now Boarding, and e-newsletter, incident. Changi Journeys, which feature interesting travel stories and lesser known facts about Changi. As Changi continues to be a reliable and popular airport to millions of passengers worldwide, social AN ESSENTIAL TOOL FOR CRISIS COMMUNICATIONS media will continue to be a key channel to maintain With increasing public reliance on social media as a a direct contact and relationship with passengers, source of news and information, Changi tapped on its regardless of geographical location. 68 CHANGI AIRPORT GROUP

BUILDING annum or mppa category) by OAG Aviation Worldwide. The airport was also voted to have the Best Airport International Staff Service in Brazil, and sixth in Latin America in 2017 by Skytrax. The airport’s operational excellence Presence also achieved top scores in a year- long operational and passenger service survey mandated by the regulator, National Civil Aviation Agency of Brazil. hangi Airports International passengers enjoyed new facilities C (CAI), a fully-owned like airline lounges, and a wider During the year, the airport subsidiary of Changi Airport selection of novel dining and retail concession company underwent Group, continues to develop its outlets. restructuring. The long-term loan investments and share its expertise from the Brazilian Development with airports around the world. Its In 2017, Tom Jobim International Bank to finance the expansion of portfolio includes assets in Brazil, became the first airport in the airport for the Olympic Games India and Russia, and consultancy South America to achieve was approved. The concession projects in China, the Middle East the International Air Transport company successfully restructured and Southeast Asia. Association Centre of Excellence its concession fee payment, to for Independent Validators allow the airport to grow and BRAZIL Certification for Pharmaceutical recover from the recent economic Tom Jobim International Airport Handling (IATA CEIV Pharma) for downturn. Following discussions with in Rio de Janeiro, Brazil, continues its cargo operations. This positions Odebrecht Transport and various to deliver robust operational the airport as an important logistics government agencies, CAI assumed and financial performance in partner in the pharmaceutical majority control of Tom Jobim FY2017/18. Passenger traffic at chain, and a main port of entry for International Airport with a 51% Tom Jobim International remained pharmaceutical products in Latin shareholding in the concessionaire, strong despite Brazil’s weak America. while government agency, Infraero, economic situation. The airport maintained its 49% share. With these welcomed 4.3 million international The improvements at the airport changes, the airport is poised to passengers during the year when were widely recognised. Tom Jobim benefit from, and ride on Brazil’s it was host airport to the 2016 International was named the Best economic recovery. Summer Olympics in Rio de Janeiro. Airport for Operational Efficiency in Latin America 2017, and Most INDIA Non-aeronautical revenue grew Punctual Airport in Latin America Durgapur Aerotropolis is India’s 13% over the previous year as 2017 (10-20 million passengers per first private operational greenfield airport city.

Indian national carrier Air India recently launched a four weekly Delhi–Durgapur service from the city’s Kazi Nazrul Islam Airport.

Township development is making steady progress. Mahindra Automobile Service Centre by Joshnika Developers, and a food processing plant by Keventer Agro, started operations during the year. Durgapur Multi-Speciality Hospital commenced construction works for a health care facility, while Narayana School, an operating school within the township, commenced works to expand Air India launched a four weekly Delhi–Durgapur service from Kazi Nazrul Islam Airport. student hostel facilities. ANNUAL REPORT 2017/18 69

The airports once again clinched top spots on international and national platforms. Sochi International Airport beat strong competition to be voted Best Airport by Size and Region, Europe (5-15 mppa), after having won the same award in the 2-5 mppa category, in the last two years, at the Airports Council International (ACI) Airport Service Quality (ASQ) Awards 2017. For the third year running, Sochi International was named Best Airport by Region, Europe (over 2 mppa). On the national level, Sochi and Anapa Anapa Airport welcomed visitors with its new terminal complex in 2017. Airports maintained their Best Airport titles in their respective traffic categories at Russia’s included self-service features at National Aviation Infrastructure During the year, the Government check-in and boarding, the airports Show 2018. of West Bengal raised their stake in implemented a host of initiatives the aerotropolis from 11% to 26%, - accessible infrastructure, service CAI has a 30% stake in the joint as a mark of its confidence in the improvement workshops, and skills venture which owns the four project. Located in West Bengal, training - to offer passengers best-in- airports and their management the aerotropolis is developed by class service. More retail and dining company, Basel Aero. Bengal Aerotropolis Projects Limited, options were also introduced, along in which CAI has a 30.2% stake. with revamped business lounges, Vladivostok International Airport in Russia’s Far East reaped strong RUSSIA to enhance customer choice and traffic growth of 19% year-on-year In 2012, when CAI first invested in the comfort. to reach 2.3 million passengers in four airports in Russia’s Krasnodar In July last year, Anapa International FY2017/18. Working closely with region - Anapa, Gelendzhik, Airport opened a new 11,800 sqm the city’s tourism authorities, and Krasnodar and Sochi - passenger passenger complex. Together with targeted airline marketing traffic was 5.5 million passengers. with the current terminal, the programmes and familiarisation Since then, passenger traffic has airport tripled its capacity to trips, the airport increased flight doubled with traffic development accommodate up to 1,100 frequencies and launched initiatives that attracted new airlines, passengers per hour. new flights within Russia and to destinations, and increased flight frequencies.

Passenger traffic in FY2017/18 increased by almost 10% compared to FY2016/17, crossing the 11-million milestone for the first time. Krasnodar International Airport and Sochi International Airport, in particular, saw significant growth in the international segment, driven by key markets such as Istanbul, Tbilisi, Tel- Aviv and Vienna. The airports serve 9% of the total passenger traffic, and 3.5% of the total cargo flow in Russia.

Enhancing passenger experience continues to be the top priority for all four airports. In addition to operational improvements that Vladivostok International won the Routes Asia 2018 Marketing Award (under 4 mppa). 70 CHANGI AIRPORT GROUP

Chongqing Airport’s new Terminal 3A features unique shopfronts and products that promote the city’s unique heritage.

international destinations such as enhance the airport’s commercial Passenger experience was China, South Korea and Thailand. landscape. enhanced with new passenger loading bridges, additional aircraft To uplift service levels and improve Chongqing Airport’s new Terminal parking stands and a new arrival passenger experience, the airport 3A successfully opened in August bus bay. A premium meet-and- is implementing operational and 2017 with unique shopfronts and assist service with a dedicated service enhancements as well products that promoted the city’s lounge was introduced at the as revamping its commercial rich identity, and created a strong airport. Work has also commenced selection. Plans for a new in- sense of place. Passengers were to update the baggage handling terminal comfort lounge with nap spoilt for choice with an extensive systems and baggage belts, rooms are also on track. selection of top international labels expand the check-in facilities, and increase the number of city In recognition of its efforts to build and popular heritage brands. terminals. partners and grow its network, Chongqing Airport was recently Vladivostok International won the named Best Airport in Asia Pacific On the commercial front, a new Routes Asia 2018 Marketing Award (25-40 mppa) at the ACI ASQ retail experience featuring an (under 4 mppa). It also bagged Awards 2017. The Creative Corridor exclusive walk through duty free second place for Best International by JCDecaux China, in Terminal area spanning over 1,300 sqm Airport (up to 4 mppa) at Russia’s 3A, also won The Moodie Davitt was launched in July 2017. Training National Aviation Infrastructure continues to be a key feature in Report’s Most Impactful Individual Show 2018. transforming the airport’s service Advertising Execution Award. levels. CAI holds a one-third stake in SAUDI ARABIA the joint venture that owns and The airport was successfully CAI continues its multi-year manages the airport. corporatised as Dammam Airports partnership with the General Company on 1 July 2017 and CHINA Authority of Civil Aviation in has since developed new long- CAI and Chongqing Airport Group Saudi Arabia to enhance the term strategies which include the signed a commercial joint venture performance of King Fahd expansion and optimisation of agreement in 2017 to strengthen International Airport in Dammam. terminal space, and improvements Chongqing Jiangbei International to key infrastructure. Airport’s non-aeronautical business. During the year, four new airlines The collaboration focused on and five city links were added, introducing more innovative significantly improving the airport’s elements, experiential concepts connectivity and paving the way and top-class retail tenants to for an upswing in traffic. ANNUAL REPORT 2017/18 71

WINNING People Tools was rolled out in April 2017. The tools aim to transform the way employees work in Hearts at the CAG and to provide them with greater flexibility to work ‘anytime, anywhere’. Employee services such Workplace as leave and claim submissions, performance and development planning can now be done through the cloud-based People Tools system, which has brought n 2 March 2018, CAG branding, and focuses on greater ease and convenience for Owas crowned the winner three main areas: overall brand employees. Following the roll-out in for Best Workplace Culture and awareness, absolute attractiveness April 2017, a survey was conducted Engagement at the HRM Awards and relative attractiveness. Having among employees with positive 2018, a testament to CAG’s efforts a strong employer brand plays an outcomes. 87% of employees in building a strong employer important role in CAG’s efforts to surveyed had a positive experience brand. The award recognised the attract new talent and to retain in using the new suite of People organisation’s efforts in staying its people. As part of its employer Tools, and more than 80% saw true to its values and beliefs, and branding efforts, CAG shares real significant improvements in the helped shaped strong employee stories about its culture, people, claim submission process. engagement within CAG. At the and their exciting experiences STRUCTURING FOR SUCCESS award ceremony, Mr Lee Seow of working in an airport on digital FY2017/18 saw several changes Hiang, CEO of CAG also received spaces and at career fairs. This in CAG’s organisation structure the Best C-Suite Leader award. He award is an affirmation of CAG’s and business models, to better was recognised for his commitment efforts in attracting the best talent, align people structures, roles and in driving Human Resource (HR) and is a particularly meaningful processes. In September 2017, a strategies across CAG and one in the journey of building and new Enterprise Performance & the industry. growing its people. Development cluster was formed At the Randstad Awards 2017, IMPROVING EASE OF EMPLOYEE to give a sharper focus on the CAG was ranked the second most TRANSACTIONS transformation of CAG’s current attractive employer in Singapore. Following the physical operations with new technologies, This is the fourth consecutive year transformation of the workplace partnerships and business models, as well as to drive innovation and that CAG was ranked in the top where employees moved into a grow new businesses. The new three. The ranking is determined refreshed work environment of cluster was formed by integrating based on a survey on employer new work spaces, a new suite of several divisions - Finance, Corporate Strategy & Business Development, Innovation Lab, and Enterprise Risk Management. In addition, to champion and continue CAG’s environmental sustainability efforts, a dedicated Environmental Sustainability team was also established within the new cluster.

In CAG’s efforts to enhance productivity and streamline work processes among operational teams in the new T4, a new operation model for Integrated Facilities Management was developed. This involved the integration of functions from Airport Operations Management, Commercial and Engineering and CAG’s People Team and CEO, receiving the Best Workplace Culture and Engagement award and the Best C-Suite Leader award respectively. Development Group. 72 CHANGI AIRPORT GROUP

Managed by CAG’s internal communications team, the latest news and developments within CAG are shared on the platform, together with stories about the airport community and regular giveaways tied to airport events – with the aim of encouraging employee engagement. In.Touch roadshows were rolled out with the aim to increase adoption of the application, and also to build stronger connection with divisions based out of Changi Airport.

CAG’s senior management uses In.Touch to engage with employees by sharing their ideas, opinions, work, and office life with them. In.Touch is also the platform that employees can go to, for information during crisis situations. CAG employees sharing stories and lessons learnt Enhancements to the app were from their innovation carried out during the year to experiences. ensure that it is able to reach out to as many employees as possible. As of March 2018, over 90% of employees have In.Touch on their test ideas. Storytelling continued phones, and the app sees more to be the mainstay of LearnFest, as than 400 staff logging in every day. employees got to hear personal ENHANCING TERMINAL ‘H’ anecdotes from their peers on their Terminal ‘H’ (Heartware) remained innovation experience at CAG, at the core of CAG’s people strategy as well as insights from external to build a deep engagement with speakers from Airbnb, DBS and its employees. Active employee Grab among others, all of whom engagement and investing in its had successful stories about their people’s personal and professional organisation’s journey in innovation. growth is important in making CAG a great company to work in. To create an immersive experience An example of active employee for employees, LearnFest 2017 was engagement is Fun Fridays, a brought into CAG’s office spaces for bi-monthly themed event to the first time, with interactive pop- encourage employees to take up sessions around the office. The some time off to enjoy each other’s event saw close to 450 employee company over games, food and participations, a 35% increase as drinks. compared to its last run in 2015.

Another example in building STAYING IN TOUCH engagement among staff is the Another aspect of CAG’s employee Learning Festival (LearnFest), engagement efforts was the which aims to foster and sustain a continued use of In.Touch, an culture of innovation in CAG. Held internal social media platform in November 2017, the week-long designed to foster a greater sense Learnfest, branded with the tagline of community among employees, #StartSomethingToday, created the and to also ensure that they are time and space for employees to kept informed of CAG’s news and learn techniques to generate and announcements. ANNUAL REPORT 2017/18 73

Changi Foundation also offers support to programmes run by Reaching out to Voluntary Welfare Organisations, for disadvantaged youths. This includes funding developmental the Community programmes, and offering FOR A BETTER TOMORROW education awards to students. Since 2012, the CAG-Howe Yoon Chong Book Prize and Changi Foundation Education Award have benefitted an average of 300 students have a multi-faceted experience hangi Foundation, the annually, and was extended to with Changi Airport. Some of the Cphilanthropic arm of CAG, students from Spectra Secondary works to enhance lives through airport partners even went beyond School and Crest Secondary School community efforts. With its belief the requested areas of support, starting from January 2018. in the potential of people, Changi to initiate new job experiences Foundation seeks to reach out and and offer two-month industrial Through the M.A.D (Making A support disadvantaged youths, experiential placements or part- Difference) programme, CAG by funding programmes that offer time employment for the students. continues to provide platforms for opportunities and tools to equip staff to contribute to causes close to them to lead independent and Besides supporting NLS, Changi their hearts. Besides being entitled meaningful lives. Foundation adopted Metta School to five days of volunteerism leave, a in 2018 – a school that enrolls new Christmas Giving Campaign NorthLight School (NLS) has students with Mild Intellectual was introduced this year, with a been Changi Foundation’s main Disability and Autism Spectrum dollar-to-dollar match by Changi beneficiary since 2014. CAG and its Disorder. Changi Foundation Foundation. Staff were encouraged participating airport partners have first engaged Metta School to to make monetary donations to been contributing meaningfully understand their requirements, so charities or causes of their choice. through imparting career tips and that these could be better matched In all, staff donated S$7,140 to guidance, to better prepare the the charities of their choice and against the areas that Changi youths to enter society. With the matching contributions from Foundation could contribute in. belief in the value of a long-term Changi Foundation was donated to CAG has offered support for Metta and meaningful engagement, the the Community Chest in support of School in two programmes – the partnership with NLS was renewed disadvantaged youth programmes. in 2018 for another three years. Social Competence Programme (SCP) and the Employment Pathway To promote and showcase the Changi Foundation ran eight Programme (EPP), which will be special talents of people with autism wide-ranging programmes in introduced in FY2018/19. from The Art Faculty, an e-commerce multiple runs for NLS during the year, leveraging on the skills of Changi’s staff to guide the students, including how to ace their interviews and improve their numeracy.

About 70 NLS students took part in the Job Attachment Programme, where CAG and various airport partners offered job attachments in the hospitality, retail, engineering and facilities management sectors. They were guided through tasks, developing work-related skills through the programme, and gained valuable working experience. With the support and commitment of the airport

partners, the youths were able to CAG volunteer helping a Metta School student during the Social Competency Programme. 74 CHANGI AIRPORT GROUP

Meaningful sustainability issues and best practices were shared Lee Seow Hiang receiving the ACA Level 3 on behalf of CAG. through the Changi Airport Community Environmental Forum.

platform that celebrates and The accreditation is also a 2017 – a platform that brought showcases the abilities of people commitment by Changi Airport to together the organisation and with autism and related challenges, reduce direct, controllable emissions airport partners across the private Changi Airport’s online shopping every year, and to actively work with and public sector, including portal, iShopChangi, launched a airport stakeholders to reduce their airlines (SIA Group), ground ‘Shop for Good’ space. Artworks and direct emissions. ACA represents handling agents (Dnata, SATS, products designed by the artists Changi Airport’s commitment to SIA Engineering Company), are now available for passengers improve the airport environment, government agencies (Civil to purchase online, providing a and to work in tandem with the Aviation Authority of Singapore, platform for these home-grown community to reduce Greenhouse Energy Market Authority, National artists with special needs to carry Gas (GHG) emissions. Climate Change Secretariat, their products. To reduce the airport’s GHG National Environment Agency), For its year-long effort, CAG was emissions and carbon footprint, research institutes (NUS Solar Energy recognised as a Champion of CAG introduced a fleet of electric Research Institute of Singapore) Good by the National Volunteer & baggage handling tractors, and clean technology solution Philanthropy Centre (NVPC). CAG which is now implemented at providers. remains committed to influencing the new T4. Prior to the roll-out, Over 100 participants attended the and multiplying corporate giving in CAG engaged ground-handling inaugural forum, which discussed Singapore. partners and communicated the impact of sustainability issues the benefits of doing so – going in the airport environment over ROAD TO SUSTAINABILITY beyond operational benefits, and a series of keynote presentations In FY2017/18, Changi Airport promoting the use of such electric received the Airport Carbon vehicles through the lens of global and Q&A sessions. This resulted Accreditation (ACA) Level 3, sustainability. With the buy-in from in partnerships formed to assess administered by the Airports Council the airport partners, CAG’s efforts in detail the use of sustainable International (ACI) to encourage paid off and a common pool of alternative fuels for airlines and and enable airports to track and electric chargers was installed waste management solutions, reduce their carbon emissions. This in the baggage handling areas which can be applied throughout was a result of the efforts made in to facilitate the charging of the Changi’s passenger terminals. the mapping of Changi Airport’s tractors. carbon footprint to reduce emissions The forum will be held on an annual and in developing a structured To complement CAG’s sustainability basis, as a dedicated industry forum stakeholder engagement plan to efforts, CAG organised the inaugural to share sustainability best practices reach out to the airport community Changi Airport Community and to engage both private and on sustainability initiatives. Environmental Forum in October public-sector stakeholders. ANNUAL REPORT 2017/18 75

GROUP FINANCIAL SUMMARY

76 Directors’ Statement 78 Independent Auditor’s Report 81 Consolidated Income Statement 82 Consolidated Statement of Comprehensive Income 83 Balance Sheets 84 Consolidated Statement of Changes in Equity 85 Consolidated Statement of Cash Flows 87 Listing of significant companies in the Group

The Group Financial Summary as set out on pages 76 to 88 contains only a summary of the information extracted from the Statement by Directors and the audited consolidated financial statements of Changi Airport Group (Singapore) Pte. Ltd. and its subsidiaries for the financial year ended 31 March 2018.

For a full understanding of the state of affairs of the Company and the Group as at 31 March 2018 and of the results of the Group for the financial year ended 31 March 2018, the Group Financial Summary should be read in conjunction with the audited consolidated financial statements and the audit report thereon, which can be obtained via the Company’s website (http://www.changiairportgroup.com). 76 CHANGI AIRPORT GROUP

DIRECTORS’ STATEMENT For the financial year ended 31 March 2018

The directors present their statement to the member together with the audited financial statements of the Group for the financial year ended 31 March 2018 and the balance sheet of the Company as at 31 March 2018.

In the opinion of the directors,

(a) the balance sheet of the Company and the consolidated financial statements of the Group as set out on pages 81 to 86 are drawn up so as to give a true and fair view of the financial position of the Company and of the Group as at 31 March 2018 and the financial performance, changes in equity and cash flows of the Group for the financial year covered by the consolidated financial statements; and

(b) at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due.

DIRECTORS

The directors of the Company in office at the date of this statement are as follows:

Mr Liew Mun Leong Mr Eric Ang Teik Lim Mr Michael George William Barclay Mr Miguel Ko Kai Kwun Mr Richard R Magnus Mr Ng Chee Khern (Appointed on 1 March 2018) Mrs Tan Ching Yee Mr Tan Gee Paw Mr Tan Kong Yam Mr Danny Teoh Leong Kay Mr Lim Zhi Jian (Alternate director to Mrs Tan Ching Yee) Mr Lee Seow Hiang

ARRANGEMENTS TO ENABLE DIRECTORS TO ACQUIRE SHARES AND DEBENTURES

Neither at the end of nor at any time during the financial year was the Company a party to any arrangement whose object was to enable the directors of the Company to acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate.

DIRECTORS’ INTERESTS IN SHARES OR DEBENTURES

According to the register of directors’ shareholdings, none of the directors holding office at the end of the financial year had any interest in the shares or debentures of the Company or its related corporations. ANNUAL REPORT 2017/18 77

DIRECTORS’ STATEMENT For the financial year ended 31 March 2018

SHARE OPTIONS

There were no options granted during the financial year to subscribe for unissued shares of the Company.

No shares have been issued during the financial year by virtue of the exercise of options to take up unissued shares of the Company.

There were no unissued shares of the Company under option at the end of the financial year.

INDEPENDENT AUDITOR

The independent auditor, PricewaterhouseCoopers LLP, has expressed its willingness to accept re-appointment.

On behalf of the Board of Directors

Liew Mun Leong Lee Seow Hiang Director Director

31 May 2018 78 CHANGI AIRPORT GROUP

INDEPENDENT AUDITOR’S REPORT To the Member of Changi Airport Group (Singapore) Pte. Ltd.

REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS

Our Opinion

In our opinion, the accompanying consolidated financial statements of Changi Airport Group (Singapore) Pte. Ltd. (the “Company”) and its subsidiaries (the “Group”) and the balance sheet of the Company are properly drawn up in accordance with the provisions of the Companies Act, Chapter 50 (the “Act”) and Financial Reporting Standards in Singapore (“FRSs”) so as to give a true and fair view of the consolidated financial position of the Group and the financial position of the Company as at 31 March 2018 and of the consolidated financial performance, consolidated changes in equity and consolidated cash flows of the Group for the financial year ended on that date.

What we have audited

The financial statements of the Company and the Group comprise:

• the consolidated income statement of the Group for the year ended 31 March 2018;

• the consolidated statement of comprehensive income of the Group for the year then ended;

• the balance sheets of the Company and the Group as at 31 March 2018;

• the consolidated statement of changes in equity of the Group for the year then ended;

• the consolidated statement of cash flows of the Group for the year then ended; and

• the notes to the financial statements, including a summary of significant accounting policies.

Basis for Opinion

We conducted our audit in accordance with Singapore Standards on Auditing (“SSAs”). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We are independent of the Group in accordance with the Accounting and Corporate Regulatory Authority Code of Professional Conduct and Ethics for Public Accountants and Accounting Entities (“ACRA Code”) together with the ethical requirements that are relevant to our audit of the financial statements in Singapore, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ACRA Code. ANNUAL REPORT 2017/18 79

INDEPENDENT AUDITOR’S REPORT To the Member of Changi Airport Group (Singapore) Pte. Ltd.

Other Information

Management is responsible for the other information. The other information refers to the Directors’ Statement (but does not include the financial statements and our auditor’s report thereon), which we obtained prior to the date of this auditor’s report, and the other sections of the annual report (“the Other Sections”), which are expected to be made available to us after that date.

Our opinion on the financial statements does not cover the other information and we do not and will not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

If, based on the work we have performed on the other information that we obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

When we read the Other Sections, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance and take appropriate actions in accordance with SSAs.

Responsibilities of Management and Directors for the Financial Statements

Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the provisions of the Act and FRSs, and for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair financial statements and to maintain accountability of assets.

In preparing the financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

The directors’ responsibilities include overseeing the Group’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SSAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with SSAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. 80 CHANGI AIRPORT GROUP

INDEPENDENT AUDITOR’S REPORT To the Member of Changi Airport Group (Singapore) Pte. Ltd.

Auditor’s Responsibilities for the Audit of the Financial Statements (continued)

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

Report on Other Legal and Regulatory Requirements

In our opinion, the accounting and other records required by the Act to be kept by the Company and by those subsidiary corporations incorporated in Singapore of which we are the auditors, have been properly kept in accordance with the provisions of the Act.

PricewaterhouseCoopers LLP Public Accountants and Chartered Accountants Singapore, 31 May 2018 ANNUAL REPORT 2017/18 81

CONSOLIDATED INCOME STATEMENT For the financial year ended 31 March 2018

Group 2018 2017 $’000 $’000

Revenue 2,601,829 2,305,330

Expenses – Employee compensation (256,593) (228,908) – Depreciation of property, plant and equipment (344,016) (304,060) – Amortisation of intangible assets (13,292) – – Property tax (63,926) (63,090) – Maintenance of land, buildings and equipment (260,421) (277,407) – Services and security related expenses (243,919) (195,845) – Annual ground rent and licence fees (79,810) (78,576) – CAAS services (220,458) (179,119) – Other operating expenses (166,523) (74,050) Total (1,648,958) (1,401,055)

Operating profit 952,871 904,275

Interest expenses (12,078) – Finance expense – concession payable (45,446) – Other income/(losses) – net 116,493 (43,643)

Share of results of associated companies and joint ventures (3,081) (24,392)

Profit before income tax 1,008,759 836,240

Income tax expense (173,858) (179,064)

Profit after tax 834,901 657,176 Attributable to: Equity holder of the Company 849,299 661,976 Non-controlling interests (14,398) (4,800) 834,901 657,176 82 CHANGI AIRPORT GROUP

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the financial year ended 31 March 2018

Group 2018 2017 $’000 $’000

Profit after tax 834,901 657,176

Other comprehensive (loss)/income: Items that will not be reclassified subsequently to profit or loss:

Share of reserve of associated company 9,591 –

Items that may be reclassified subsequently to profit or loss:

Cash flow hedges – Fair value gains 1,846 303 – Reclassified to investment in associated companies and joint ventures – (320)

Currency translation differences – (Losses)/gains (20,848) 62,088 Other comprehensive (loss)/income, net of tax (9,411) 62,071

Total comprehensive income 825,490 719,247

Total comprehensive income attributable to: Equity holder of the Company 838,981 723,899 Non-controlling interests (13,491) (4,652) 825,490 719,247 ANNUAL REPORT 2017/18 83

BALANCE SHEETS As at 31 March 2018

Group Company 2018 2017 2018 2017 $’000 $’000 $’000 $’000

ASSETS Current assets Cash and cash equivalents 2,064,924 2,693,847 1,740,605 2,629,088 Trade and other receivables 321,133 208,057 241,854 186,684 Other current assets 37,383 51,745 24,795 44,847 Other investments 102,581 112,620 102,581 112,620 Inventories 13,541 10,361 8,089 7,984 Tax recoverable 37,245 – – – 2,576,807 3,076,630 2,117,924 2,981,223

Non-current assets Trade and other receivables – – 1,130,375 224,581 Other non-current assets 254 948 5,795 3,968 Property, plant and equipment 5,610,349 5,097,382 5,568,598 5,061,542 Intangible assets 5,037,716 – – – Investments in subsidiaries – – 257,967 257,965 Investments in associated companies and joint ventures 266,648 282,739 11,947 10,652 Investment property under development 1,117,766 792,708 – – Other investments 7,789 9,017 7,789 9,017 Deferred income tax assets 276,130 425 – – 12,316,652 6,183,219 6,982,471 5,567,725

Total assets 14,893,459 9,259,849 9,100,395 8,548,948

LIABILITIES Current liabilities Trade and other payables 1,014,995 995,942 746,622 875,394 Concession payable 425,444 – – – Loan and borrowings 134,087 – 90,000 – Income received in advance 17,711 17,708 13,208 17,810 Deferred income 15,343 5,862 4,311 4,311 Current income tax liabilities 200,038 241,168 197,652 239,150 1,807,618 1,260,680 1,051,793 1,136,665

Non-current liabilities Trade and other payables 152,897 148,040 145,362 130,361 Concession payable 3,069,314 – – – Loan and borrowings 1,197,819 684,228 – – Derivative financial instruments 2,674 4,520 – – Deferred income 154,103 88,723 84,412 88,723 Deferred income tax liabilities 72,492 36,931 72,218 36,412 4,649,299 962,442 301,992 255,496

Total liabilities 6,456,917 2,223,122 1,353,785 1,392,161

NET ASSETS 8,436,542 7,036,727 7,746,610 7,156,787

EQUITY Share capital and reserves 3,585,150 3,361,872 3,689,934 3,456,338 Retained profits 4,014,786 3,682,266 4,056,676 3,700,449 7,599,936 7,044,138 7,746,610 7,156,787 Non-controlling interests 836,606 (7,411) – – Total equity 8,436,542 7,036,727 7,746,610 7,156,787 84 CHANGI AIRPORT GROUP

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the financial year ended 31 March 2018

Hedging Currency Sinking Non- Share and other translation fund Retained controlling Total capital reserves reserve reserve profits interest equity $’000 $’000 $’000 $’000 $’000 $’000 $’000 2018 Beginning of financial year 3,280,387 10,656 (105,122) 175,951 3,682,266 (7,411) 7,036,727 Dividend paid – – – – (283,183) – (283,183) Sinking fund contribution – – – 233,596 (233,596) – – Capital contribution from non-controlling interest – – – – – 584,356 584,356 Acquisition of a subsidiary with non-controlling interest – – – – – 273,152 273,152 Total comprehensive income – 10,532 (20,850) – 849,299 (13,491) 825,490 End of financial year 3,280,387 21,188 (125,972) 409,547 4,014,786 836,606 8,436,542

2017 Beginning of financial year 3,280,387 10,821 (167,210) 85,460 3,384,526 (7,759) 6,586,225 Dividend paid – – – – (273,745) – (273,745) Sinking fund contribution – – – 90,491 (90,491) – – Capital contribution from non-controlling interest – – – – – 5,000 5,000 Total comprehensive income – (165) 62,088 – 661,976 (4,652) 719,247 End of financial year 3,280,387 10,656 (105,122) 175,951 3,682,266 (7,411) 7,036,727 ANNUAL REPORT 2017/18 85

CONSOLIDATED STATEMENT OF CASH FLOWS For the financial year ended 31 March 2018

2018 2017 $’000 $’000

Cash flows from operating activities Profit after tax 834,901 657,176 Adjustments for: – Income tax expense 173,858 179,064 – Depreciation of property, plant and equipment 344,016 304,060 – Amortisation of intangible assets 13,292 – – Government grant (21,809) (20,677) – Net loss on disposal of property, plant and equipment 1,290 202 – (Write back) / Impairment of investment in associated companies and joint ventures (13,012) 109,475 – Gain on remeasurement of previously held interest in an associated company (40,229) – – Foreign currency losses recycled on deemed disposal of previously held interest in an associated company 31,033 – – Bargain purchase on acquisition of a subsidiary – net (61,192) – – Impairment of trade and other receivables 1,103 2,737 – Share of results of associated companies and joint ventures 3,081 24,392 – Unrealised currency translation differences (1,213) 1,383 – Fair value loss on financial assets held at fair value 904 – – Amortisation of deferred income (5,862) (4,698) – Interest expense 57,524 265 – Interest income (43,675) (57,123) 1,274,010 1,196,256 Changes in working capital – Inventories (503) (7) – Trade and other receivables (15,493) (18,422) – Other assets 15,091 9,959 – Trade and other payables 128,129 22,667 Cash generated from operations 1,401,234 1,210,453

Interest received 62,640 49,930 Interest paid (26,608) (12,651) Government grant received 4,273 21,742 Income tax paid (193,903) (188,890) Net cash provided by operating activities 1,247,636 1,080,584

Cash flows from investing activities Additions to property, plant and equipment and capital work-in-progress (1,036,866) (1,429,028) Additions to investment property under development (282,798) (216,202) Additions to intangible assets (11,873) – Payment of concession liabilities (1,031,961) – Net cash acquired on acquisition of a subsidiary 114,823 – Proceeds from return of capital from a joint venture 7,581 – Proceeds from disposal of property, plant and equipment 56 314 Payment for investment in associated companies and joint ventures (193,821) (75,232) Dividend income received – 8,684 Purchase of financial assets at fair value through profit or loss (107,030) – Purchase of held-to-maturity financial assets (3,107) (6,768) Proceeds from held-to-maturity financial assets 120,500 30,750 Net cash used in investing activities (2,424,496) (1,687,482) 86 CHANGI AIRPORT GROUP

CONSOLIDATED STATEMENT OF CASH FLOWS For the financial year ended 31 March 2018

2018 2017 $’000 $’000

Cash flow from financing activities Proceeds from loan and borrowings, net of transactions costs 658,030 228,420 Repayment of loan and borrowings (411,956) – Capital contribution from non-controlling interest 584,356 5,000 Dividend paid to equity holder of the Company (283,183) (273,745) Net cash used in financing activities 547,247 (40,325)

Net decrease in cash and cash equivalents (629,613) (647,223) Cash and cash equivalents at beginning of financial year 2,693,847 3,338,023 Effects of currency translation on cash and cash equivalents 690 3,047 Cash and cash equivalents at end of financial year 2,064,924 2,693,847 ANNUAL REPORT 2017/18 87

LISTING OF SIGNIFICANT COMPANIES IN THE GROUP

Country of business/ Name of companies Principal activities incorporation Equity holding 2018 2017 % %

Significant subsidiaries

Held by the Company

Changi Airports Investment holding and provision of Singapore 100 100 International Pte. Ltd. (a) consultancy services in the field of civil aviation

Changi Travel Services Sale of travel and tour-related Singapore 100 100 Pte. Ltd. (a) products and packages

Jewel Changi Airport Investment holding Singapore 100 100 Holdings Pte. Ltd. (a)

Held by the Group

Changi Airport Provision of airport related Singapore 100 100 Consultants Pte. Ltd. (a) consultancy services

Changi Airport Planners Provision of professional engineering Singapore 100 100 and Engineers Pte. Ltd. (a) services in the field of civil aviation

Changi Airports Other investment holding Singapore 100 100 International Capital Pte. Ltd. (a)

Changi Airport Provision of airport management Saudi Arabia 100 100 Saudi Ltd. (b) and operations services

Rio de Janeiro Investment holding Brazil 100 40 Aeroporto S.A (c)

Concessionária Aeroporto Airport concessionaire Brazil 51 20.4 Rio de Janeiro S.A (c)

Jewel Changi Airport Provision of development, project, Singapore 51 51 Devt Pte Ltd (a) and real estate management services

Jewel Changi Airport Project development, operation and Singapore 51 51 Trust (a) management

Jewel Changi Airport Provision of trustee-management Singapore 51 51 Trustee Pte Ltd (a) services

CTS Southeast Asia Provision of travel related services Singapore 60 60 Pte. Ltd. (a) 88 CHANGI AIRPORT GROUP

LISTING OF SIGNIFICANT COMPANIES IN THE GROUP

Country of business/ Name of companies Principal activities incorporation Equity holding 2018 2017 % %

Significant associated companies and joint ventures

Held by the Company

Experia Events Pte Ltd (c) Organising and management of Singapore 20 20 conferences, exhibitions and other related activities

Held by the Group

Bengal Aerotropolis Development of airport and India 30.2 36.7 Projects Ltd (c) (d) township projects

Transport AMD-2 Ltd (c) Investment holding Cyprus 37.5 37.5

OJSC International Provision of airport and related Russia 37.5 37.5 Airport Sochi (c) services

OJSC International Provision of airport and related Russia 37.5 37.5 Airport Krasnodar (c) services

OJSC International Provision of airport and related Russia 37.5 37.5 Airport Anapa (c) services

Terminal Vladivostok (c) Provision of airport and related Russia 33.3 33.3 services

Vladivostok International Provision of airport and related Russia 17.4 17.4 Airport (c) services

(a) Audited by PricewaterhouseCoopers LLP, Singapore. (b) Audited by PricewaterhouseCoopers, Saudi Arabia. (c) Audited by other firms. (d) BAPL has obtained financing from a consortium of banks. As required in the financing agreement, a subsidiary of the Group has undertaken not to sell, assign or transfer its shareholding in BAPL without prior approval of the banks. Corporate Information

CHANGI AIRPORT GROUP (SINGAPORE) PTE. LTD.

60 Airport Boulevard #046-037-01 Changi Airport Terminal 2 Singapore 819643

MAILING ADDRESS

PO Box 168 Singapore Changi Airport Singapore 918146

Tel: +65 6595 6868

Email: [email protected] www.changiairportgroup.com

Company Registration No. 20091087N

Download this annual report online at www.changiairportgroup.com CHANGI AIRPORT GROUP ANNUAL REPORT 2017/18