Changi Airport's Operations Management: A Value Chain Analysis

This report provides an overview of the operations at Changi International Airport, focusing on both cargo and passenger handling, and its hub and spoke model. It highlights the airport's intermodal system, efficient road freight services, and the 'tech stop' paradigm shift. The report analyzes cargo and freight handling processes, including preparation, loading, unloading, and transshipment. It also examines the airport's value chain, anchored on operations, outbound logistics, and service, emphasizing flight scheduling, partnerships, and loyalty marketing. Milestones in airfreight operations and current enhancements in seat capacity, passenger load capacity, and infrastructure are discussed, noting the airport's shift towards a holistic approach combining aeronautical and non-aeronautical activities, with sustainability as an integral part of its core business. The report concludes by underscoring Changi's expansion efforts to cater to larger passenger flows, reinforcing its position as a leading global hub.

Running head: CHANGI INTERNATIONAL AIRPORT 1
Changi International Airport
Name
Institution

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Operations at Changi International Airline
Activities within The Changi International Airport cover both cargo and passengers handling.
Generally, the airport has both large and smaller aircraft to serve international as well as
domestic destinations respectively. Central to its operations is the hub and spoke model
which creates efficiency in the scheduling of flights, passengers, and cargo (Ashford, Stanton,
& Moore, 2013). Here at Changi airport, an intermodal hub and spoke system which provides
both seas to air and air to road services runs the system. This system has so far worked well
and blends well with a robust Road Freight Services connection with well managed national
roads networks connecting the airport. Again, this road network further helps in scheduling
air shipment, and during operations, transportation of all cargo occurs at the airway bill.
Custom’s clearance is, however, done at the warehouse of the feeder airports. This system is
efficient and has boosted the operations of Changi International Airport as it enables an
airfreight carrier on transit to sell services without landing. These nearby on transit airports
can then act as hubs for different airlines.
Initially, Changi airport only used to serve a large integrator but is currently having both a
large integrator and a dominant national carrier. This broadband service necessitated by the
Singapore’s government aimed at improvement of airport infrastructure, and further transfer
of most operations to private management (Visser, Hebly, & Wijnen, 2009). The performance
of the airport has since significantly improved.
The Changi airline has also employed an ingenious mechanism to promote its cargo services
by designing the airport as a “tech stop.” “This paradigm shift has changed the services
offered at the airports from the initial fueling, crew changes, and catering services to now
cargo transfer” (Price & Forrest, 2016). “Some of the factors favoring Changi International
Airport in this new venture is its strategic position along the major air routes, its affordable

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charges for fueling, crew accommodations as well as excellent aircraft maintenance
facilities.” Over the few years of its set up, these tech shops have immensely grown into hub
operations due to Singapore’s economic growth in the last 20 years.
Young and Wells (2014), further argues that a conducive regulatory environment for
international flights based on the charges levied, cost of cargo handling services, the
possibility of getting third-party services and airfield resources have significantly influenced
the effectiveness of the airport in cargo operations.
Cargo and Freight Handling
Like most international airlines, cargo handling at Changi International Airport entails the
initial preparation of cargo shipment, loading, and unloading of the aircraft, and the transfer
of cargo between the storage facilities and land transport. According to Georisk et al. (2011),
“preparation of outbound cargo, however, includes collection of cargo, assembly of air cargo
containers, inspection, and documentation. Sorting and preparation of inbound cargo majorly
focus on customs and other regulatory procedures and deconsolidation.” The airport also
handles cargo transshipment, and the operations are limited to unloading, reconsolidation,
and reloading or, in some instances, merely direct transfers from aircraft to aircraft.
In trying to shorten the time that cargos remain at the airport, Changi International Airport
has storage facilities, both bonded (imports and cargo on transshipment), cold rooms (for
short shelf life cargo), and X- ray scanners to inspect outbound cargo. The airport has open
warehouses with high ceilings and racks for storage of its cargo- most of which are of low
density. In Bitzan & In Peoples (2017), clarifies that the warehouse needs to be structurally
designed to accommodate rapid movement of goods to and from the trucks.
The value chain analysis of Changi International Airport

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The value chain of Changi International Airport is anchors on three pillars: Operations,
Outbound logistics, and Service. These three pillars have played a crucial role in setting
Changi International Airport apart from its competitors.
Operations: Major operations at the airport revolve around Ticketing and Flight Scheduling.
In its effort to have a competitive advantage, the airline has focused on employing more crew
than other airlines of the same caliber.
In Bitzan & In People (2017), explains that this approach does not only increase operational
efficiency but also ensures that the customers get more personal attention. And because
human beings have a natural desire to be loved and appreciated, this extra attention is in itself
a great marketing tool which has over the years branded Changi International Airport as a
preferred airline for most international travelers.
Outbound logistics: This area emphasizes flight connections and partnerships. In this regard,
the airport recently introduced a unique Non-Stop Business only service between Singapore
and New York City. This milestone has not only attracted more business executives in the
airline but has further created more comfort and efficiency for passengers on board.
Service: In improving its service delivery, the airline has embarked on pre and post- flight
services with a keen focus on Loyalty Marketing. To this end, the airline has put a significant
effort in ensuring that it retains its existing customers while further enticing new customers
through a compelling customer proposition. The approach has so far maintained a unique
brand image for the airline.
Milestones in Airfreights Operations and Current Enhancements
Abu-Taieh, El-Sheikh, & Jafari, (2012), state that the airline industry has come a long way
with significant technological advancements seen in the last decade. Changi airport freight
operations, for example, have made great strides with a recent analysis showing

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improvements in Seat Capacity, Passenger Load Capacity, Proper Aircraft Use, and Fleet
growth rate. The above improvements have balanced capacity supply and demand in freight
operations (Sople, 2012). There, have also been notable improvements in airplane production
capacity, and volume, runway capacity, air traffic management, airways, and control area
capacity, flow management, lift capacity, and terminal passenger and apron capacity. The
areas mentioned above have significantly improved the ability and efficiency in passenger
and cargo handling even in the backdrop of significant challenges. It is my conviction that
with the adoption of the four pillars of Operations Management; service delivery can only get
better.

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References
Abu-Taieh, E. M. O., El-Sheikh, A. A., & Jafari, M. (2012). Technology engineering and
management in aviation: Advancements and discoveries. Hershey, PA: Information
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Ashford, N. Stanton, & Moore, C. A. (2013). Airport operations. New York: McGraw Hill.
GeoRisk 2011, Phoon, K.-K., Puppala, A. J., Green, R. A., & Fenton, G. A. (2011). GeoRisk
2011: Geotechnical risk assessment and management: Proceedings of GeoRisk 2011,
June 26-28, 2011, Atlanta, Georgia. New York: American Society of Civil Engineers.
In Bitzan, J. D., & In Peoples, J. H. (2017). The economics of airport operations. Bingley,
UK. Published by Emerald Publishing.
Price, J. C., & Forrest, J. S. (2016). Practical airport operations, safety, and emergency
management: Protocols for today and the future. Amsterdam. Published in
Butterworth-Heinemann.
Sople, V. (2012). Supply chain management. New Delhi: Dorling Kindersley,India.
Visser, H., Hebly, S. & Wijnen, R. A. A. (2009). Management of the environmental impact at
airport operations. New York: Nova Science Publishers
Young, S. B., & Wells, A. (2014). Airport planning and management. New York: McGraw-
Hill.