“We believe it can benefit customers because it is a much better, smarter way to do it,” Lee said, adding that this was particularly relevant to small businesses which struggle to manage their international supply chains, and do not have the budgets to buy expensive overseas shipping services.
Aviation, Land Transport and Communications Minister Ng Chee Meng said that Singapore has been actively pursuing export opportunities for Singapore’s air cargo sector.
“This deal is a great opportunity for SMEs to capture some of the growing demand for Singapore’s logistics and air freight services,” he added.
The deal involves various components of the air transport industry, including in-transit services. The deal also covers freight, baggage and cargo services to and from Singapore, and the operations and maintenance of Singapore’s existing freighter aircraft fleet.
Land Transport Authority CEO Somnath Puthanpurakkoon said that the deal was one of the initiatives launched by the Land Transport Authority to grow Singapore’s air freight business and improve the logistics services offered to businesses.
Airlift Singapore will provide the strategic framework for the management of the air cargo in-transit services, while the Land Transport Authority will provide safety oversight.
Freighter aircraft like the A350 were initially expected to enter service in 2010, but this has been delayed due to technical issues and business limitations.
The cargo capacity on the freighter aircraft would be able to carry cargo, as well as in-transit baggage and passengers, Mr Lee said.
In 2015, the Land Transport Authority upgraded its air freight operations at Seletar Airport, in part to meet the rising demand.
In July 2015, the Land Transport Authority announced that it was planning to upgrade Singapore’s freighter operations, and it currently operates two freighters.
Land Transport also announced the award of contracts worth $267.8 million to upgrade facilities at the Changi Airport Terminal 1 cargo handling centre.
“Over the last year, we have seen some small and medium-sized cargo operators go under,” Mr Lee said, referring to the loss of eight cargo and services firms since January 2015.
The freighter aircraft and other existing infrastructure would not be retrofitted, and the plan was to “develop new services, services that serve a different kind of client, a different kind of cargo”.
Mr Lee added: “We do see that the real value of the services are beyond the things that we have talked about in the news.”