Analysts are suggesting that Singapore's current Budget Terminal may be shifted to make way for a fourth terminal towards the end of this decade. Thanks to the ASEAN Open Skies agreement that is set to be in place by 2015, passenger traffic is expected to grow by over five per cent each year.

Changi Airport's existing three terminals can accommodate about 70 million passengers annually, and passenger traffic this year is likely to exceed last year's 42 million. So with greater passenger volume, Singapore will want to stay ahead of the curve and ensure the current terminals do not become saturated and over-crowded.

Although there is still substantial capacity still available at Terminal 3, there is going to be a need to expand the airport with the new terminal, given the increase in low cost travel and expansion of new discount carriers in the region.

Given the economic uncertainties, the remaining capacity is likely to be taken up once the ASEAN Open Skies agreement kicks in, in 2015. The agreement will fully liberalise air travel between the grouping's 10-member states. Growth could be anywhere between 5 and 10 per cent for the member countries depending on how they exploit the possibilities within the Open Skies Agreement.

The philosophy at Changi has always been to build ahead of demand and that applied to Terminal 3 as well. In March 2008, the Transport Ministry confirmed that Singapore will have a Terminal 4 at Changi Airport. This was mentioned in Parliament, just two months after the opening of Terminal 3 in January. Since then, authorities have been working on the master plan but little has been revealed about the details.

There have been talks that Terminal 4 is likely to be located on reclaimed land, along Changi Coast Road, near to runway three but there also exists the possibility of locating it where the current Budget Terminal is positioned. This would of course involved a relocation of the low cost terminal but so long as the new terminal is setup within the boundaries of Changi and its three terminals then there will be sufficient connectivity to keep the terminals within close proximity of one another.

If the Budget Terminal did make way for a fourth terminal then budget carriers would then likely have to shift their operations to Terminals 1 and 2.

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