Non‑stop flights to emerging markets could boost economy, study says

Singapore could gain an annual increase of $200m in foreign direct investment.

Non-stop flights to fast-growing but under-connected markets could give the Singapore economy a healthy tailwind, government economists said.

In a study, the Ministry of Trade and Industry found that introducing non-stop flights to regions such as Latin America, Africa and Central Asia is expected to benefit the Republic by boosting investment and trade access.

Besides increasing direct investment inflows and outflows, better air connectivity also improves a city's status as a hub – with higher economic activity from serving more passenger and cargo transfers, and an improved volume of flight operations for airlines.

Singapore could thus benefit by serving as a key stop for goods and travellers on routes between emerging markets and South-east Asia and Oceania, the report's authors said.

They noted that Changi Airport – which aims to connect to 200 cities by the mid-2030s, up from 170 now – already has links to many advanced economies, but added that stronger links with "less well-connected and growing regions" may have significant economic payoff.

They calculated that Singapore could gain an annual increase of $200m in foreign direct investment, and an added $520m in direct investment abroad, just from axing a stopover to a similar-sized economy located within 7,500 kilometres (km).

Overall economic gains could also lead to wider effects such as higher productivity, employment and wages. Industries such as accommodation, retail, and logistics could also benefit, the report showed.

Shorter flight connections to cities that are more than 7,500 km away would generate more modest improvements in investment flows and visitor arrivals – a band that now includes SIA's daily non-stop A350-900ULR services to San Francisco, Los Angeles and New York, all of which previously required a stopover before the airline's ultra-long-haul fleet came online.

But their report warned that actually setting up these new air links would depend on factors such as the availability of aircraft and air traffic rights, and commercial viability for airlines.