History - Forward Thinking
Lee Kuan Yew, Singapore Minister Mentor
Singapore’s first flight took place in 1911. One hundred years later, the state is a global hub and home to that rarest of creatures: a profitable airline.
The mid-1960s to early 1970s was a crucial time on that journey. A young Singapore had not long separated from Malaysia but the two countries still ran an airline—Malaysia-Singapore Airlines (MSA)—together.
Internal arguments were beginning to surface, however. Malaysia was pushing for a strong domestic service, while Singapore favored international expansion. Then Prime Minister Lee Kuan Yew (now Minister Mentor) worried that many Malaysian destinations were uneconomical. Sharing in these losses wasn’t in Singapore’s interests and, besides, Minister Mentor Lee insisted that the airline should be run according to sound commercial principles. “Right from the beginning, management and union clearly understood that their survival depended on being profitable,” he said.
With a core group of airline board members, he began preparing for the inevitable. He asked airline management to start obtaining landing rights in foreign destinations, aware that when the time came, Singapore would need to embrace the competitive global arena to survive. Hong Kong, Tokyo, Sydney, Jakarta, and Bangkok were all added to the potential network.
In July 1972, MM Lee met with Singapore Airlines’ management and unions, and made it clear the country couldn’t afford to fly a flag simply for the sake of it. If there was to be a new airline it would have to survive on its own merits. Losses would inevitably lead to it being shut down.
MM Lee couldn’t resist assisting with one tough negotiation, however. He knew that getting a share of the lucrative London-Singapore-Sydney route would be crucial. But while British Airway’s forerunner BOAC was happily landing at Singapore, there was no reciprocal agreement. MM Lee decided to put pressure on the British Government through unions working on BOAC aircraft in Singapore. The go-slow got the attention of the High Commissioner, Arthur de la Mare. At a meeting, MM Lee told him that the current arrangement was unfair and asked for the right to serve the United Kingdom. His wish was granted within weeks.
Singapore Airlines (SIA) was launched in October 1972 but, for the Minister Mentor only half the job was done. A world-class airline needed a world-class hub. A consultant had recommended a second runway at the existing airport, Paya Lebar, even though it meant diverting a river and building on less than solid ground. It was the cheapest option and involved the least disruption to nearby communities.
The oil crisis in 1973 forced a rethink but a new consultancy backed the original assessment. MM Lee wasn’t convinced. He had flown over Boston Logan and noted that the noise footprint of aircraft was largely over water. Paya Lebar’s second runway would force air traffic right over the city. A new committee was appointed, which decided that a former air force base at Changi could be opened with one runway by 1980, with a second runway built by 1982.
Communist insurgency, particularly in Vietnam, was slowing down growth in the region and MM Lee worried that the time taken on development could slow growth even further. But despite the $1.2 billion (SGD1.5 billion) price tag he opted to go ahead with Changi and in so doing wrote off the $634 million (SGD800 million) tied up in Paya Lebar. He has called it the best investment he ever made. Changi opened in 1981 as Asia’s largest airport and has won close to 400 awards since.
Minister Mentor Lee’s vision for a liberal air transport policy and a carrier that adhered to free market principles was years ahead of its time. They remain critical issues in aviation today. His desire for leadership and change has also endured. SIA was the first airline to offer free headsets and drinks as well as a choice of meals in economy class, the first to fly a Boeing 747-400 commercially across the Pacific, and the first into service with the Airbus A380.
And MM Lee remains on hand to ensure that aviation’s contribution to the Singaporean economy—some 220,000 jobs and near 10% of GDP—is never forgotten. In 2004, when the pilot’s union voted out its leaders for agreeing a wage deal with management, he was quick to point out that the future of the airline, and of Singapore, should not be jeopardized.
“We have to think about tomorrow, the day after tomorrow, five years down the road, 10 years down the road,” he said. “I worried about it before SIA was formed, when it was part of Malaysian Airways in the 1960s, then Malaysia-Singapore Airlines. Every day, I spend part of my time looking at the future.”
Singapore Airlines and Changi have become role models for others to follow. Singapore is a small island that looks very big on an aviation map thanks to Minister Mentor Lee’s vision.