Operations at Changi Airport Terminal 2 will be suspended for 18 months from May 1, said Transport Minister Khaw Boon Wan on Monday.

"We will save on running costs - for the airport operator, retail tenants, airlines and ground handlers," Khaw said in Parliament, noting that one terminal is enough to handle the current traffic at the airport.

The escalating coronavirus outbreak has resulted in demand for air travel plunging, with Changi Airport severely affected.

"Importantly, it also allows us to speed up the current upgrading works at T2 and shorten the project time by up to one year," Khaw said.

With the suspension of T2 operations, airlines will be reallocated across the remaining terminals.

Singapore Airlines (SIA) will consolidate its operation in Terminal 3.

Read also: Man arrested in Changi for misusing boarding pass

Deputy Prime Minister Heng Swee Keat had said last month that the number of passengers arriving at the airport has fallen by more than 90 per cent since the Covid-19 outbreak.

Reduced demand arising from the outbreak and travel restrictions worldwide has also hit SIA hard, with the carrier cutting 96 per cent of its scheduled flights till end-April.

Khaw acknowledged the struggle that the aviation sector is going through now, but said that businesses must also prepare to capitalize on the opportunities available when the economy recovers.

"For example, Changi Airport has four terminals. Right now, one terminal is enough to handle the current volume of demand. We can close down one or two terminals. But we must think about post-pandemic recovery," he said.

"While full recovery this year is unlikely, partial recovery next year is probable. We must be ready to lead and to ride the recovery when it happens."

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