His regular hangout? Changi Airport.

"The cafes and restaurants are very cheap. We go there to have coffee, chit chat and see people come and go," said Ali, 62, who brings his family to the airport on the eastern part of the island once a month.

At weekends, families mill around the food courts and children gawk at huge aquariums in the arrival halls as lovers and students steal some quiet time at the air-conditioned viewing galleries.

The gleaming airport has, along with Singapore Airlines, become a sort of national icon.

But despite winning local hearts, Changi may be losing ground as a hub of choice for international carriers as its Southeast Asian rivals fight for intra-regional flights and to become stopovers for long-haul flights between Australia and Europe.

Changi ranks fourth in Asia behind Tokyo, Hong Kong and Bangkok for passenger traffic and third for freight handled, preliminary 2001 statistics from Airports Council International show.

"It is very, very competitive out there and they know they are under pressure. Airlines are continually looking at their costs," Stephen Thompson, regional general manager for Southeast Asia at Qantas British Airways, told Reuters.

"Running an airport is no different from running an airline. They've got to make sure we are being well looked after and our customers are being looked after as well."

Changi, which serves 58 airlines flying to 138 cities, saw 28 million passengers pass through its two terminals last year.

REGIONAL RIVALRY

Malaysia, Singapore's closest neighbour, has upped the ante by planning to waive landing and parking fees for five years on new flights to Kuala Lumpur to turn its showpiece airport into a major hub for Southeast Asia.

The move is seen helping the ultra-modern but under-utilised Kuala Lumpur International Airport (KLIA) compete head-on with Changi and Bangkok's Don Muang.

Malaysia recently convinced Egypt Air to shift its operations from Singapore, which is expected to take place in July.

While costs are important, carriers said low fees were not sufficient on their own to justify relocating.

"When deciding on the feasibility of starting operations from a particular airport, airlines take into consideration factors such as traffic rights, yields and traffic demand of the routes," said a spokeswoman for German flag carrier Lufthansa.

Bangkok, seen as Singapore's closest competitor in terms of connectivity, is also building a second international airport which is due to open in 2004.

While some airlines say this could pose a threat to the city state, Stephen Chu, Emirates' area manager for Singapore and Brunei, said Changi remained his company's choice.

"The reason why we have made Changi into a hub for our operations is also because of the liberal aviation policies that Singapore has and the good connections from Singapore to other points," he said. "It's not just money matters."

CHANGI MOVES

Singapore is keenly aware of the pressure from regional rivals for a slice of its transport business, which extends to ports.

The city state has signalled its intentions to further liberalise the transport industry, which will include incentives to attract new airlines and entrench existing ones in the face of increased competition.

Albert Tjoeng, public relations manager at the Civil Aviation Authority of Singapore (CAAS), told Reuters it was aware charges must be reasonable and had offered a 10-percent rebate in landing fees last October after the September 11 attacks.

"This has brought our current landing fees to 1981 levels. We will closely monitor our charges and make adjustments whenever necessary to ensure that we remain competitive," he said.

Changi's new facilities would help differentiate it from its competitors and CAAS was working on expanding city links and flight frequencies, he added.

CAAS is spending S$1.5 billion ($833 million) to build Changi's third terminal, which will be able to handle another 20 million passengers per year when it is completed in 2006.

This will bring the airport's total capacity to 64 million.

In recent months, CAAS also sank S$1 million into developing the world's first airport game show and launched its business aviation lounge for private jets.

Chu from Emirates said Changi had consistently upgraded its facilities and that its pro-active approach in anticipating customer demands should stand it in good stead.

"As long as it keeps pace and tries to keep ahead of competition, it should be able to maintain itself as a hub for quite a few of the airlines," Chu said.

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