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Hong Kong Enterprise - PRD Updates

Vol 4, 2003

Pearl River Delta Update

Hong Kong Still King of Regional Air Transport

Hong Kong Still King of Regional Air Transport

Hong Kong International Airport is expected to retain its position as an international aviation hub

Hong Kong International Airport at Chek Lap Kok will retain its position as an international hub despite the increasing development of aviation facilities in the greater Pearl River Delta (PRD) region.

Chek Lap Kok plays a crucial role in the Hong Kong economy as a gateway to the southern Chinese mainland, as well as a centre of regional and international aviation and logistics. Last year was described as the best ever in terms of growth, with air cargo up 19.6% to 2.48 million tonnes, passenger traffic reaching 34.32 million, up 3.8%, and aircraft movements increasing by 5% to 206,630.

As an air hub, the airport has so far signed air services agreements with 50 countries. Early March another carrier, Mekong Airlines, started scheduled flights between Hong Kong and Phnom Penh.

A study, Master Plan 2020, undertaken by the Airport Authority to plan for future growth, has projected an annual capacity demand of 97 million passengers and nine million tonnes of cargo.

Some enhancements have already been undertaken. These include the logistics park in north Lantau (for high-value and time-sensitive goods) and the marine cargo terminal (opened in 2001), which links the airport with 20 ports in the PRD region. A 24-hour SkyCity will generate more air traffic, better facilities for passengers and airport community and an increase in non-aviation revenue.

Under this concept, the plan envisions an office and retail development, international exhibition centre (a public-private joint venture), and a cross-boundary ferry terminal.

In mid-February, 25 luxury brand licences and 23 catering licences were awarded by the Airport Authority for the passenger terminal east hall. The main shopping area is being reconfigured to add 6,800 square metres of space.

Despite the emergence of several new airports in the region, additional facilities being built by major international air cargo carriers would also strengthen Hong Kong's position as a premier air express cargo airport in the greater PRD, according to a recent study entitled Hong Kong & the Pearl River Delta: the Economic Interaction.

As major airports in the region, including Guangzhou Baiyun Airport and Shenzhen Bao'an Airport, develop more air networks and sophisticated cargo handling capabilities, there is the potential for significant diversion of airfreight away from Hong Kong International Airport, the report notes. But it adds that neither Guangzhou, which aspires to be a hub for domestic travellers in the southern mainland, nor Chek Lap Kok (an international hub) will be able to displace each other.

The study points out that Guangzhou has been aggressively building its route network, extending "fifth freedom" rights to foreign carriers in an effort to become a major international hub connecting the southern mainland to Southeast Asia and beyond. "Although it is likely to make significant inroads, it seems unlikely to displace Hong Kong's position as an international hub,'' the report says.

Guangzhou's Baiyun Airport is designed ultimately to serve 80 million passengers and 2.5 million tonnes of cargo and has been "designated as one of the top three domestic hubs and international airports on the Chinese mainland (the others are in Beijing and Shanghai),'' the report says.

Citing Guangdong government authorities, the report says, "there will be 18 airports in Guangdong, Hong Kong, and Macau by the end of 2010. These will include the international airports in Guangzhou, Hong Kong, Macau, and Shenzhen, and five local airports. The Guangdong government estimates that international passenger traffic into and out of all the airports will reach 240 million from the present 50 million by 2010.''

It also observes that the potential impact of large express cargo carriers on air transport is also often overlooked.

"FedEx has single-handedly made its main US hub airport, in Memphis, the busiest air cargo airport in the world. Should FedEx receive sufficient air rights to turn Shenzhen into a real hub, it could shift the balance in the region. On the other hand, DHL's express cargo facility to be built in Hong Kong could also help to lock in Hong Kong's position as the leading air express cargo airport in the Greater Pearl River Delta region.''

The report also points out that the potential for air transport in the region, as well as competition between airports, will be strongly influenced by air service rights.

The 256-page research report is a comprehensive analysis undertaken to understand the nature of the economic interaction between Hong Kong and the PRD in terms of every industry and every jurisdiction. It also explores the future evolution of the economic interaction between Hong Kong and the PRD.


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