HKIA risks losing large China cargo flows

The Hong Kong government and Hong Kong Airport Authority are putting forward two options for expansion of the airport. One is to maintain the two runways with a few extra add-ons, such as an expanded terminal area, but that is a plan that barely lasts nine years.


HKIA risks losing


HKIA risks losing large China cargo flows

The Hong Kong government and Hong Kong Airport Authority are putting forward two options for expansion of the airport. One is to maintain the two runways with a few extra add-ons, such as an expanded terminal area, but that is a plan that barely lasts nine years. The much more expensive option – estimated at HK$86 billion (US$11 billion) is to build the extra runway, which airlines and the business community say is the only way to keep up with the phenomenal growth of both passengers and cargo.

Speaking at the Transported Asset Protection Association (TAPA) annual conference in Hong Kong last month, Cheung highlighted the importance of cargo to HKIA. “Hong Kong is the busiest cargo airport in the world and we enjoy this status despite some inherent disadvantages,” such as the fact, “the vast majority of our cargo originates on the other side of the border, so logically it should be easier for shippers to use a mainland airport without having to cross customs and immigration into Hong Kong.” “And yet with this disadvantage we are able to capture such large volumes because of other factors,” he said pointing to capacity, connectivity and efficiency as the key drivers behind this. “In order to maintain this advantage we need to make sure these characteristics are maintained and enhanced moving forward, so if our capacity is exhausted we would run the risk of losing connectivity and without connectivity why would a cargo owner take the trouble of moving his cargo across the border and use our airport?” he said. Cheung also noted that the airport faces cost related challenges, particularly labour costs which are substantially higher than on the mainland which made it all the more important to maintain the airport’s existing advantages. “Cargo is a very important part of the airport business for us,” he emphasised. According to the Airport Authority, in the first quarter of 2011 passenger traffic reached 12.5 million passengers and cargo volumes rose to 944,000 tonnes. Aircraft movements jumped to 79,845, a 14 per cent increase on the previous year. Last year, HKIA overtook Memphis as the world’s largest air cargo hub, due primarily to exports from southern China’s Pearl River Delta, with a total cargo throughput of 4.1 million tonnes, 50.9 million passengers and over 300,000 aircraft movements. Cathay Pacific also became the world’s largest international air cargo carrier with total tonnage carried in 2010 amounting to 1.8 million tonnes – a rise of 18 per cent over 2009.