AFA - Aerospace Forum Asia

American Chamber of Commerce Leadership Series Luncheon
23 May 2005
Airport Authority Hong Kong (AAHK) Chief Executive Officer, Dr. David Pang
JW Marriot, Hong Kong
Reported by Liz Bosher

Hong Kong International Airport’s report card boasts lots of Gold Stars

In the first quarter of 2002 Hong Kong International Airport (HKIA) was ranked No. 6 in the world; by the end of the fourth quarter it had reached the No. 1 spot . . . since then it has never looked back. Addressing an AMCHAM luncheon supported by AFA and presenting, as he put it, his report card on the performance of the HKIA over the past four years, Airport Authority Hong Kong (AAHK) Chief Executive Officer, Dr. David Pang was able to showcase an impressive list of awards including Best Passenger Airport awards for the past five years and Cargo Airport of the Year in 2002 and 2003, to name but a few.
Pang made it clear, however, that the AAHK and its business partners have no intention of sitting back on their laurels. The new Guangzhou Baiyun International Airport is up and running, serving a rapidly expanding network of international passenger and cargo routes, as well as being a major domestic hub. Hong Kong must become an "insider" in terms of the Mainland China market, not an "outsider" he said; it must recognize that the HKIA will in future rely more and more on the rest of China to generate increased traffic while, at the same time, the rapid expansion of key Mainland hubs at Guangzhou, Shanghai and Beijing will mean that the Mainland is progressively less reliant on Hong Kong as an international gateway and transfer hub.

Pang went on to describe the many strategies which the AAHK is promoting to reach out to the passenger and cargo flows which will drive continuing expansion at HKIA. These include remote passenger check-in at cities in the Pearl River Delta (PRD), a growing network of bus and ferry links to South China cities and ports "with transfer passengers arriving by ferry at the HKIA SkyPier able to move directly to their connecting flights without having to undergo Hong Kong CIQ screening" and an air cargo consolidation centre in the PRD.

In a recent strategic initiative the AAHK has built its first "airbridge" to a Mainland Chinese city. By investing some CNY 1.9 billion in the Hangzhou Airport (Zhejiang) the AAHK aims to strengthen air links between the fast growing Pearl River and Yangtze River Delta economic regions. At the HKIA itself, plans include an update of the present Master Plan 2020 and investment in new infrastructure including the SkyPlaza, Exhibition Centre and SkyPier hotel projects already underway.

Pang characterized the vision of the AAHK going forward as one of "passion and ownership" underpinned by a series of strategic business objectives and a wholehearted commitment to providing the best possible experience for airport users. Amongst his key targets are to attract more airlines to HKIA, including a significant increase in the number of low fare carriers from the present 7 to 15. He wants to achieve hassle-free connectivity, enhance network penetration and expand the international network served from the Hong Kong hub. Accepting that costs to airport users have a crucial impact on competitive positioning he stressed that simplistic comparisons were often misleading. For example, a recent study on air cargo had determined that it is roughly HK$3 per kg cheaper to ship cargo out of HKIA than Guangzhou airport. Singapore Changi and HKIA raise roughly the same overall amount in total user charges, he said, the difference is that Singapore load a higher proportion of charges onto the passenger thus reducing the amount payable by airlines.

Looking longer term Pang said the establishment of Customs and Immigration pre-clearance procedures for international passengers transiting into the Mainland would be a top priority. He noted that this "invisible wall" between Hong Kong and the Mainland was the biggest disadvantage to growing air traffic connections between the two. At the moment we are doing our best to shoot holes in the wall, he said, but I will not be satisfied until we have effectively pulled it down.
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Liz Bosher is the Director General of Aerospace Forum Asia and was previously Director of Planning of the HKIA. Currently she is Managing Director of Landrum & Brown.