AFA - Aerospace Forum Asia

HKIA 2025 Summit
28 February 2006
Reported by Liz Bosher

HKIA 2025 Summit
Hosted by Airport Authority Hong Kong

Multi-award winning Hong Kong International Airport is updating its vision for the future. As part of the process, Airport Authority Hong Kong hosted some 200 aviation industry leaders, from Hong Kong, Mainland China and the wider Asia Pacific Region to a half-day symposium on 28 February 2006. Branded as the HKIA 2025 Summit, the event was held in the recently opened AsiaWorld-Expo - Hong Kong’s new state-of-the-art exhibition and performance venue, located at HKIA Sky City.

AAHK Chairman, Dr. Victor Fung, opened proceedings, setting the scene for keynote speaker Mr. Gao Hongfeng, Vice Minister of the Civil Aviation Administration of China, who delivered a memorable and comprehensive assessment of the present status of civil aviation in China and prospects for the future. Highlights of his speech included:

A nearly 40% growth in the number of registered civil aircraft in Mainland China (from 527 to 863) since 2000 and anticipated further fleet expansion to 1580 by 2010;
Growth in the number of civil commercial airports in Mainland China from the current 142 to 186 with 140 billion RMB expenditure planned on airport construction and upgrading in the 11th Five Year Plan;
Opening up of more traffic rights to bilateral aviation partners and relaxation of restrictions on foreign investment and management control in China’s aviation industry;
China’s domestic air traffic expected to grow at an average annual rate of 11% between 2011 and 2020;
Expectation that, by 2020, three Mainland Chinese airlines will rank among the top 10 world airlines by operating revenue;
Recognition of the important role of HKIA as a gateway to southern China and the reputation it has earned for excellence in operating and service standards.

Gao’s address was followed by two well-rounded panel discussions. Panel 1 tackled the topic of “China in 2025? reviewing the big picture as regards prospects for economic, tourism and aviation growth in Asia Pacific in general and Greater China in particular. Investment banker: Dr. Kenneth Courtis and economists Dr. Wang Yiming and Professor Richard Y. C. Wong shared bullish expectations for the growth and commercial success of Asia’s airlines and airports, founded in large part on the two emerging economic giants of the 21st century: China and India. Closer to home, Hong Kong’s economic future was seen to be connected intrinsically to that of the pan Pearl River Delta region with the consequent need to improve land transport connections and people flows in support of HKIA’s southern gateway/hub role.

This broadly optimistic consensus was tempered by long term concerns on the supply and cost of energy to national economies as well as specifically to the aviation industry, the need for strong leadership in the region and the need to address the impacts of differing demographic change in the various economies. Dr. Courtis stressed the importance of a balanced international response to the rise of China as a major global economic power. Dr. Wang said that China needs to become more innovative in technological development.

The second panel discussion brought together a broad and stimulating mix of top level airline and airport executives to discuss the topic of “Aviation in 2025? President & CEO of Incheon International Airport, Jaehee Lee, underpinned the importance of competition by making clear his vision to establish IIA as the biggest and best gateway/hub airport in Asia, building on a strong sense of airport identity and a commitment to the provision of cutting edge technology, facilities and services.

President of Fedex Asia Pacific, David Cunningham, envisioned Asia as the epicentre of a huge growth in the movement of air cargo, driven primarily by flows of goods from countries of manufacture to countries of consumption. He foresaw particularly robust growth in inter-Asian cargo traffic, which he predicted would grow at twice the rate of GDP and urged that infrastructure development and deregulation keep pace with the needs of the industry.

President of Air China, Ma Xulun drew attention to the challenges to legacy carriers posed by the emergence of the low fare airlines and the need to open markets in an orderly way. In his pithy, at times irreverent, remarks Sydney Airport CEO Max Moore-Wilton pronounced the “one-size-fits-all?approach to airport development outmoded. He was clear that in the 21st century, the Asia Pacific, rather than the US, would provide the model and impetus for growth of aviation, albeit sharing the common challenge of potential pressure on hub airports to prevent leakage of traffic to point-to-point service airports.

Cathay Pacific CE, Philip Chen rounded out the discussion with a home carrier perspective on the importance of continuing to build HKIA as a hub, underpinned by the growing networks of the locally based airlines. He predicted continued strong growth in the regional flying population whilst stressing the importance of a fair balance of opportunity with partner economies and “reasonably priced?infrastructure.

A lively Q & A session drew out panel members on concerns about the ability to grow the industry safely as well as quickly. There was a common appreciation of the need to focus on training and human resource requirements; Ma Xulun said that Air China would look to recruit foreign pilots in the near term, as well as working closely with training institutions. David Cunningham made a strong plea to replace the Chicago Convention with a multi-lateral policy commitment to move towards genuine deregulation of air services. Max Moore-Wilton reiterated the importance of a level playing field for both airlines and airports. He argued that privatization provides a healthy safeguard against wasteful expenditure and that, at the end of the day, the weak should be allowed to go the wall rather than being sheltered by government protection in one shape or form. In response to a final question from Aerospace Forum Asia President, Martin Craigs, all panellists endorsed the need to raise the status and image of careers in aviation to attract the best possible talent to the industry.

In his concluding presentation to the Summit AAHK CEO, Dr. David Pang, said it was vital to envision HKIA, not as being on the periphery of Mainland China, but as one of a number of key international gateway/hubs in and serving China and drawing on a strong “home?market of 50 million inhabitants in the pan PRD region. With this in mind all options must be kept in play, including the need to grow the capacity of the airport to as high as 100 million passengers per annum. In so doing, it would be vital to achieve better integration with the PRD, both in terms of ground level connectivity and airspace coordination. In the longer term, issues such as the possible need for a third runway should be considered in the context of regional runway capacity requirements.

The final verdict? China and the wider Asia Pacific region will drive aviation growth in the 21st century. As a first class airport “in the right place at the right time?HKIA can look with confidence to its new 2025 planning horizon.

Liz Bosher is the Director General of Aerospace Forum Asia and was previously Director of Planning of the HKIA. Currently she is Managing Director/Asia Pacific of Landrum & Brown.