Too Many Cooks?

Competition is fierce among ground handling companies at Hong Kong International Airport.

These are tough times. The world recession is biting deep and plunging traffic figures are piling on the pressure for airlines, airports and suppliers alike, all of which already operate on thin margins.

Even the Asia-Pacific region is feeling the pinch. Set to become the biggest aviation market in 2010, in January 2009 the number of international passengers carried by members of the Association of Asia Pacific Airlines (AAPA) fell 7.8 percent to 11.4 million. Compared to the same month last year, load factors were down to 73.9 percent while freight ton kilometers dropped an astounding 23.6 percent.

“The operating environment remains extremely challenging,” says Andrew Herdman, AAPA director general. “The collapse in world trade is having a severe impact on air freight demand, forcing airlines to temporarily ground a number of dedicated freighter aircraft. Passenger travel demand is also weak, with premium traffic particularly hard hit as businesses seek to cut costs in response to the global economic downturn.”

Asia-Pacific is no stranger to such turmoil, having gone through the Asian Financial Crisis in the late 1990s and then SARs. Its battle-hardened nature is further strengthened by the intense competition in the area, with five-star hubs and carriers trying to gain market share against equally eminent rivals.

Indeed, the quality of airports in the region is such that most European or North American gateways feature way down on any honor roll. In 2008, the top four places in the Skytrax “World’s Best Airport” awards were Asian. Kuala Lumpur International Airport came fourth, Seoul Incheon International Airport was third, and Singapore Changi Airport ranked second. The winner, for the seventh time in eight years, was Hong Kong International Airport (HKIA).

Building for the future
Not that the airport is resting on its laurels. It has recently renovated its departure area in Terminal 1, increasing the number of security channels to enhance customer service. The project is part of a $4.5 billion program, which will also construct a new North Satellite concourse, a SkyPier ferry terminal and add new transfer desks, immigration counters and expanded baggage handling capabilities.

The bulk of the money, however, is being spent on the airfield. Ten new cargo stands have been built, there is a new fuel farm, the airport’s two runways have been resurfaced and two rapid exit taxiways are coming into operation.

Then there are the government-led infrastructural projects such as the Hong Kong-Zhuhai-Macao Bridge and Tuen Mun-Chek Lap Kok link. A feasibility study will assess the possibility of a rail connection between HKIA and Shenzhen Airport.

Beyond this, HKIA has appointed Maunsell Consultants Asia Ltd. as lead consultant for its Master Plan 2030, aimed at ensuring the airport keeps its place among the very best in the world. The study will make a comprehensive assessment of the airport’s operational requirements and constraints, in theory allowing HKIA to achieve the best possible balance between airport operations, aviation support and airport-related development.

“The plan will review and recommend the optimal airport layout and land-use development, including the possibility of building a third runway and its supporting facilities and infrastructures,” says Stanley Hui Hon-chung, chief executive officer of the Airport Authority.

The work should come in handy. Flying in the face of current trends, HKIA recorded a slight increase in passenger traffic in January 2009, although cargo was hit hard. Overall in 2008 it managed a 1.7 percent increase in passenger throughput and a 3.1 percent decline in cargo traffic as compared to 2007, reaching 48.6 million and 3.6 million tons, respectively. Air traffic movements grew 2 percent to 301,285.

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