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A New Chapter for Airport City

The aviation industry has been undergoing solid recovery since Hong Kong emerged from the epidemic, with continuous resumption of flights and destinations and a sustained increase in passenger throughput. At present, about 110 airlines are operating flights between the Hong Kong International Airport (HKIA) and 165 destinations worldwide, recovering to about 75% of the pre-pandemic level. The daily passenger throughput and air traffic movements have recovered to 65% and 70% of the pre-pandemic levels respectively.

According to Airport Authority Hong Kong’s (AAHK) forecast, passenger volume at HKIA is expected to reach about 80% of the pre-pandemic level by the end of 2023, and see a full recovery in 2024. All in all, the current pace of recovery of our aviation industry is in line with our expectation.

There is an imminent need to address the current manpower shortage issue in the aviation industry in order to support its speedy and full recovery. While we continue to proactively provide training and facilitate local recruitment, we need to expedite the importation of labourers to address the pressing manpower demand. Under the first round of application of the Labour Importation Scheme for the Transport Sector - Aviation Industry, applications from 28 companies with a total quota of over 2 800 have been approved, covering 10 job types including Passenger Services Officer, Ramp Services Agent, Aircraft Maintenance Mechanic, etc. It is expected that these imported labourers will arrive in Hong Kong in October 2023 the soonest.

At the same time, we are pressing ahead with various development projects at HKIA and its surrounding areas. Projects including the Three-Runway System, large-scale integrated facilities, hotels, offices, logistics centres and transport infrastructure are being completed one after another. From “City Airport” to “Airport City”, Hong Kong’s development as an international aviation hub has entered a new era. We must ride the world’s trends and seize new opportunities such as (1) the new mode of “bridgehead economy”; (2) new opportunities arising from the growth of the Guangdong-Hong Kong-Macao Greater Bay Area (GBA); and (3) the paradigm shift in cargo logistics.

First, about the new mode of “bridgehead economy”. In recent years, the world’s leading airports have been transforming from passenger and cargo-carrying transportation facilities to hubs of economic activities, injecting impetus into the cities and regions in which they are located. With the support of the HKSAR Government, AAHK introduced in 2019 a strategic development blueprint to drive HKIA’s transformation, from a City Airport to an Airport City. Our airport will not only be a facility for the arrival, departure and transit of passengers, but also a commercial landmark and even a leisure resort comprising aviation and other economic functions. These will boost economic activities in the vicinity of the airport.

We are taking active steps to realise the Airport City vision, an important effort of which is the SKYCITY development project, which takes up 25 hectares of land. 11SKIES, the centerpiece of SKYCITY with a gross floor area of 3.8 million square feet, will stand as Hong Kong’s largest all-in-one commercial development, providing novel entertainment, retail and dining options as well as office buildings for accommodating medical, health care and financial services, etc. The adjacent AsiaWorld Expo will undergo Phase II expansion, the completion of which will provide an advanced arena with over 20 000 seats and more exhibition facilities. Apart from taking flights, passengers, when visiting HKIA in the future, may also experience brand-new indoor entertainment facilities, shopping spots, new dining concepts, and even undergo body checks and utilise storage facilities for precious artworks. SKYCITY will become an important tourist facility that will contribute to Hong Kong’s overall tourism economy.

Second, new opportunities arising from the growth of GBA. With a population of around 87 million and a per capita GDP of over US$22,000, GBA is a huge source of tourists and travellers. Before the pandemic, around 14 million passengers from other GBA cities travelled to the rest of the world via HKIA every year. The completion of such major cross-border infrastructure projects as the Guangzhou–Shenzhen–Hong Kong Express Rail Link and the Hong Kong-Zhuhai-Macao Bridge (HZMB) in recent years, has allowed HKIA to establish an interlocking and multilateral sea, land and air transportation network. Going forward, we will further enhance the inter-modal transport connections and operation, and give full play to Hong Kong’s role as an aviation hub in GBA. Hong Kong will serve as the prime gateway for Mainland and international passengers to travel to and from GBA.

The completion of the Three-Runway System by the end of next year will increase HKIA’s annual passenger handling capacity by around 50% to around 120 million. The SkyPier Terminal, which will come into operation shortly, will enable transit passengers to travel via HZMB to HKIA’s restricted area for direct boarding without the need to go through immigration clearance again in Hong Kong. We believe this facilitation measure will provide further incentives for passengers to choose HKIA while planning their trips.

At the same time, we will further expand HKIA’s city terminal network in Mainland cities from the current 19 terminals to 30. We will also continue to step up cooperation with Zhuhai Airport: from providing passenger link service between Hong Kong and Zhuhai to establishing a high-end aviation industrial cluster in the region, the two airports will achieve synergy that adds economic value to both cities.

Third, the new mode of cargo logistics in recent years. Online shopping has become a key mode of consumption around the globe, and a characteristic of e-commerce is that orders are small but come on great numbers, with a vast variety of goods at relatively high value. This new mode of commerce places emphasis on product quality, and is most suited for high-value products like fresh produce and pharmaceuticals. This presents a huge opportunity for the air cargo industry. In fact, Hong Kong’s air cargo throughput last year stood at 4.2 million tonnes, which only accounted for 2% of Hong Kong’s overall cargo throughput, but 48% of Hong Kong’s trade value. High-value and high-end aviation logistics is a market we must seize and for which we must continue to enhance our services.

On this, AAHK has in recent years partnered with different companies in constructing advanced logistics facilities and attaining international accreditations. These will enable Hong Kong to seize the growth opportunities stemming from modern high-end logistics services. For instance, AAHK cooperated with DHL on the expansion of the latter’s Central Asia Hub, which was commissioned in March 2023, with the capacity of its automated cargo handling system having significantly increased by 50% to 1.06 million tonnes per annum. The premium logistics centre being constructed and to be managed by a joint venture led by Cainiao Network will also be commissioned within this year, and will allow Hong Kong to handle an additional 1.7 million tonnes of air cargo volume. The Transit Mail Centre, dedicated to handling transit mail from the Mainland, will be completed by 2025.

In order to enhance the services and efficiency of air cargo logistics in GBA, AAHK is developing the new “sea-air intermodal cargo transshipment” mode with Dongguan, which allows security screening, palletisation and cargo acceptance procedures for Mainland export cargo to be completed in Dongguan in advance. The cargo will then be transported by sea to HKIA directly and then transshipped to overseas destinations. Such arrangement enables more efficient division of labour, and would lower operating cost by around half, and the time for loading and unloading by one-third. This will benefit all parties concerned and enhance the overall competitiveness of cargo logistics of GBA.

With the staunch support of our country as well as the concerted efforts of the HKSAR Government, AAHK and the trade, Hong Kong’s aviation industry will ride the world’s trend of commercial development and make greater achievements. Together, we will turn a bright new chapter for Hong Kong’s international aviation hub.

August 20, 2023