No delay in expanding airport into a three-runway system

To meet future air traffic demand, Airport Authority Hong Kong (the AA) has proposed to
expand Hong Kong International Airport (HKIA) into a three-runway system. The statutory
Environmental Impact Assessment Report on the project is now available for public
inspection.

Recently, there have been questions about whether Hong Kong needs a third runway.
Historically, air traffic growth has always been closely associated with economic
development. As Hong Kong is a free and open economy, this connection is even stronger.
If the airport is not developed into a three-runway system, Hong Kongs position as an
international and regional aviation hub, as well as its overall competitiveness, will be
severely undermined.

Those who believe Hong Kong only needs two runways argue that London Heathrow
Airports two-runway operations allow the airport to maximise the value of the runways
without affecting its competitiveness. However, this observation is not based on fact. The
reality is that as Heathrow had reached its maximum handling capacity, the number of
destinations the airport serves has dropped 12% over the last decade, while two of
Europes other major aviation hubs, Amsterdams Schiphol Airport and Paris Charles de
Gaulle Airport, have increased their destinations by 15% and 8% respectively. It is obvious
that the importance of London Heathrow as a European and international aviation hub has
declined, and this has caused the UK an estimated loss of GBP14 billion a year in terms of
value of trade1. This amply demonstrates the importance of an airports capacity to the
sustainable development of its local economy. Do we want Hong Kong to follow in Londons
footsteps and give away our hard-earned aviation hub status?

Some also argue that HKIAs current two runways should be able to accommodate 87
million passengers annually, a projection published in the New Airport Master Plan (NAMP)
issued in 1992. This argument ignores the fact that prudent planning means responding to
market changes in a timely manner. Aviation is a global industry that has evolved
considerably over the last 20 years. We have seen advances and changes in aircraft
technology and type, development of air network, and leisure and business travel trends. If
1
One Hub or None, Frontier Economics (November 2012)

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we planned our airport facilities and systems based on assumptions made some 20 years
ago, then we would have lagged significantly behind market demands. To ensure that we
have properly incorporated current market developments into our planning, the AA reviews
and updates HKIAs 20-year master plan every five years to make timely adjustments to the
airports development and maintain Hong Kongs long-term competitiveness as an aviation
centre.

Finally, there have been suggestions to turn HKIA into a boutique airport so that it will not
need any further expansions for the next few decades. However, this would defeat HKIAs
mission to serve all travellers and provide them with an extensive air network including,
most importantly, the people of Hong Kong. Air transport services should not be biased
toward the minority of the population who can afford boutique services.

Since HKIA began its two-runway operations, air traffic volumes have been hitting new
records time and again, making Hong Kong one of the worlds busiest aviation hubs. In
terms of passenger throughput and volume of cargo carried per aircraft, HKIA is currently
the worlds most efficient airport*. This achievement is the result of the governments
resolute decision to expand by building a new airport at Chek Lap Kok. The latest
predictions by international air traffic expert IATA Consulting indicate that by 2030, HKIAs
passenger throughput will reach 100 million, its cargo volume will grow to almost 9 million
tonnes and its flight movements will hit 607,000.

Imagine if Hong Kong were still using the single-runway Kai Tak Airport. Would the people
of Hong Kong be able to travel all over the world for their holidays, choosing from over 180
destinations served by more than 100 airlines? Would business travellers be able to enjoy
the convenience of frequent air services and select the flight most suited to their schedule?

The bottleneck of an airports capacity lies in its runway capacity, not in ground facilities
such as terminal building. Today, HKIA handles an average of over 1,050 flights each day,
very close to its two runways practical maximum capacity of 1,200 aircraft movements. If
HKIA does not expand into a three-runway system, it will not be able to increase its daily
flight movements to meet air traffic demand. The result will be a shrink in its aviation
network, with fewer direct-flight destinations and frequencies. There will also be less room
for new airlines (such as low-cost airlines) to operate in Hong Kong. As a result of the
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shortfall in supply, airfares will go up, and service standards will inevitably decline. Both the
people of Hong Kong and travellers from around the world will suffer. In the long term, Hong
Kongs advantage as an international aviation hub will be weakened, and our economy and
employment market will be undermined. In addition to the damage caused to our aviation
and tourism industries, the competitiveness of Hong Kong being a centre of financial
services, trade and logistics will fall behind neighbouring cities.

HKIA owes its successes to the dedication and hard work of the people of Hong Kong.
Likewise, we should nurture and treasure this valuable asset by making the right decision,
one that will secure the sustainable development of Hong Kong.

Julia Yan
General Manager, Strategic Planning & Development
Airport Authority Hong Kong

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Appendix: Twelve most efficient airports in the world (calculated in workload unit per flight
movement)
Rank Airport Workload unit/ Total Total Total flight
flight movement passenger cargo movement
ranking ranking ranking
1 Hong Kong (HKG) 267.2 12 1 32
2 Tokyo Narita (NRT) 251.4 42 10 87
3 Incheon (ICN) 248.4 29 5 64
4 Taipei (TPE) 241.5 54 15 102
5 Dubai (DXB) 233.8 10 6 35
6 Singapore (SIN) 212.7 15 12 37
7 Bangkok (BKK) 209.8 14 18 40
8 Shanghai Pudong 205.3 21 3 33
(PVG)
9 Tokyo Haneda 194.0 4 23 24
(HND)
10 Osaka (KIX) 188.2 99 29 177
11 Krasnodar (KRR) 185.6 370 1,227# 839
12 London (LHR) 180.1 3 16 12

One workload unit = One passenger or 100kg of cargo

Source: International Air Transport Association Report on Annual Traffic Volumes 2012
#
no cargo throughput in this airport