A third runway has been approved for Hong Kong’s international airport. This, according to the airport, will help to meet the “surging growth in passengers and air cargo”. Indeed, in 2014, Hong Kong’s airport noted record passenger and cargo traffic, up by 5.8% and 6% year-on-year respectively.
However, the runway is coming at a hefty price estimated at $18.2bn. This includes the cost of reclaiming 1,600 acres of land from the sea in order to build the runway which is scheduled to open in 2023.
The plan has also raised a number of questions and concerns which the newspaper, South China Morning Post (SCMP), has recently posed. Among them is the busy airspace in the Pearl River Delta, which some deem too busy to accommodate more flights.
Other airports in this region have also undertaken expansion projects in recent years. For example, Shenzhen Bao’an International Airport’s Terminal 3 opened in 2013 and Guangzhou’s Baiyun International Airport opened a third runway just last month. While much of this expansion is due to passenger increases, these additions bode well for cargo opportunities.
According to the Association of Asia Pacific Airlines, cargo made a strong recovery in 2014 increasing by 5.4% from 2013. Airports are enjoying the improving cargo gains as well. Singapore’s airport noted a slight increase of 0.5% in 2014 from 2013, while South Korea’s Incheon airport reported a 4.9% gain and Tokyo’s Narita airport increased 5.3%.
Expansion plans are underway for some of these airports too. Singapore recently announced plans to spend $2.2bn on a passenger terminal. In 2013, South Korea’s Incheon Airport began a $4.6bn expansion to increase its passenger handling capacity by 41% and increase annual cargo capacity to 5.8m tonnes from 4.5m by 2017.
With all this expansion at airports planned and/or underway across Asia, just how much more can this region profitably handle? A former civil aviation department head noted to SCMP that Baiyun International Airport’s new runway had increased the airport’s traffic by only 10 flights per day because of a lack of airspace in the region.
One solution could lie in a 2011 MoU in which the five major airports in the Greater Pearl River Delta – Guangzhou, Hong Kong, Macau, Shenzhen and Zhuhai – agreed to strengthen cooperation and promote sustainable development of the airports in the region. But it seems not much progress has been made with this agreement. Perhaps the Hong Kong, Zhuhai and Macau Bridge will stimulate intermodal movement within the region when it opens in 2016 and stimulate more cooperation.
GLOBAL SUPPLY CHAIN INTELLIGENCE (GSCi)