Difficult days
The recent images of travellers in Mexico’s airports wearing medical masks due to the swine flu outbreak must have brought back bad memories for Hong Kong International Airport (HKIA).
For during the SARS pandemic back in 2003, the airport and its biggest customer – Cathay Pacific – took a massive knock in terms of passenger numbers.
Now, while HKIA is in a relatively good position regarding the latest flu scare due to its previous experience of dealing with SARS, it is battling plummeting cargo and passenger numbers for a very different reason – the global economic crisis.
The recession has hit HKIA hard, with first quarter results for 2009 showing year-on-year decreases in passenger throughput, cargo volume and aircraft movements of 7.1%, 22.8% and 6.6% respectively.
While the negative figures keep coming on a monthly basis, the good news is that the Centre for Asia Pacific Aviation (CAPA) believes that cargo volumes are likely to have bottomed out in January when HKIA registered a 28.9% drop in cargo volume.
This must be some small comfort for the mega-hub, but CAPA warns that a slow recovery lies ahead for Hong Kong’s freight operators. HKIA’s CEO, Stanley Hui, understandably hopes that HKIA should start to see some recovery soon.
“While the duration or full impact of the current recession remains to be seen, we are confident that its impact on traffic at HKIA will gradually lessen and the long-term prospect for HKIA stays positive,” says Hui.
In the face of such a dramatic downturn, Airport Authority Hong Kong launched a HK$450 million relief package in April to assist airlines and other operators at the airport.
This comprised $200 million worth of reductions in charges and $250 million in interest-free, deferred payments. At the heart of the relief package is a 10% reduction in landing and parking charges until the end of 2009, amounting to savings of about HK$200 million.
In addition to this, 50% of rental payments for airline lounges, office premises, counters and storage can be deferred for up to one year and repaid by interest-free instalments from April 2010 onwards.
“The reduction of both landing and parking fees will help airlines at HKIA reduce operating costs. Meanwhile, the ability to defer rental payments will help our business partners deal with liquidity issues in a troubled operating environment.
We hope the relief measures will help airlines better able to maintain their flight schedules at HKIA in support of our efforts to maintain HKIA as a regional and international aviation centre,” states Hui.
Cathay Pacific is among HKIA’s airlines that have applauded these efforts.
“As the biggest airline operator at Hong Kong International Airport, we appreciate all the savings we can get from the airport authority and our other suppliers.
It is essential for airlines and the airport to work closely together, especially in these challenging times, to underpin the competitiveness of the Hong Kong aviation hub,” says Cathay Pacific chief executive, Tony Tyler.
Cathay Pacific itself has also taken dramatic steps to reduce costs, including introducing a special leave package and slashing its long-haul route network.
Under the plans, all Cathay and Dragonair staff must take between one and four weeks unpaid leave in the next year, with senior staff having to take more time off.
Plus, there has been a reduction in either frequencies or seat capacity to: London; Paris; Frankfurt; Sydney; Singapore; Bangkok; Seoul; Taipei; Tokyo; Mumbai and Dubai.
On the cargo side, there will be an 11% reduction in cargo capacity and the weekly freighter frequency will fall to 84 flights, down from 124 per week during the 2008 peak.
Meanwhile, sister airline Dragonair, with its extensive network in Mainland China and Asia-Pacific, will also see a 13% cut in capacity.
Services to Fukuoka, Dalian, Shenyang, Guilin and Xian will be suspended while flights to Bangalore, Busan, Sanya and Shanghai will be reduced.
These dramatic announcements come on the back of successive declines in visitor and cargo volumes.
According to Hong Kong International Airport, March visitor traffic to and from Hong Kong dropped 9% with both long-haul markets such as North America and Europe and regional markets, including North Asia and Taiwan, being hardest hit.
If that wasn’t enough, the cargo side in March continued to record double-digit decreases for cargo throughput, resulting in HKIA’s export tonnage being reduced by approximately 25% as key markets (including North America, South East Asia and Taiwan) registered a significant yearly decline of over 30%.
Imports also dropped around 17% while transhipments fell around 9% year-on-year.
These figures are echoed by Hong Kong Air Cargo Terminals Limited (Hactl), which reports that cumulative tonnage for the first quarter was down 24.7% compared with the same period in 2008.
According to Hactl, for the first quarter, export to China showed a 38.4% decline, while USA and Europe saw declines of 29% and 28.9% respectively.
Similarly, cumulative import tonnage for the first quarter was down 24.8% against the same period last year, while imports from China, USA and Europe declined 24.7%, 21.2% and 24.8% respectively.
There was some light in these bleak figures from Hactl, with transhipment volume for March recording a relatively mild decrease of 6.7% year-on-year and total transhipment volume for the first quarter was down 14.2% year-on-year.
“The March figures came as a minor relief, compared with the sharp tonnage declines registered in the previous months, but the market outlook remains grim for the rest of 2009 as the global trade market will need more time to recover,” comments Lillian Chan, general manager of marketing and customer service.
Dragonair CEO, Kenny Tang, is forthright on the situation facing Hong Kong.
“The cargo market has been shrinking fast, with significant negative growth in cargo tonnage over the past few months recorded at Hong Kong,” he says.
“As the recession bites and consumers buy fewer electronics and mobile phones, the fall in tonnage volumes will be much more pronounced,” he adds.
Looking back on the past year, Tang comments that 2008 ended up looking bleak, with traditional peaks not happening.
“The last quarter of the year is usually the peak period, but in 2008 the peak simply did not arrive.
The primary focus for Dragonair now is to ensure that our service, assets and infrastructure are adjusted to reflect new economic realities, and that this is done in a way that allows us to grow rapidly again when the market rebounds.”
Part of this infrastructure adjustment includes Cathay Pacific Services Limited signing a supplemental agreement with the Airport Authority of Hong Kong in late 2008 to defer the completion of its new cargo terminal by a maximum of 24 months to mid- 2013.
At that time, Cathay Pacific stressed that it was committed to building and operating the third cargo terminal, but that this was necessary in response to current market conditions.
Only time will tell if this facility gets deferred again.
While the challenges facing the Cathay Pacific Group and Hong Kong aviation in general are clear, Tang believes that being part of such a major group along with its partners (Dragonair is an associate member of oneworld) brings many benefits during these uncertain times.
“We have introduced nine new regional destinations since joining the group and provide seamless connections between Dragonair’s extensive Mainland network and Cathay Pacific’s international network,” he says.
With the recently announced network adjustments, Dragonair now serves 16 destinations in Mainland China and 29 in the Asia-Pacific region from Hong Kong.
In these turbulent times, everyone involved in aviation at Hong Kong must surely agree that working together with partners and associates is the only way to see out the storm.
And when it passes, Hong Kong should be well placed to once again prosper.
Tang, for one, is certain of this. “We are optimistic about the future of aviation in Asia.
In the long-term there is no better place to be,” he concludes.
Asia-Pacific Airports 2009 Issue 2
A top asset
Dr Jonathan Beard and Wai-Duen Lee of GHK Consulting consider Hong Kong’s cargo advantages.
Hong Kong International Airport (HKG) is the busiest international cargo airport in the world, handling 3.6 million tonnes in 2008, the vast majority of which is transfer shipments that could potentially be transported via a host of other gateways.
The reason they don’t, for now, is in no small part due to Hong Kong’s never-ending quest to enhance its competitiveness, both during boom times and during the current sharp decline in cargo volumes.
But make no mistake about it, HKG faces a stern challenge ahead if it is to hold on to its lofty position in the coming years, with possibly the greatest threat coming from Mainland China gateways.
Mainland China is Hong Kong’s critical market – an estimated twothirds of all cargo handled at HKG being transfer shipments that either originated in China and are destined for onward shipment elsewhere or are bound for the mainland having arrived from overseas.
About 15% of this cargo has a Taiwan origin/destination.
Air-to-air shipments account for about 20% of the total, with Mainland China accounting for about 25% of this air-to-air transhipment and Taiwan for around 15%.
Origin and destination (O&D) consignments make up only 15% of the airfreight handled in Hong Kong.
HKG’s success has been built around high flight connectivity, streamlined customs, reliable and efficient cargo consolidation and handling and, of course, the free-port status of Hong Kong.
The territory’s proximity to the booming manufacturing economy of the Pearl River Delta (PRD) has presented the airport with an unparalleled opportunity that it has been quick to grasp.
Since the opening of the new airport in 1998 when throughput was 1.6 million, HKG has enjoyed a compound annual growth rate (CAGR) of 8.3%.
However, this turned down sharply towards the end of 2008, and in the first quarter of 2009 international cargo volume declined by 22.8%.
It was not alone in its suffering, however, as most other major Asia- Pacific airports reported first quarter downturns, and its key competitors in the south China hinterland even reporting declines of up to 30%.
The driving forces and competitiveness benchmarks for the inter-modal and air-to-air transhipment markets overlap but are not entirely the same; fortunately, HKG is well positioned to compete in both.
When it comes to neighbouring international airports in the PRD – Guangzhou (CAN), Shenzhen (SZX), and Macau (MFM) – HKG’s competitiveness is key, as it is one of the most dynamic air and sea cargo markets in the world.
Rather than relying purely on trend based forecasts of cargo throughput, the core of our consultancy work at GHK has focused on analysing the logistics flow of cargo and the development of Least Cost Routing Models (LCRM) – an approach that has stood the test over several assignments for Hong Kong’s airport.
In making routing decisions, total through costs – ‘point to point’ – are the key issue.
These include a number of components, some readily revealed through market prices, such as air-freight rates and airport handling charges (what GHK terms ‘tangible’ costs) others are more ‘intangible’, such as flight frequency, number of destinations, customs efficiency, security, etc.
The key question explored in GHK’s analysis of the PRD inter-modal market, is how these costs may alter over time in terms of tangible costs, but more importantly in terms of intangible costs.
Although handling costs at HKG and trucking costs to/from the airport may be higher than other PRD airports, they only contribute to a small (less than 10%) portion of overall tangible costs.
On the other hand, air-freightage between HKG and a non-Mainland destination is often much lower than that from other PRD airports, making HKG substantially cheaper to use.
Therefore, on tangible costs alone HKG is still competitive, although the difference is not significant and certainly not when ‘intangible’ costs are brought into the assessment.
Compared to other PRD airports, HKG enjoys a clear advantage in terms of a greater number of operating airlines and non-Mainland China destinations.
High connectivity and choice of carriers help keep down the tangible costs of using HKG through competition, but more importantly, superior connectivity, and Hong Kong’s streamlined and flexible customs are the key components of its intangible cost advantage.
For example, freight forwarders at HKG can consolidate smaller shipments from various shippers under the same master airway bill, and through optimising the mix of weight and volume, average freightage costs can be reduced.
The cut-off time required at HKG is also much shorter and a few hours saving for time-sensitive air cargo can be critical.
The flexibility offered when routing shipments via HKG is highly valued by freight forwarders and shippers, creating a virtuous circle where forwarders choose to undertake consolidation in Hong Kong, hence pulling more cargo to HKG and in turn more forwarding activity.
Conversely, at other PRD airports, various Mainland customs regulations limit consolidation activity.
Other factors also come into play, but the net result is that HKG’s overall intangible advantage is more than eight times that of the second largest PRD airport, Guangzhou.
This currently swamps any advantage or disadvantage on tangible costs. Hong Kong has also been keen to increase its air-to-air transhipment.
For this market, HKG’s hinterland is less easy to delineate and extends to several continents.
Its competitors include a wider range of airports in the Asia-Pacific region and further afield, notably Shanghai Pudong (PVG); Seoul Incheon (ICN); Tokyo Narita (NRT); Singapore (SIN); Bangkok (BKK); and even Dubai (DXB).
HKG’s transhipment does not only compete with other airports for their transfer cargo (a Mainland China–US cargo can be transhipped at either HKG or ICN, for instance), but also with its competitors’ own O&D cargo.
For example, a Shanghai–US cargo can either be shipped as O&D via PVG, or transhipped at HKG.
Key determining factors for the airport’s competitiveness in the air-to-air transhipment market are mainly intangible.
Save for airport location, these intangible factors include flight coverage and frequency, competitiveness of the home-base carrier, and the traffic rights regime.
Tangible costs are relatively difficult to discern as they are often absorbed in the overall freightage.
HKG is en-route for several major trade corridors (Mainland China- US; Mainland China-Europe; Mainland China-Taiwan; Southeast Asia- US; and Europe-Australia), and is well positioned to capture market share on these routes. The excellent connectivity at HKG and the substantial base-load of O&D cargo help support competitiveness.
Hong Kong International Airport also benefits from having a large and highly competitive home-base carrier, Cathay Pacific (including Dragonair).
However, compared with some of its leading international competitors, HKG’s trade regulations are more restrictive, with permits required for transhipping a number of commodities.
Its air service regime is also less liberal; although improving, fifth freedom is granted to only a handful of countries.
Not surprisingly, considerable attention has been focused on how to alleviate these regulatory restrictions and hence enhance HKG’s competitiveness in the air-to-air transhipment market.
HKG is not standing still, but neither are its competitors. Although HKG is still highly competitive as a gateway airport for O&D cargo in South China, its competitive advantages are quickly eroding.
In 2003, GHK calculated HKG’s intangible advantage in this market to be more than 30 times that of CAN’s. Nevertheless, the gap has quickly narrowed coming down to a factor of eight by 2007 (See graph).
As with other Mainland logistics centres, both CAN and SZX are pursuing aggressive plans, including infrastructure development and incentives to attract carriers, especially global integrators.
Both FedEx (at CAN) and UPS (with a smaller hub at SZX) received significant sweeteners to set up shop at the respective airports. Although the impacts are yet to be seen, the potential challenges from these neighbouring airports cannot be underestimated.
In addition, since 2008, direct shipment between Mainland China and Taiwan has been allowed, reducing the need to route via Hong Kong.
It is possible that as much as 300,000 to 500,000 tonnes of Taiwan-related cargo could be drained from HKG to other Mainland airports.
Enhancing HKG’s competitiveness for both inter-modal and airto- air transhipment is clearly critical for the continuing success and growth for the airport.
Hong Kong’s aviation logistics community has seen how rapidly the dominance of Hong Kong’s container port was eroded by the neighbouring terminals in Shenzhen, and has been keen to avoid the same fate.
A number of measures have been implemented or are in the pipeline, including: enhancing air connectivity through further liberalisation of air services; improving surface connectivity by ongoing streamlining of customs procedures and early commissioning of new infrastructure projects that link up the airport to its O&D hinterland, and the improved facilitation of trade by streamlining regulations (reform or abolition of Trade Declaration Charge, and reducing the requirements for additional and unnecessary licenses for transhipments, for example).
Competitiveness is always a relative measure; whilst the market downturn has hit HKG hard, it has also savaged the cargo throughput at some of its closest competitors and their respective home base carriers, indicating that at least in the short-term, HKG has performed relatively less badly and hence its competitiveness likely been strengthened.
Over the longer-term, it is inevitable that the ‘HKG advantage’ will diminish or even vanish, but by that stage the South China economy – encompassing over 90 million people – will likely be of such a size that three major cargo (and passenger) hubs could be needed. HKG’s market share will be much smaller, but the overall pie will be so much bigger.
Asia-Pacific Airports 2009 Issue 3
Fully loaded
Will Hong Kong’s cargo ‘super terminal’ continue to dominate the Pearl River Delta region market for years to come? Ian Putzger and Joe Bates report.
With the notable exception of FedEx’s Memphis hub, quite simply no other airport on the planet handles as much international cargo as Hong Kong.
Over 3.7 million tonnes of cargo passed through the airport last year with over 70% of the total – 2.6 million tonnes – being handled by Hong Kong Air Cargo Terminals (HACTL) at its US$1 billion SuperTerminal 1.
With a total floor area of 390,819sqm, the complex is the world’s largest cargo terminal, its size and handling technology ensuring it is capable of accommodating up to 3.5 million tonnes of freight per annum.
HACTL currently boasts 90 international airlines and more than 1,000 freight forwarders as customers.
And it is actively looking to add to the list as Hong Kong’s air cargo and logistics industries continue to flourish despite economic downturn in other parts of the world.
Around 70% of all cargo handled at the terminal either originates or is destined for mainland China, the giant on Hong Kong’s doorstep with a population of more than 1.3 billion people.
Indeed with the vast majority of cargo exported out of Hong Kong originating in the surrounding Pearl River Delta (PRD) region, HACTL has introduced a number of innovative schemes designed to ensure that it captures much of the business.
These include launching a bonded trucking service between half-a-dozen different PRD locations and SuperTerminal 1 rather than waiting for consignments to be shipped to Hong Kong.
The service, operated by subsidiary HACIS, includes pick-ups at Shenzhen, Guangzhou, Xiamen and Fuzhou airports as well as at Humen Port in Donguan and the Huangpu free trade zone. Over the past few years the trucking service has shown growth rates in the 20%–25% bracket.
“We are working on adding two more points to expand our coverage in the Pearl River Delta,” enthuses HACTL managing director, Anthony Wong. Back on home turf HACTL recently completed a HK$2.7 million project to construct three canopies at SuperTerminal 1 to enhance protection to cargo on the ramp in adverse weather conditions. Another current endeavour is increasing the terminal’s ULD handling capacity.
Wong says that the project – scheduled for completion in the second quarter of 2009 – clearly shows HACTL’s commitment to continuously upgrading its prize asset to improve operational efficiency and customer service levels.
HACTL certainly appears to value the importance of customer services for its business partners, with the company recently starting a revamp of the service desks next to the customs examination halls at SuperTerminal 1 in a bid to improve convenience for forwarders and truckers.
“We are sensitive to our customers’ feedback and needs,” insists Kenneth Bell, HACTL’s director of service delivery. “This means that we are dedicated to continuously investing in our facilities and services to advance our product. Hopefully our efforts will help uphold Hong Kong’s unique position as a leading air cargo hub.”
Wong has no qualms in admitting that a large chunk of the company’s future investment will be geared towards enhancing HACTL’s IT infrastructure. “We will invest HK$93 million per year over the next three to five years,” he notes.
He also emphasises the importance of a close dialogue with the airlines and forwarders in the development of new solutions.
As far as industry-wide efforts to improve processes go, HACTL is supporting IATA’s e-freight initiative, which aims to drive paper out of the airfreight cycle. Hong Kong was one of the original six test markets for the global undertaking, which kicked off last November with trials moving cargo between those six global points.
Now the handling company is getting ready to join Cargo 2000, a global initiative aimed at standardising airfreight processes and developing performance measuring metrics to bring more transparency in terms of quality and performance into the industry.
Three years ago HACTL obtained certification from TAPA, an organisation that promotes air cargo security, and it is still the world’s only cargo terminal operator with that badge, claims Wong.
Wong proudly claims that SuperTerminal 1 has the lowest “pilferage rate” of any cargo terminal in the world and firmly believes that this is one of the major reasons why shippers use Hong Kong.
The appeal of Hong Kong was certainly apparent in the first half of 2008 when HACTL recorded a 6% rise in tonnage at SuperTerminal 1. Stratospheric fuel prices and the sluggish US economy, however, mean that such growth is unlikely to be matched in the second half of the year.
Says Wong: “I am always optimistic and hopefully we will still have growth, but realistically it will now probably be in the low single digits.”
Other storm clouds on the horizon include the construction of a rival cargo terminal at Hong Kong and growing competition from neighbouring mainland China airports.
The new cargo terminal is being built by Hong Kong-based Cathay Pacific Airways, which has unveiled plans for its own $620 million facility capable of handling up to 2.6 million tonnes of freight per annum.
Cathay, which together with subsidiary Dragonair handled 1.6 million tonnes of cargo in Hong Kong last year, claims that the terminal will increase competition and stimulate cargo growth when it opens in the second half of 2011.
It will be operated by CPSL, a wholly owned subsidiary of Cathay Pacific, and is capable of being expanded to handle an additional four million tonnes of cargo per annum when demand dictates.
As a result of its plans, Cathay will sell its entire 10% stake in HACTL. There is no doubting its threat to HACTL’s future dominance at Hong Kong, but if Wong is worried he certainly isn’t showing it and appears positively bullish about the future.
“Am I losing sleep over it? Absolutely not,” says Wong. “When one door closes another opens and the potential loss of Cathay’s business will give us more capacity to use in the future.”
Meanwhile competition from Guangzhou Baiyun and other emerging airports in the Pearl River Delta continue to snap at Hong Kong’s heels.
Guangzhou Baiyun International Airport, for example, is preparing for the start of intra-Asian hub operations by Federal Express despite only opening for business four years ago.
And rival UPS announced in June that it will be moving the epicentre of its Asian operation in the Pearl River Delta to nearby Shenzhen in 2010.
Last year Guangzhou Baiyun clocked up 6.4% growth in cargo throughput, while Shenzhen – buoyed by the start of Jade Cargo Airlines, an all-cargo carrier founded by an alliance of Lufthansa Cargo and local stakeholders – saw tonnage rise 10%. Both eclipsed Hong Kong, which reported a 4.5% increase in cargo volume.
Wong, however, remains unfazed by the rise of Shenzhen and Guangzhou Baiyun, arguing that the Pear River Delta market is massive and growing fast enough to keep all three airports on the expansion track.
He says: “Why worry about what others are doing when the market is easily big enough to support all three gateways?
“You also have to remember that one of Hong Kong International Airport’s main assets is its route network and it is an advantage that it will take the likes of Guangzhou and Shenzhen years to catch up.”
Should he be concerned about the fact that rising costs in the region appear to be nudging some manufacturers to the periphery of the Pearl River Delta and beyond?
Wong acknowledges the trend but again claims that he is not unduly worried about the situation, as he believes that the goods being manufactured by the companies that are moving away are mostly low-cost products that typically are shipped by ocean vessel.
He is also quick to crush any suggestion that Hong Kong is expensive for shippers compared with airports on the Chinese mainland.
“Forwarders tell me that now the cost in Hong Kong to process cargo is the same as in Guangzhou and Shenzhen,” he says, pointing to the rise of the Chinese currency and China’s inflation rate, which has eclipsed Hong Kong’s.
Moreover, a study produced two years ago by consulting firm GHK claimed that moving manufactured goods from the Pearl River Delta to Frankfurt was 5% to 8% cheaper through Hong Kong than going via Guangzhou and Shenzhen respectively.
HACTL’s position in the cost debate has been that the answer lies in improving productivity to bring down overall costs. Since the airport’s 1998 opening some 20 initiatives have pushed up the capacity of SuperTerminal 1 from its original 2.6 million tonnes to 3.5 million.
Wong points with pride to a number of awards that the operator has won over the years and stresses that more investment will be made.
So much for the competition from mainland China then; has HACTL any plans to export its handling expertise outside Hong Kong and possibly turn the heat up on its rivals?
“We have plans, we are talking to possible partners but no such move is imminent,” admits Wong. Limiting HACTL’s cargo handling efforts to Hong Kong certainly wouldn’t appear to make much business sense with a market as vast as mainland China on its doorstep.
Without doubt the Asia-Pacific cargo market is hotting up with competition to Hong Kong’s dominance seemingly growing by the day. HACTL for one is looking forward to the challenge.
Aisa-Pacific Airports 2008 Issue 2
Sea change
Does the opening of Hong Kong’s new SkyPier herald the start of a new era for water connections at Asia-Pacific airports? Robin Stone investigates.
Snaking its way 1,400 miles through southern China, the Pearl River ends its journey when it flows into the South China Sea between Hong Kong and Macau.
Its famous delta has become one of the top manufacturing regions in Asia, ever since the Chinese government’s adoption of a more liberal economic policy in 1979 heralded a surge in foreign investment.
Today, the Pearl River Delta’s manufacturing portfolio of textiles, toys, electronics and brewing accounts for a staggering 5% of all goods produced worldwide.
But while the remarkable economic growth of China, India and Japan has been reflected in the scramble for route rights among leading Western carriers, the expansion of international transport links in the wider Pacific Rim has not been confined to the air.
The opening in mid-January of Hong Kong International Airport’s (HKIA’s) much-vaunted SkyPier, a new cross-boundary ferry terminal, which represented an investment by the airport authority of around HK$1 billion, is a classic example.
Operated by a joint venture company, the Hong Kong International Airport Ferry Terminal Services Limited, SkyPier enables passengers travelling between the former British colony and the Pearl River Delta to bypass local customs and immigration
control, trimming travel times and smoothing air-to-sea or sea-to-air transfers.
And to serve as a reminder that many airports around the world serve as multi-modal transport hubs – flying people in by air and sending them on their onward journey by water, and vice-versa – HKIA combined the SkyPier launch with the official opening of its north satellite concourse.
“The new SkyPier and north satellite concourse are part of HKIA’s growth projects to enhance service levels and meet future demand,” says Dr Marvin Cheung Kin-tung, chairman of the Airport Authority Hong Kong.
“The SkyPier efficiently conveys passengers travelling between the Pearl River Delta and the world via HKIA, while the North Satellite Concourse enables about 98% of our passengers to embark and disembark airplanes in an indoor, weatherproof environment.”
Strong demand for cross-boundary transport saw a temporary SkyPier established in 2003 to facilitate passenger flow between HKIA and the Pearl River Delta (PRD). Today, eight ferry routes are split between two operators – TurboJet and the Chu Kong Passenger Transport Company – whose high-speed ferries make an average of 90 trips every day.
They shuttle around 6,000 passengers between Hong Kong airport and six PRD ports – Zhongshan, Zhuhai Jiuzhou, Dongguan Humen, Guangzhou Nansha, Shenzhen Shekou and Shenzhen Fuyong – as well as Macau’s Taipai and Maritime Ferry Terminal.
Passengers heading overseas via SkyPier are exempt from the HK$120 airport departure tax. In addition, upstream check-in services at major SkyPier ports, allows passengers to obtain boarding passes and check in luggage, simplifying the ferry crossing to the airport.
The temporary SkyPier served nearly 10 million passengers in its seven years of operation. By contrast, the new facility, which began with the construction of a permanent pier on the eastern tip of the island in 2006, can handle up to eight million passengers in a single year.
Its 16,500sqm dwarf the old pier by a ratio of eight to one, and it boasts 20 airline check-in desks and five security screening channels; both can be expanded to meet growing demand.
The airport’s automated people mover system has now been extended to the SkyPier, halving the time for passengers transferring between the ferry pier and Terminal 1 to about four minutes.
But while SkyPier has attracted most of the attention among ‘maritime’ airports in the Asia-Pacific region, other countries miles removed from Hong Kong and China have not been slow to embrace the ferry sector.
Japan, where island airports such as Kobe and Nagoya require speedy links with the mainland, is a prime example. Kobe and Kansai airports are linked by a high-speed ferry service every 45 minutes across Kanku Bay. Run by Kaijo Access since July 2007, the service brings Kansai and Kobe within half an hour’s reach of each other.
It’s a vitally important link. Kobe – still relatively new in airport terms, having opened just four years ago – operates principally domestic flights, but is also geared up to handle international charters, so large numbers of leisure passengers can now be literally ferried between the two airports.
A shuttle bus service linking Kansai with the ferry terminal picks passengers up outside first-floor arrivals, and drops them off around eight minutes later. Ferry tickets can be bought for 1,500 yen (children half-price) at a dedicated counter at the northern end of the passenger terminal building. Buses are timed to match all ferry sailings.
Nagoya’s Central Japan International Airport – Japan’s third maritime gateway after Nagasaki and Kansai – is also well served by ferries.
Located on an artificial island in Ise Bay 35km south of Nagoya, the airport is the main international gateway for the Chubu (“central”) region of Japan. Three high-speed ferry services link the airport to Tsu, Matsusaka and Toba, with an automated people mover connecting ferry port with passenger terminal.
Hong Kong’s SkyPier is unique in that it was purpose-built by the airport to facilitate ferry crossings, but those airports not in that envious position are generally well served by specialist transfer operators.
Brisbane’s BCT, for example, services all airport and cruise ship terminals in Perth, Sydney and south-east Queensland.
The company, which has been operating since 1999, transfers more than 5,000 passengers every month, and offers them a ‘meet and greet’ service, plus assistance with their luggage. Customers can even watch a DVD during their journey.
In 2008, BCT became the first airport transfer franchise in Australia. It is in the process of expanding across Australia and into both the north and south islands of New Zealand.
The Tasmanian Tour Company offers two services to and from the island’s Devonport Airport and the ferry terminal. Devonport is the home-port of the two luxury Spirit of Tasmania passenger ferries which sail nightly to Melbourne, increasing to double frequency during peak periods.
And was it purely coincidence that Sealink opened a state-of-the-art ferry terminal at Cape Jervis hard on the heels of Adelaide Airport’s new passenger terminal just over four years ago? No, according to the South Australian tourism minister, Dr Jane Lomax-Smith, who insisted that the dual openings combined to provide “another important boost for the South Australian tourism industry,” making the state’s top tourist attractions such as Kangaroo Island more accessible than ever before.
With travellers becoming ever-more adventurous, the multi-modal travel sector is flourishing, and many airports are getting in on the act by selling ferry and train tickets. Using the Airport Link rail network, travellers heading for Manly, for example, can buy a combined ferry-train ticket at Sydney airport’s domestic terminal.
For the passenger, of course, this integration of different transportation modes across international boundaries can only be of benefit, so it’s worth returning to Hong Kong’s SkyPier to see how it can work in practice.
Check-in for flights to Japan is now available at both Shenzhen and Macau, which means, for instance, that a business traveller taking an ANA flight from Hong Kong to Tokyo can check-in at either ferry port and not see his baggage again until he walks into the reclaim hall at Narita.
From a temporary terminal to a permanent fixture, SkyPier – the pearl of Asia-Pacific’s airport ferry terminals – is very much here to stay and, if anything, will grow further in the years ahead as aviation grows and continues to develop its intermodal links.
Asia-Pacific Airports 2010 Issue 2