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Old April 2nd, 2005, 05:32 AM   #881
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HKIA During SARS
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Old April 2nd, 2005, 06:27 PM   #882
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Fighting for a place at the table

Airlines and airports maneuver for a piece of the burgeoning China freight market

By Geoffrey Thomas
In Hong Kong
Air Transport World, December 2004

Of the lessons learned from the shocks that have jolted the airline industry over the past few years, perhaps the most valuable is the resilience of air cargo. Despite SARS, terrorism and avian flu, Asian airlines have managed to derive ever-increasing revenue--in one case, up to 48% of the total--from freight.

In fact, freight is now recognized as a form of insulation from the fickle whims of passenger traffic. And China, the world's fastest-growing market with 9.5% annual GDP growth and exports topping $851.2 billion in 2003--triple the 1997 number--is attracting immense interest from airports and airlines in the region as the "best ticket in town" for cargo revenue.

In late October, in a fascinating twist in the drive for freeing markets, a new dimension emerged. Chinese authorities announced, in a de facto manner through an Air China-Cathay Pacific equity tie-up that the country's two dominant hubs would become Beijing and Hong Kong. Perhaps not coincidently, that news came just one week after Hong Kong-based Cathay was awarded 12 much-sought-after weekly freight services to Shanghai.

The Air China-Cathay linkage is seen by some China watchers as an effort by Beijing to bolster that city's hub status and temper the rapid expansion of Shanghai. Last year, Shanghai handled 1.2 million tonnes--double the year before--and soared past Beijing as China's premier cargo gateway. Hong Kong, the world's second-busiest cargo airport, handled 2.6 million tonnes while Beijing accounted for just 662,000 tonnes.

Hong Kong's drive to remain Asia's dominant cargo hub and gateway for Chinese exports is well supported by Cathay, its subsidiary Air Hong Kong Ltd. and affiliate Dragonair. All have made significant investments in freighters. AHK as it exists today has grown out of a cooperative venture between Cathay Pacific and DHL Worldwide Express that was signed in October 2002 to support DHL's services to major cities in the Asia/Pacific region. DHL serves 24 destinations in Asia with 34 dedicated overnight express services and 800 commercial flights a day.

Cathay owns 60% of AHK and DHL holds 40%. Cathay initially used 777s and A330s in back-of-the-clock operations beginning in 2000 to deliver DHL overnight packages to six destinations. However, in 2002 the companies restructured their cargo operations, with AHK ceasing its 747-200F services to Europe to concentrate on Asian operations such as DHL overnight work. In support of this plan, AHK has ordered six firm and four option A300-600 General Freighters, one of which has been delivered with the remaining firm aircraft arriving through the first quarter of 2005. They will operate night flights to Bangkok, Taipei, Narita, Penang, Singapore and possibly Manila.

An interesting challenge for AHK will be utilization of the A300-600GFs during the day. "There are a host of opportunities for ad hoc charters," CEO David Saechiu tells ATW. He also confirms that the carrier intends to firm the four optioned freighters for China services now that Cathay has received the Shanghai authority. He is bullish on Hong Kong's ability to
remain the region's dominant hub with its "industry best" cargo loss record and vast financial services infrastructure.

While AHK takes care of the intra-Asia cargo, Cathay is ramping up its freighter fleet with a 747-400SF conversion program launched earlier this year. The initial order calls for conversion of at least six and as many as 12 747-400 passenger aircraft. The first is expected to be completed in December 2005 and five more by 2007.

The airline currently operates six 747-200Fs and five 747-400Fs with one on order and is the world's sixth-largest air cargo carrier in terms of tonnage. Dragonair also has ambitious cargo expansion plans. It recorded a 39.6% hike in cargo to 269,981 tonnes in 2003 and has four 747Fs in service with five 747SFs due for delivery from Singapore Airlines between 2006
and 2008.

China's major players also have ambitious goals. China Southern Airlines is planning to expand its freighter fleet from two 747-400Fs to support the new Baiyun International Airport at Guangzhou, which it claims will be the country's largest cargo facility and one of the top ten in Asia.

Air China and China Eastern have cargo subsidiaries. This year, Air China Cargo ordered two more 747-400Fs to add to its fleet of five. Ever mindful of competition from Chinese airlines, Hong Kong Center for Transport And Logistics, the dominant freight handler with 80% of the market, is establishing an air cargo consolidation center in the Fujian free trade zone in Shenzhen to win cargo before it gets to its rivals' airports. However, China Southern is alert to this move and has plans for its own trucking group to supplement and feed its cargo operation at Baiyun.

With China's massive growth, it clearly is the dominant market for air cargo in Asia, but opportunities very much will depend on the level of airport access granted and where those airports are located. "The China-US agreement signed earlier this
year has the potential to alter freight markets and flows in the region dramatically," says Derek Sadubin, GM of the Sydney-based Centre for Asia Pacific Aviation.

He notes that the agreement allows a total of 195 new weekly services over six years for the carriers of each country--111 for all-cargo carriers and 84 for passenger airlines--in addition to the current 54 weekly flights. Therefore, by 2010 each country is expected to operate 249 weekly cargo flights, approaching the current frequency between the US and Japan.

Hubs are a key part of the US-China agreement, Sadubin asserts. "Significantly for Hong Kong, the agreement allows carriers to establish cargo hubs in the other country by 2007 if they meet certain minimum-service requirements," he says. "For Hong Kong to retain its dominant position in Asia, the next round of US-Hong Kong talks scheduled for 2005 is critical. To
safeguard Hong Kong's hub role and to maximize the airport's value as it is privatized, a significant liberalization with the US in 2005 is inevitable. This will probably include access to the tightly controlled Hong Kong-Japan market, which the US tried to gain access to in 2002 and which has been strenuously opposed by Cathay Pacific."

But one US airline is having second thoughts about establishing a hub in China. FedEx Express Regional VP-China Region Eddy Chan told the Beijing Morning Post that the airline has reservations about moving its hub from Subic Bay in the Philippines to the new Baiyun airport. "China's aviation fuel costs are the highest in Asia and its landing charges are the second-highest after Japan," he says. FedEx will make its decision within a year, according to Chan, although some analysts suggest it cannot afford to turn its back on a China hub strategy.

FedEx Express has a dominant position in Asia with 295 flights a day across the Pacific and within the region. In the China market it had 11 flights per week before the new allocation, and with Chinese partners serves 213 markets in the country. It has made a massive commitment to future growth with its launch order for 10 A380Fs with deliveries from 2008. On its
radar scope are services to 100 additional Chinese cities. China and Asia are critical to FedEx's expansion plans, as US domestic package business--both document and box--has reached a plateau with only a marginal increase expected in 2005 and 2006 after just 2% growth in the past two years.

While Beijing and Hong Kong would like to control all the cargo traffic from China, others have very different views of how that business may flow. Taiwan is a giant in the cargo business, not to mention one of the largest investors in China. In the first five months of 2004, exports from Taiwan to China surged 33% to $17.7 billion and imports from China went up 53%. That trade, which includes transit cargo to the US, is carried mainly by two alliance groupings, China Airlines-Dragonair and EVA Air-Shanghai Airlines. Those alliances may come under strain when Dragonair starts US services and Shanghai Airlines gains rights to the US. China Airlines also has a 25% stake in China Cargo, which teams China Eastern and shipping giant Cosco.

To meet growth and bolster Taipei's role as a hub, a new 111-acre free trade cargo complex is under construction at Taipei's Chiang Kai Shek InternationalAirport. The first stage of the $640 million JV between the Taiwan government and Far Glory Air Cargo Terminal is due to open next year. Taiwan's GDP growth is second only to China's at 7.7% with IATA projecting cargo growth at 7% per year between now and 2007. To meet that demand, China Airlines ordered two more 747-400Fs in April to bring its fleet to 21 by 2007.

To the south, Singapore, Kuala Lumpur and Bangkok have plans to tap into the giant China cargo market even as they war among themselves for dominance of Southeast Asia. Changi Airport's preeminent position may come under threat from the new Bangkok airport scheduled to open in September 2005 if that facility can solve inadequate infrastructure problems. Current Thailand
gateway Don Muang is Asia's seventh-largest in cargo, handling 945,000 tonnes last year--still way behind Changi's 1.62 million tonnes.

Both Singapore Airlines and Thai Airways International plan major expansion into China with a variety of cargo options including through flights to the US. Meanwhile, to the north and east of China, Korean and Japanese airports have evolved as major hubs for Chinese exports--in 2003, Narita handled 2.1 million tonnes and Seoul Incheon 1.8 million tonnes. Korean
Air, one of the world's top three freight haulers among combination carriers, saw cargo traffic soar 20.6% in the first quarter of 2004, built mainly on 55% growth in cargo from China. It has signed up for 20 747-400 freighter conversions with the first to be delivered in 2006. This is on top of two 747-400Fs ordered in early June for delivery in 2005. Currently
it operates 19 747-400Fs.

Lufthansa Cargo also is a major player in the China market and has just established an airfreight joint venture with Shenzhen Airlines to commence services in February to link Chinese destinations with Malaysia, India, Singapore and Thailand with two A300-600Fs.

Final word goes to DHL Regional Director-Greater China and Korea Jerry Hsu, who claims that "China could become the world's second-largest economy by 2015, and with $60 billion worth of goods being exported by air each year the real question is can you afford not to be in China today?"
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Old April 2nd, 2005, 09:20 PM   #883
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Old April 2nd, 2005, 11:53 PM   #884
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Direct flights turn focus on Koh Samui property
Chris Oliver
3 April 2005
South China Morning Post

Koh Samui property prices are a relative bargain compared to Phuket now that direct flights between the holiday island and Hong Kong are set to begin later this month, estate agents say.

The 40 per cent discount on Koh Samui property compared to the west coast should shrink in view of the reduced travel time it will take to reach the island's shores when Bangkok Airways begins its thrice-weekly flight service on April 22.

Visitors from Hong Kong need no longer change planes in Bangkok, which can turn the four-hour direct flight into a full-day journey.

"It is really going to open up the market in terms of accessibility," says Jinn Lai, regional director of international properties, Colliers International. "It will be a great windfall."

Most believe the new air service will foster a tourism boom in what is largely still a backpackers' destination.

If the sun-seekers arrive as expected, agents say rental yields for holiday villas should skyrocket, helping to underpin price appreciation on the handful of developments now under way.

Land prices on the island are believed to have risen at double-digit rates last year, but most information is anecdotal. Soaring commodity prices and a shortage of reputable contractors are also pushing up the prices of new units.

"Looking at real fundamentals we can say that land values have increased by at least 20 per cent in Koh Samui, and the gap between Phuket land prices is shortening quiet considerably," Mr Jinn says

Alan Sadd, director of Koh Samui developer CoCo International Properties, believes prices will rise about 20 per cent this year, fuelled in part by higher rack rates on rental properties as tourist visits accelerate. About 800,000 holiday makers visited the island last year.

Airlines such as Dragonair and AirAsia are also believed to be considering direct flights.

Mortgage financing of up to 50 per cent is available to non-Thai residents on condos with freehold title. Forty-nine per cent of units in a development can be allocated to foreign buyers with full land rights within the condo structure.
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Old April 4th, 2005, 04:17 AM   #885
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Posted: February 9, 2005 9:00 AM
Corporate Press Release

Bangkok Airways will introduce its second overseas route out of Koh Samui, to Hong Kong, in April this year to tap the upmarket leisure passenger market from the former Crown Colony.

The new route will present the first direct air link, on a regular basis, between he two points which in the past were channeled from Hong Kong either through Bangkok and Phuket due to the absence of non-stop flights.

The Koh Samui-Hong Kong flights will bring more passenger traffic to the island, the most lucrative operation for Bangkok Airways, which has almost single-handedly promote the island as a world-class destination over the past 15 years.

Hong Kong investors have long been the mainstay of the holiday villa market on the island, and the new flights will save them several hours’ flight time by eliminating a Bangkok connection. This will make Samui much more attractive as a weekend-break destination.

Bangkok Airways intends to offer three flights a week on the route on its 125-seat Boeing 717 jetliners in a flight that takes about 2 hours 30 minutes.

Vice-president Nandhika Varavarn said yesterday the launch coincided with the completion of more facilities on the island, including an 18-hole golf course built by the Santiburi group.

The arrival of the fifth Boeing 717 in Bangkok Airways’ fleet in the next few months also makes it possible for the airline to start the new route.

Nearly all the air services in and out of Koh Samui are provided by Bangkok Airways, which also owns and operates the airport on the island.

Hong Kong is one of the three new overseas destinations planned by the airline this year.

The other two are in China including Hangzhou.
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Old April 4th, 2005, 05:35 AM   #886
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Logistics 05
Willy Lin, Chairman



There were no surprises for the Hong Kong logistics industry in the Policy Address delivered by the Chief Executive on 12th January 2005. However, the few items mentioned under the topic are all very important for the future development of the industry.

Shippers have been very glad to see the start of Cathy Pacific's full freighter services to Shanghai this month. Indeed, we look forward to more direct services from Hong Kong airlines to cities in the Mainland. On one hand, this would alleviate the capacity shortage problem that shippers in the Mainland have been encountering for their export cargo, and, on the other hand, it allows Hong Kong airlines to offer through-services between the Mainland and the rest of the world. Shippers after all prefer their cargo to be carried by a single airline than through inter-line arrangements. Hong Kong shippers would also benefit from the comprehensive network and services that Hong Kong offers as an important air cargo hub. We give our support fully behind the SAR Government and the industry's efforts in providing more direct flights between Hong Kong and the Mainland.

On the sea side, there are different opinions on the need for Container Terminal 10. However, we see the necessity to plan early. Cargo to and from the Pearl River Delta is projected to continue to grow strongly in the next two decades. There is beyond question demand for new terminal capacity for the region. Uncertainties, however, come from the question of whether Hong Kong container terminals would be outdone by their counterparts across the boundary. Nobody wants to see a 'white elephant' in the form of new, expensive facilities left unutilised. However, from the very satisfactory results of the latest sale of Asia Container Terminals and CSX Terminal, we can see that the industry's confidence is still very strong about the future of Hong Kong's container terminal business. Moreover, if we don't plan ahead, we will miss the opportunity if and when the need does arise. Building a new terminal, especially on a new location, is complicated and advance planning is absolutely necessary. More co-ordination with the Central government and authorities across the boundary is however needed.

On the technology side, the Council is a major supporter of the Digital Trade and Transportation Network (DTTN) in that it would enhance efficiency in the industry, bring down costs and take us all further in the global IT environment. Obviously, Hong Kong's competitiveness as a leading logistics hub lies on the issue of whether Hong Kong could quickly move upscale on knowledge and technology. Only when we are able to provide better value-added services at competitive prices could Hong Kong hope to maintain its leading position way into the future. DTTN will be a major step for all parties involved in the supply and demand chain, to transmit their data and documents seamlessly. This will improve productivity for the whole industry and everyone using the service will benefit. However, at this point, I must appeal to all operators and service providers to take the effort to see to it that a low cost environment for Hong Kong is maintained. If there is any cost savings arising from the utilisation of DTTN, then it should be passed on to shippers. Otherwise, shippers would have no choice but to look for lower cost routing alternatives. Hong Kong shippers are facing fierce competition within the region. Competition has further intensified with China's entry into WTO in 2002 and the removal of quotas in 2005. On the charge items that should be lowered, I would cite Documentation Fee, Advance Manifest Fee and Data Amendment Fee. If shipment data is transmitted electronically, then it stands to reason that carriers would have substantial savings from administration expenses. Therefore, such fees as are collected now should be lowered or altogether cancelled. At any rate, DTTN which will be made available later this year, will mark a new milestone for the Hong Kong trading and logistics industries.

While it has only been briefly mentioned in the Policy Address, the SAR Government and the industry have done a lot of work on simplifying cross boundary operations. The industry looks forward to the liberalization of the current "four-up, four-down" system. By "four-up, four-down" we are referring to Mainland regulations that require the same driver, container, truck and trailer to go up and come back (cross the boundary). The requirement essentially restricts most drivers and trucks to perform only one roundtrip a day. Unable to do more trips, land transport cost stays high. We understand that this requirement is going to be relaxed.

Although we are uncertain that the other requests of the industry, such as lower cross boundary truck licensing fee, removal of the requirement for double insurance and annual vehicle and trailer inspections, relaxing the time requirement for truck driver license, etc would be entertained or not, the relaxation in the "four-up, four-down" would certainly allow the operators to do more trips a day and hence lower land haulage rates. However, I must emphasize here, as the McKinsey Report points out, high land transport cost and Terminal Handling Charges are the two stumbling blocks that affect competitiveness of the Hong Kong port. We again repeat our demand here for shipping lines to lower the Terminal Handling Charge. The current charge levels are far too high and are causing cargo to move away form Hong Kong. Just looking at one problem, i.e. lowering haulage costs, would be insufficient to induce cargo back to the Hong Kong port.

We are looking forward to the completion of the Western Corridor that runs from Shekou to Tuen Mun. The co-location of the Hong Kong and the Mainland Customs at the Western Corridor is a wonderful improvement in administration and would speed up boundary crossing operations. The availability of an expressway from Dongguan and Shenzhen to Hong Kong will mean significant improvement in actual carriage of cargo from the manufacturing base in the Pearl River Delta to Hong Kong. We expect more efficient, speedier and lower cost haulage services. We understand that the parallel freight bridge at Lok Ma Chau would become operational this year. Shippers very much look forward to this infrastructure improvement.

We are seeing a lot of important developments for the logistics industry in 2005. While it may appear that logistics has not been emphasized in the Policy Address, it simply reflects that a lot of groundwork has already been done and efforts are geared in the right direction. It is our wish to see all parties in the logistics industry moving hand in hand to create their own successes.

I would like to take this opportunity to wish everyone a successful and rewarding 2005.
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Old April 4th, 2005, 05:37 AM   #887
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Old April 4th, 2005, 08:06 PM   #888
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Dragonair to double freighter fleet
By Keith Wallis in Hong Kong
4 April 2005
Lloyd's List

HONG Kong Dragon Airlines (Dragonair) has reaffirmed plans to double the size of its freighter fleet on the eve of launching a new transpacific service between Hong Kong and New York on Saturday.

Dragonair Cargo general manager Albert Yau Chong-yin, said the airline would operate at least eight Boeing 747 freighters by 2008, including several Boeing 747-400s that had been converted from passenger configuration.

The airline bought five Boeing 747-400 special freighters last year. Two of the five aircraft will enter service in 2006, followed by two more in 2007 and one in 2008.

Dragonair currently operates three Boeing 747-300s that were also passenger-to-freighter conversions and a Boeing 747-200 bought from China Airlines.

Mr Yau said the airline is also mulling the possibility of wet-leasing another Airbus A300B4 to support an existing A300B4 freighter used to operate cargo services to China.

The aircraft could be used to launch all-cargo services between Hong Kong and Ningbo and Qingdao, which are in Dragonair’s sights as its next destinations for China cargo.

He added the airline has wet-leased a Boeing 747-400 freighter from China Airlines to inaugurate a three times a week cargo flight between Hong Kong and New York starting on April 2.

Dragonair chief executive, Stanley Hui Hon-chung, said: “This will be a major milestone in the development of our cargo business, as it will give our customers direct access with Dragonair to the world’s biggest air freight market.”

He added that freighter flights to Osaka in Japan are being increased, from three times a week to six later this year.

Expansion of Dragonair’s cargo fleet comes as Taiwan’s EVA Airways and China’s Shanghai Airlines are set to announce details of an air cargo joint venture later this year.

The two airlines, which have been in talks for several months, could agree to set up a cargo airline in China that would use at least one Boeing MD-11 or 747-400 freighter leased from EVA Air, which already has a stake in a cargo terminal at Xiamen airport.
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Old April 5th, 2005, 02:10 AM   #889
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The Airport Authority Profile

The Airport Authority Hong Kong (AA) is a statutory body that holds a mandate to maximise the value of Hong Kong International Airport (HKIA) for the benefit of the territory's prosperity.

Wholly owned by the Government of the Hong Kong Special Administrative Region (HKSAR), AA was established in 1995 to operate and maintain HKIA, with an emphasis on enhancing Hong Kong's status as a major centre of international and regional aviation.

The Airport Authority Ordinance (Chapter 483, The Laws of Hong Kong). requires that the Board comprises a Chairman, CEO and between eight and 15 other members, provided members who are public officers are not in the majority. This structure provides a wealth of experience from various sectors of the local community and is designed to promote fair and objective review of executive management performance. The current AA Board is made up of the Chairman, CEO and 11 non-executive members.

With a management team strengthened by expertise from the commercial sector, the Authority's 900-strong workforce applies an entrepreneurial approach to developing HKIA into a preferred regional aviation hub and an engine of growth for Hong Kong's economy.

With this objective in mind, AA adopts a forward-looking philosophy to further expand HKIA's global aviation network to provide passengers with more destinations, greater frequency of flights and a wider choice of carriers. The Authority also strives to continuously increase the variety and quality of services to give travellers a user-friendly, enriching and memorable experience when passing through HKIA.

Riding on Hong Kong's strategic location and HKIA's world-class facilities, the Authority is extending the airport's home market to reach beyond the border. Expansion of the home market not only benefit Hong Kong's economy but also serve the Pearl River Delta's (PRD) 48 million population as well as the rest of the mainland with HKIA's extensive world aviation network and hassle-free multi-modal connectivity linking air, land and sea transportation services.

Another part of HKIA's PRD initiatives involves integration with other airports in the region, which is facilitated by the establishment of the A5 Forum. The Forum serves as a platform for the five PRD airports to work together to share a vast and growing market. Reaching to further north, HKIA has signed an agreement to foster closer ties with the Shanghai Airport Authority in the fast-growing region around the Yangtze Delta.

A business-and-service-unit structure is being used to reinforce staff accountability and sense of ownership and to encourage innovation. This, in conjunction with a pay-for-performance remuneration structure, has enabled AA to nourish a culture based on efficiency and prudent commercial principles. In addition, AA's business and service units have adopted a process management system designed to maximise consistency, discipline, transparency and innovation in the day-to-day running of HKIA.

While applying a commercial mindset to the running of the airport, AA has remained committed to the highest possible levels of security and safety. The Authority's safety management system, based on OHSAS 18001, has met both the Civil Aviation Department's Aerodrome Licensing Requirements as well as the newly-introduced ICAO Certified Aerodrome Safety Management standards. This safety management system was adopted as soon as HKIA opened - years ahead of the model becoming a standard ICAO requirement for all airports in November 2005.

AA has also worked to continuously raise security standards while minimising delay and inconvenience to travellers. In fact, HKIA was awarded 'Best in Class' for 'Sense of Security' and 'Security Inspection' by the IATA (now AETRA) Global Airport Monitor Survey.

As a responsible corporate citizen, AA is involved in a number of community and charitable events, plus educational programmes and environmental initiatives. The Authority also works with government departments and business partners to keep the community informed of employment opportunities at the airport.

The prosperous aviation market of the region and the commitment to run the airport business on prudent commercial principle have provided AA with a solid base for attaining good financial performance. Achieving a profit for the fourth consecutive year to 2004, the Authority has announced its intention to return HK$6 billion of equity to the Government through a capital reduction. The Authority has also been successful in maintaining its credit rating of AA- for local currency, and A+ for foreign currency, with the Standard & Poor's international credit-rating agency.

A sound commercial performance, coupled with a track-record that has resulted in a crop of international awards and accreditations, set the Authority ready for the Government's plan to privatise and publicly list the airport. In working towards this goal, the Authority's overall objective is to achieve a balanced regulatory framework that takes full account of the public interest while flourishing the growth and development of HKIA.
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Old April 5th, 2005, 02:15 AM   #890
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By hkbuses from a Hong Kong transport forum :



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Old April 5th, 2005, 03:59 AM   #891
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Official go-ahead for $1.3bn Hong Kong airport logistics park
04 April 2005
Lloyd's List

OFFICIALS have kick started plans to build a $1.3bn logistics park near Hong Kong International Airport after awarding a detailed feasibility study to British engineering consultant Ove Arup, writes Keith Wallis in Hong Kong.

The complex, covering 112 ha on the northern shore of Lantau Island about 5 km from the airport, is seen as a key driver in keeping Hong Kong’s cargo sector competitive in the face of tough competition from nearby southern China.

The park, which is being supported by logistics operators including Tradeport, which already has a logistics centre at the airport, will provide a purpose-built facility for logistics service providers.

Arup will prepare preliminary designs and development layouts, environmental impact assessments and an analysis of infrastructure works, marine cargo handling facilities and land reclamation. Initial proposals include the creation of 112 ha reclaimed from the sea at Siu Ho Wan. The first phase on the park will be developed on a 72 ha section of site, with the remaining 40 ha earmarked for a possible extension or other uses.

There will be road links to connect the airport and Kwai Chung container port, plus a $3.8bn bridge from Hong Kong across the Pearl River estuary to the western side of Guangdong province.

District planning officer for Lantau and Islands, Phyllis Li Chi-miu, said: “We are determined to expedite it. It will enable Hong Kong to catch up with other countries and maintain its competitiveness.”
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Old April 5th, 2005, 08:41 PM   #892
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Valuing Hong Kong
BY IAN PUTZGER
5 April 2005
Air Cargo World

Just a few years ago, visitors coming into Hong Kong would head straight to the tailors in Kowloon for for cut-price suits or the Temple Street night market for counterfeit designer labels. Today, there are still plenty of fake Rolexes available for $10 in some spots in the territory, but the real bargain hunters have moved north into China.

They have followed the same path as Hong Kong manufacturers, who set up shop across the border as costs on their home turf became prohibitive.

Today, some of the former manufacturing areas in Hong Kong are stacked with ocean containers filled with products made in China and waiting for ships to take them to overseas destinations. But ports and airports in China also have boosted capacity, raising question of whether Hong Kong's storied transport and logistics business - what many consider the life's blood of the city - could go the same way as the bargain hunters and the manufacturers.

The opening of Guangzho Baiyun International Airport last summer has added fuel to concerns that Hong Kong's high costs could hurt its air freight growth. Although some initiatives are underway to curb costs, the emphasis is on service levels.

In the maritime sector, the transshipment business - a long-standing cornerstone of activity in the territory's port - is showing signs of slowdown, pointed out David Oldridge, chief executive of Tradeport Hong Kong. Still, more sophisticated logistics activities should flourish in the territory, he says. "Cost is always an important issue, but the value proposition is what we have to focus on," said Oldridge. "The 3PL contracts are very much decided by the correct value proposition."

Better value has turned into something of a mantra in Hong Kong. "The evidence is that cargo will move through the hub that provides the best value proposition, in terms of service levels, cut-off times, protection against pilferage, loss and so on," said Ron Mathison, director and general manager of cargo of Cathay Pacific.

A study commissioned by DHL and conducted by the Center of Cyber Logistics of Hong Kong's Chinese University takes the same line.

It identifies the airport's unrivaled connectivity and high transparency and efficiency as key strengths of the territory and advocates investment in specialized logistics centers, especially for material handling and component distribution.

This is right in the sweet spot for Oldridge, whose outfit, a joint venture by Fraport and Amsterdam Schiphol, performs value-added services at Hong Kong International Airport.

In a notoriously overcrowded place, the large, open-plan Tradeport building is an oddity, but it's both on target and on budget, despite many misgivings from observers and forwarders, Oldridge insisted. By the end of last year, the facility was 50 percent full, and he expects a significant increase in use this year. By 2006 or 2007, he anticipates building a second level to cope with rising demand. Further down the road, Oldridge is thinking of taking up some space off airport. A likely target is a 185-acre logistics park planned near Chek Lap Kok.

Hong Kong's air cargo market has taken some time to get used to the concept of modern-day logistics.

After all, the old Kai Tak airport, which shut down in 1998, had no space for such activities, notes David Miller, managing director of Trinity Aviation and the representative of Fraport for the region.

Despite all the talk of moving up the logistics food chain, the strongest argument in favor of Hong Kong versus the upstart competition across the border has been its plethora of air links with other points on the planet. That makes it a natural magnet for airlines and logistics companies and the government of China's " Special Administrative Region" has been eager to keep it that way.

"The government wants to sell the airport, go for an IPO, so it's in their interest to make the airport busy," said Alfred Chui, cargo sales and service manager for Hong Kong of Air Canada.

But the cost question remains a thorn in HKIA's side.

According to the DHL study, terminal handling charges at the airport averaged US$144 for a five-ton shipment last year versus $45 at Baiyun.

"No question, China is cheaper. It's definitely an issue," said Andrew Jillings, vice president for Northeast Asia at BAX Global.

But to some extent, cost comparisons between HKIA and Chinese airports are warped. Operators say privately that there are a certain amount of invisible costs associated with doing business in China.

Last July, Hong Kong authorities signaled their discomfort over the cost issue when they announced a 50 percent rebate on landing charges to airlines for the first year on flights they operate to a new destination, and a 25 percent rebate in the second year.

On the cargo side, new measures are coming up to maintain Hong Kong's attractiveness to exports from the Pearl River Delta. Customs clearance is speeded up further through the creation of the new Shenzhen Western Corridor, and rules on truck and trailer movements that effectively limited them to one cross-border trip a day are being jettisoned.

Under the Close Economic Partnership Agreement that kicked in last year, cargo agents based in Hong Kong or Macau are allowed to establish wholly-owned offices in locations in China, including the major hubs like Shanghai or Beijing.

Much is riding on the back of a trucking service that CLK's dominant handler, HACTL, has established. It has set up drop stations in several locations and runs regular trucks to over 20 cities in the Pearl River Delta.

That operation has proved very attractive to logistics firms, says Jillings.

For 2004, HACTL recorded a throughput of 3.1 million tonnes, up 17 percent from the previous year. Rival handler Asia Airfreight Terminals, whose shareholders include Singapore Airport Terminal Services and FedEx, announced last summer that it would invest US$224.3 million to build a terminal in a bid to triple its air cargo capacity.

The new terminal, covering a floor area of 423,000 square feet, will have an annual cargo capacity of 910,000 tonnes when construction is completed by the end of 2006.

Last year also produced record cargo results for Hong Kong-based carriers Cathay Pacific and Dragonair, with the promise of more to come.

Dragonair clocked up 342,413 tonnes, 26.8 percent more than in 2003. Cathay carried over 970,000 tonnes, 11 percent rise from the previous year.

Both airlines are boosting their main deck capacity.

Dragonair, which added a 747-200 freighter and a wet-leased A300 freighter last year, acquired five 747-400s from Singapore Airlines, which will be converted into all-cargo configuration. The first two are slated to enter service in 2006, with two more to follow in 2007 and the last one the following year.

Cathay took delivery of a new 747-400 freighter in January, bringing its 747 freighter tally to six -400 and seven -200 editions of the aircraft. The carrier is the launch customer for Boeing's 747-400 conversion program, with the first revamped freighter due this coming December. Cathay has signed up for six 747-400SFs, with options for six more conversion slots.

Mathison has no intention of phasing out the -200 models when the newer freighters come in. "We plan to keep flying the -200s as long as possible. At this stage, there are no plans to replace our -200 fleet," he said.

In August, Cathay will launch freighter flights to Dallas/Fort Worth and Atlanta.

It will serve the two cities in tandem with three 747 freighter flights per week, bringing trans-Pacific freighter operations to 21 a week. These cities mark new destinations for the airline.

Overall, Cathay prefers to strengthen frequency on existing routes rather than add new points. But Mathison is using a broader all-cargo network to combat imbalances in traffic flows, which have become more pronounced.

"We try to be as close as possible to cargo coming out of regions with imbalanced flows. For example, in Europe, we serve many points rather than one or two hubs. In a similar vein, we plan to fly to Dallas/Fort Worth and Atlanta instead of moving all freighters through Los Angeles," he said.
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Old April 6th, 2005, 06:30 PM   #893
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Hong Kong : Open-skies 'must be two-way street'
Dennis Eng
06 April 2005
South China Morning Post

The government says it will not consider fully opening its skies to US carriers until Hong Kong airlines can at least carry passengers between two US destinations.

"Civil aviation is not an easy subject to talk about," said Wilson Fung Wing-yip, the Hong Kong government's negotiator leading the air services talks. The talks are expected to last several rounds, the first of which is scheduled for three days during the last week of April.

Open-skies agreements permit unlimited air service by the carriers of both countries to fly between and, more importantly, beyond each other's territory. This eliminates restrictions on the frequency of the service, the type of aircraft used and the prices they charge.

The lack of such an agreement means that passengers flying to the US from Hong Kong on Cathay Pacific must transfer to other carriers at Los Angeles, San Francisco or New York to connect to other destinations in the US and elsewhere.

"We are moving towards open skies, but we hope the US will respect reciprocity," Mr Fung said. "As soon as the US is prepared to open its skies, we would do the same."

US pressure to secure unrestricted air services in Hong Kong is expected to be keen, as a number of major aviation hubs in the region, like South Korea, have already signed open-skies agreements. However, Mr Fung is quick to point out that, since 2002, the US and Hong Kong have negotiated "a very liberal agreement, where all bilateral air services are determined purely on a commercial basis without any government interference".

Specifically, US carriers now fly to Hong Kong about 150 times a week, while there are 50 weekly flights to the US from Hong Kong.

"That's three times as many flights," Mr Fung said. "I am not suggesting that I am unhappy about the imbalance, as US carriers can operate as many times as they like. But Hong Kong would like to have the same opportunity."

Both Cathay Pacific and the Board of Airline Representatives in Hong Kong declined to comment on the issue.

An Airport Authority spokesman said: "We welcome the government's policy to progressively liberalise air rights, which will facilitate the flow of people and goods, and enhance Hong Kong's position as a regional aviation hub."

Michael Whitaker, vice-president of alliances, international and regulatory affairs at United Airlines, was even more forthright.

"To remain a viable hub for the region, Hong Kong must create a regulatory environment that encourages, not restricts, air service to Hong Kong," he said.
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Old April 7th, 2005, 12:33 AM   #894
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Sunset by jzs @ HKADB :





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Old April 7th, 2005, 06:54 PM   #895
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HURRAY!
For the 5th consecutive year, Hong Kong International Airport has been voted the world's Best Airport 2005. Singapore's Changi Airport takes the Silver Award as runner-up, in an exciting finish to the Survey.

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Old April 7th, 2005, 07:27 PM   #896
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HK Air Cargo Terminals 1Q Throughput Up 3% On Year
7 April 2005

HONG KONG (Dow Jones)--Hong Kong Air Cargo Terminals Ltd. said Thursday its throughput in the first quarter rose 3% on year to 532,348 metric tons.

In March alone, the throughput at Hactl, which handles most of the cargo moving through Hong Kong's international airport, was up 3.3% to 210,905 tons.

Hactl is jointly owned by Swire Pacific Ltd. (0019.HK), Jardine Pacific Ltd., Wharf (Holdings) Ltd. (0004.HK), Hutchison International Port Holdings Ltd., China National Aviation Corporation, Cathay Pacific Airways Ltd. (0293.HK) and CITIC Pacific Ltd. (0267.HK).
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Old April 7th, 2005, 07:29 PM   #897
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By Mark Tang @ HKADB :







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Old April 7th, 2005, 07:37 PM   #898
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Quote:
Originally Posted by City of Life
HURRAY!
For the 5th consecutive year, Hong Kong International Airport has been voted the world's Best Airport 2005. Singapore's Changi Airport takes the Silver Award as runner-up, in an exciting finish to the Survey.

Skytrax
http://www.airlinequality.com/
Quoted from http://www.airlinequality.com/2005/airport-05-press.htm
Quote:
These two airports achieved more than 130,000 votes each, with the final margin between 1st and 2nd position being less than 500 votes.
The votes obtained for HKG and SIN are so closed! Congradulations to both airports!
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Old April 8th, 2005, 06:37 PM   #899
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Hong Kong Express Airways License OK'd
Friday April 8, 7:47 am ET

HONG KONG (AP) -- Hong Kong Express Airways Ltd. said Friday it has received approval for a license that allows the carrier to seek the rights to fly between Hong Kong and secondary cities in China.

"This latest development effectively confirms our status as Hong Kong's newest airline," the airline's chief executive officer, Andrew Tse, said.

The Air Transport Licensing Authority approved the carrier's license application, the company said. The license permits Hong Kong Express to seek designation and allocation of traffic rights from the government to operate scheduled air services between Hong Kong and Chinese cities.

Hong Kong Express will take delivery of its first aircraft in July and will add three aircraft to its fleet by April 2006.
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Old April 9th, 2005, 06:56 PM   #900
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Hong Kong, Luxembourg Agree to Expand Cargo, Passenger Flights
Friday April 8, 7:37 am ET

HONG KONG (AP) -- Hong Kong said Friday it has agreed with Luxembourg to expand cargo and passenger flights.

The two governments have lifted restrictions on the number of flights from each side, said Wilson Fung, Hong Kong's Deputy Secretary for Economic Development and Labour. Currently there are 10 flights a week from each side.

Fung said the agreement also expands "fifth freedom" rights between the two countries. Fifth freedom, sometimes referred to as "beyond rights," allows airlines to carry passengers to one country, and then fly to another country, rather than have to return to the country of origin.

The rights have been expanded to 29 points from 17.

Fung said no Hong Kong airlines currently fly to Luxemburg, but Luxembourg-based freighter operator Cargolux Airlines International has a long business history in Hong Kong.

"Luxemburg is an important cargo center in Europe, and Hong Kong is Cargolux's important cargo hub in Asia," Fung said.
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