IATA pins Hong Kong as competition catalyst

IATA pins Hong Kong as competition catalyst
By Hannah Edensor


Competition is key for aviation success, and Hong Kong is the master to look to.

This is the word on the street with the International Air Transport Association (IATA), who has pinned the old Hong Kong International Airport (HKIA) as the one to watch.

As HKIA moves forward with the building of a third runway and associated infrastructure, IATA’s director general and CEO Tony Tyler has welcomed the news as an encouraging sign for the industry.

“We commend the government on this important decision and everyone associated with the project especially the Hong Kong Airport Authority and the government for the thorough work to get us to this point including evaluating the environmental impacts and working out how to mitigate them,” Tyler said in a speech to the Foreign Correspondents Club of Hong Kong.

HKIA plays a major role as an economic mover and shaker, with HK home to some 2500 regional headquarters, and a tourism industry worth a motza – or KH$250 billion.

On top of that, Hong Kong opens its arms to around 63 million travellers, and processes a whopping 4.4 million tonnes of cargo, making HKIA a critical link in the global chain.

“IATA has long been an advocate of the need for a third runway in Hong Kong. And it is in the interest of everyone in Hong Kong to see the aviation industry flourish,” Tyler added.

“Increasing HKIA’s capacity to be able to serve 100 million passengers and 9 million tonnes of cargo by 2030 will ensure that the airport continues to be a pillar of Hong Kong’s success—provided the expansion is built, financed and funded wisely.”

Building this three runway system at HKIA is estimated to cost the US equivalent of $19.3 billion, so it’s not cheap.

But for anyone fearing this would bump up the price of flights or put a burden on taxpayers, think again, because IATA has developed a framework that would allow the infrastructure to rise up, without any of those extra dollars coming out of passenger’s pockets.

“Airlines would pay for the infrastructure—through increased volumes, not increased charges. And that would apply to existing infrastructure as well as newly built facilities,” Tyler explained.

“The growth in traffic that the extra runway and terminal will bring will see the airport’s success over its first 17 years repeated all over again – provided its airport charges are kept competitive.”

“And let’s remember that the airport’s value to Hong Kong was never intended to be only in the profits it generates. In fact, its role as a catalyst for economic activity makes a much broader contribution to the community and the government.”

The competitiveness of Hong Kong’s air transport network has been under pressure in recent years, with HK’s share of the market connecting China to the rest of the world shrinking 3%, with its market share on the ASEAN to North America market stagnating.

But IATA and Tyler has touted the airport as a “winning model of competitive charges and high quality”, with the third runway set to boost aviation and set the standards for the industry in the years to come.

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