Airport Authority Hong Kong has reported reclamation works for the Hong Kong International airport (HKIA) third runway development project are behind schedule and are now expected to be completed in 1H2021, rather than in 2020. The authority said HKIA’s third runway is still expected to be completed and commissioned in 2022 (previously 2024). It will boost capacity by 44%. The two existing runways are expected to reach capacity this year.
- Ground works for Hong Kong International airport’s third runway have been delayed but it should still open in 2022;
- It was vigorously opposed and passenger traffic has barely risen since approval was given;
- But it will be essential for retaining Hong Kong’s reputation as a hub against significant competition.
After Beijing Capital International and Tokyo Haneda, Hong Kong International is Asia’s third largest airport by passenger numbers but that ranking may not last long. Shanghai Pudong International is growing fast and in 2018 handled 74.0 million passengers to Hong Kong’s 74.5 million.
Obtaining authority for the new runway was not easy. As soon as it was announced, objections were raised, including that it should not be assumed that Chinese mainland airspace would automatically be made available, that the demand might not materialise, and because of environmental concerns. An environmental report was issued in 2014 in response to fears that the project could “spell disaster” for the area’s marine ecology because 672 hectares of seabed would be reclaimed.
About 40% of the cost is in land formation. Endangered Chinese white dolphins would be threatened, despite a pledge by the Airport Authority to expand a marine park when work is complete and there were concerns over the transfer of coral to another site. The environmental report’s response appears to have been adequate to swing the argument in favour of the authority.
According to the CAPA Airport Construction Database, the value of the project is around USD19 billion. It also includes new taxiways and aprons, adding further to the cost, which local commentators expect to rise, and runs in tandem with a renovation project for Terminal 1, one that will be completed in advance of the new runway. One of the reasons for an anticipated cost rise is the availability and price of marine sand in China, which has latterly held up works.
Passenger traffic has not, in fact, increased greatly since 2014, the year in which the environmental report was published, partly because other airports in the region have upped their game and made inroads into Hong Kong’s superiority.
Average growth in the last four years including the first quarter of 2019 has been only 2.8%, scarcely more than at London Heathrow Airport, which always seems to find a way to squeeze in more flights and passengers despite also being at capacity.
CHART – Traffic growth at Hong Kong International airport has been flat since 2016 and slipped to +2.5% in 2018, with the same level recorded for 1Q 2019Source: CAPA – Centre for Aviation and Hong Kong International Airport reports
The two main airlines, with almost 47% of seat capacity between them, are Cathay Pacific and its subsidiary Cathay Dragon, the old Dragonair. Airline alliances play a major role at Hong Kong International, with only 20% of seat capacity being on unaligned carriers and oneworld – of which Cathay Pacific is a member – being the main one with 51% of capacity between it and its affiliate. The alliance total does includes some of the Asian groupings that can only be described as alliances in the loosest terms.
One interesting aspect of the airport’s operation is the distribution of departing and arriving seats per hour, which does demonstrate how full the runways are, and more. Each of the days in the current week (w/c 29-Apr-2019) shows a very similar pattern of virtually 24-hour operation, with only one hour (0300-0400) devoid of any arriving and departing seats and the services and slots that go with them.
Even more noticeable is the distribution during the ‘working day’ (0600 – 2400) and the equilibrium between arriving and departing seats by the hour, on each day of the week. The chart for Wednesday 01-May-2019 is remarkably similar to the ones for every other day this week.
CHART – There is a fairly uniform split between departing and arriving movements at Hong Kong International through the main parts of the daySource: CAPA – Centre for Aviation and OAG (data: 01-May-2019)
This degree of organisation, allied to the completion of the third runway, should ensure that Hong Kong at least remains a major player in North Asian air transport. And not only in the passenger segment, but extending into the freight sector.
Back in late Nov-2017, DHL Express announced a USD396 million expansion plan for its Central Asia Hub at Hong Kong International, in partnership with the Airport Authority Hong Kong. The expansion is expected to commence operations in 1Q2022, the same year as the runway, increasing throughput at the facility by 50% to 1.06 million tonnes per annum and increasing warehouse space by 50% to 47,000 square metres.