The Airport Authority Hong Kong (AAHK) has launched a new program that would offer up to HK$8 million (US$1.03 million) in incentives for airlines to open additional routes and increase flight frequencies to and from Hong Kong in a bid to reinforce Hong Kong International Airport (HKIA) as a global aviation hub and make use of new runway slots.
AAHK, which manages the airport, announced that they launched the new Airport Network Development Programme in June following consultations with local and foreign airline representatives. The programme includes two schemes: the New Route Scheme and the Strategic Development Scheme.
Under the New Route Scheme, all cargo and passenger airlines that launch new destinations connecting to HKIA with a defined continuity will be eligible to receive financial incentives for two years.
A spokesperson from the AAHK told Asia Cargo News that airlines operating at HKIA and airlines new to HKIA are eligible to receive incentives from the programme, which is open for applications from June 1, 2024, to December 31, 2027.
The Strategic Development Scheme, on the other hand, encourages airlines to operate routes aligned with AAHK’s strategy.
“Any passenger and cargo airlines that launch new routes and/or increase frequencies to AAHK’s targeted regions or countries will be granted financial incentives for three years,” the spokesperson added.
To encourage airlines to use the HKIA Dongguan Logistics Park (HKIALP) for air cargo operations, the same offer will apply to incremental cargo flights provided all cargoes on board are accepted at HKIALP in Dongguan, located some 90km north of Hong Kong in Guangdong Province, China.
The programme has received positive responses from airlines since its launch in June.
The AAHK spokesperson told Asia Cargo News that eight airlines added 11 new routes and 54 weekly flights connecting HKIA as of September 2024 after the launch.
“HKIA has long been a leading long-haul flight hub in the region. The short-haul flight network is developing steadily and we wish to further strengthen the long-haul flight market. North America, Western Europe and Australasia are the traditional long-haul flight markets which are crucial to the connectivity of HKIA for both passenger and cargo flights,” the spokesperson said.
“Apart from these three regions, we also targeted Brazil, Ethiopia and Mexico for cargo routes as these are emerging markets which have strong demand for shipment [to and from] Asia. We see the potential of these markets and wish to seize these opportunities in advance.”
Passenger traffic at HKIA is recovering steadily. In August 2024, daily passenger traffic reached a post-pandemic high, with the airport handling more than 170,000 passengers on August 18, representing 80% of the pre-pandemic levels.
In addition, flight movements have recovered to 90% of the pre-pandemic levels.
The spokesperson said it is estimated that the daily passenger volume will recover to the pre-pandemic levels by the end of this year. At the same time, the total annual passenger volume is projected to reach around 60 million, which would also boost bellyhold air cargo capacity.
“On the cargo front, HKIA’s cargo volume continues to grow, recording double-digit year-on-year growth in the first eight months of 2024.”
AAHK figures showed that cargo throughput in August was up 10.6% year-on-year to 406,000 tonnes. This was mainly driven by export traffic, which was up 14.6% compared to the same month last year. Among key trading regions, cargo traffic to and from key trading regions in Europe, Southeast Asia, and the Middle East increased most significantly in the month.
For the first eight months of the year, HKIA handled a 16.5% increase to about 3.2 million tonnes, and on a 12-month rolling basis, cargo throughput reported a growth of 15.9% to about 4.8 million tonnes.
Chapman Fong, deputy director of airport operations at AAHK, previously explained that under the two-year new route scheme, any passenger and cargo airlines that introduce new destinations connecting to HKIA for “at least 20 consecutive weeks” are eligible to receive financial rewards. However, the reward will be reduced by half in the second year of the new route’s operation.
The strategic development scheme will provide financial incentives for major long-haul routes, including flights to North America, Europe, Australia and New Zealand. Any passenger and cargo airline that initiates new routes or increases the frequency of flights to these targeted regions will receive rewards for three years. The reward will be reduced to 75% in the second year and 50% in the third year.
The deputy director of airport operations at AAHK mentioned that the reward for both schemes would be calculated based on the aircraft’s maximum payload, which is HK$70 (US$9) per tonne. This could add up to HK$8 million (US$1.03 million) per year for airlines that launch a new daily route as part of an effort to fill up the extra capacity created by a third runway.
“For example, flights with a weight of 300 to 400 tonnes could receive HK$10,000 to HK$20,000 (US$1,285 to US$2,575) per trip, meaning the airline could receive HK$7 million to HK$8 million (US$900,000 to US$1.03 million) for each new route per year,” Fong explained.
Meanwhile, the spokesperson for AAHK emphasized the role of the airport’s new third runway and the HKIALP in Hong Kong’s plan further to strengthen its position as a major global hub.
“Currently, air travel demand in Hong Kong is strong. We aim to catch this opportunity and attract more airlines to increase the flight frequency and routes connecting Hong Kong, further enhancing the connectivity of HKIA. With the commissioning of the Three-runway System (3RS) by the end of 2024, we expect to boost HKIA’s capacity and attract more tourists to visit Hong Kong,” the spokesperson told Asia Cargo News.
The spokesperson said work on the 3RS project is progressing steadily, with all three runways expected to be in operation by the end of 2024.
The spokesperson noted that the 3RS will enable the airport to handle 10 million tonnes of cargo annually and 120 million passengers to meet the demand forecast for 2035.
Also, with three runways operating, the airport’s runway capacity would increase to a maximum of 102 air traffic movements per hour.
“We have always been an important cargo gateway in the Greater Bay Area. Three-fourths of the international cargo in the Greater Bay Area is transhipped to other parts of the world through HKIA. Therefore, the programme also specifically includes the transportation of cargo from the HKIALP,” the AAHK spokesperson said.
The HKIALP Pilot Scheme officially started operations in April 2023. Under the Sea-air Intermodal Transshipment Initiative, cargo security screening, palletization, and airline acceptance for export cargo of Greater Bay Area (GBA) can be completed upstream in Dongguan, complying with Hong Kong’s air cargo regulations.
The cargo will then be transported by vessels to the restricted area of HKIA, where it will connect directly to flights departing from HKIA to destinations worldwide.
The Northbound Import Service was also launched in December last year. Shipments from overseas can be imported into mainland China via HKIA and the logistics park.
The AAHK spokesperson said that as of September 2024, the total value of the HKIALP handled has exceeded Rmb$10 billion (US$1.4 billion). Currently, 21 airlines and more than 100 freight forwarders can provide services at the HKIALP.
“The permanent facilities of the HKIALP will complete the first-phase construction by the end of 2025. When the project operates smoothly, it is expected that the handling time will be reduced by one-third and operating cost by half upon completion. This would further reinforce HKIA’sHKIA’s position as the Busiest Cargo Airport of the World,” the AAHK spokesperson told Asia Cargo News.
Vivian Cheung, acting chief executive officer of AAHK, said earlier that air network connectivity is pivotal to an international aviation hub like HKIA.
“While we are confident in HKIA’s development in the long term, the new programme serves to encourage home-based and foreign airlines to bring forward their launch of new routes and/or increase in the frequency of flights connecting to HKIA,” she added.
By Charlee C. Delavin
Asia Cargo News | Hong Kong
