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Airport has real growth potential

I refer to Paul Zimmerman’s article (“Airport plan can’t take off without reliable growth forecast and cost-benefit analysis”, June 18).

The air traffic forecast made for Hong Kong International Airport’s Master Plan 2030 by Iata Consulting is based on gross domestic product, the most reliable and proven indicator known to the industry. Over the past 40 years, global air traffic has demonstrated a strong correlation to global economic growth as measured by GDP. Hong Kong has an even stronger correlation because of its externally oriented economy.

Air traffic grows because of economic, not population, growth. As economies grow, trade and business activities increase, boosting the need for air travel. Airbus projects emerging travel markets will comprise 68 per cent of global air travel by 2029, up from 55 per cent in 2010.

It is critical to note the important contribution of transfer (or connecting) and transshipment traffic alongside origin-destination traffic. Iata Consulting’s air traffic forecast for Hong Kong airport employed a robust, GDP-based linear regression model that was developed after extensive testing of variables using simple, multiple linear and log regression models, and a review of market trends. In 2010, around one third of the airport’s passenger traffic was connecting, while approximately 20 per cent of cargo traffic was transshipment. This traffic mix is projected to be similar in 2030.

Connecting traffic — illustrative of air hub status – brings as much value to Hong Kong as origin-destination traffic because it helps preserve and enhance the airport’s extensive network, connectivity and frequency. Each flight typically carries both origin-destination and transfer/ connecting traffic. In addition, transfer traffic helps airlines operate new routes and build higher frequencies, which in turn helps the hub airport stay competitive with a bigger network and more flights. Travellers then benefit from more choice, destinations and frequency, and even lower fares because of it.

Transshipment also contributes greatly to Hong Kong’s economy, one of the most trade-dependent in the world. Hong Kong airport is the dominant international cargo gateway for South China, and Mr Zimmerman is correct that we handle around 90 per cent of the greater Pearl River Delta’s international cargo throughput. This supports Hong Kong’s leading regional role in trade and logistics, an industry that contributed 26 per cent of Hong Kong’s GDP and employed more than 800,000 people in 2008. It would be hard to imagine the impact on Hong Kong people’s livelihoods if we turned away future cargo and trade activities currently supported by the airport.

A comparison of Hong Kong’s regional market and those of other major cities further demonstrates Hong Kong airport’s tremendous potential. London’s five airports (Heathrow, Gatwick, Stansted, Luton and London City) served nearly 140 million passengers in 2008, while New York’s JFK, LaGuardia and Newark served more than 100 million. Both cities have populations of about eight million. Hong Kong, a city of seven million, located on the doorstep of China, served more than 50 million passengers via its airport alone in 2010, making the enormous growth potential of Hong Kong airport even clearer.

Julia Yan, general manager, strategic planning and development, Hong Kong Airport Authority

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