"Another Hong Kong airport fiasco looms"

Monday, September 23, 2002

Commentary
Another airport fiasco looms
Hong Kong - The Standard


"If you can't beat them, then invest in them" seems to be the current
motto at the Airport Authority when it comes to dealing with competition
from the four other airports in the Pearl River Delta. 

While the authority has still to come clean about its overall
intentions, there have been enough hints, first over Shenzhen and now
about Guangzhou, that it is seriously considering taking stakes in
nearby airports. 

We believe that such a move will be prudent and commercially astute,
provided, of course, sound commercial principles guide these investments
rather than ego or any sense of megalomania. 

Because, while it may sound premature to talk about saturation and
over-capacity in relation to Chek Lap Kok airport, that is what it will
eventually face. It may take just 10 years, according to some forecasts,
or it may take 25 years, but the fact is the number of aircraft landing
and taking off at Chek Lap Kok will reach capacity sooner or later. What
happens then? A third runway? A new airport, even a small facility
handling regional traffic? Both are unlikely given the strength of
feeling to protect the environment, not to mention the practical
limitations of possible flight paths. 

Consequently, the most obvious scenario is that Hong Kong loses this
further growth in air traffic to neighbouring facilities in the Pearl
River delta. 

So, taking a leaf out of Li Ka-shing's book, with his investments in a
network of Pearl River delta ports, David Pang and Victor Fung want to
ensure the authority earns at least something from this loss of
business. While Chek Lap Kok may lose the revenue from passenger
spending and landing and handling fees from the extra flights that may
go to Shenzhen or Guangzhou, at least it should reap the profits. 

Provided, of course, these airports make profits. Airline and aviation
companies fear that they will be saddled with huge fee increases to
cover the authority's subsequent losses.


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