Completion of 3rd cargo terminal to be deferred
Cathay Pacific Services Limited (CPSL), a wholly owned subsidiary of Cathay Pacific Airways Limited, signed a supplemental agreement January 15 with the Airport Authority Hong Kong (AAHK) to defer the completion of its new cargo terminal by a maximum of 24 months to mid-2013.
CPSL applied for the deferral of the cargo terminal after market conditions deteriorated further with the global economic downturn. The deferral is aimed at better matching supply and demand in the airfreight business given the current market outlook. It is also important for the company to maintain a strong balance sheet until the market strengthens.
A Cathay Pacific spokesman emphasized that Cathay Pacific remains completely confident in the future of Hong Kong as an international air cargo hub.
“Cathay Pacific remains fully committed to building and operating the third cargo terminal,” he said, adding that under the agreement, CPSL will compensate the AAHK for the deferral. While the company is not at liberty to disclose commercially sensitive information, it considers the compensation amount to be fair and reasonable.
Slight decrease in December passenger traffic
Combined December traffic figures for Cathay Pacific and Dragonair show a slight decrease in the number of passengers carried compared to the same month in 2007, despite a capacity increase and a substantial fall in cargo and mail tonnage.
In December, the two airlines carried a total of 2,110,719 passengers — down 0.3% year-on-year, while the load factor dipped by 1.8 percentage points to 79%. This compares to a 4.7% rise in passenger capacity, measured in available seat kilometers (ASKs), for the month. For 2008 as a whole, the number of passengers carried was 24,959,429, a 7.3% rise, compared to a capacity increase of 12.7%.
Cathay Pacific and Dragonair carried a total of 115,232 metric tons of cargo and mail last month, down 23.9% on December 2007, while capacity, measured in available cargo/mail tonne kilometers, fell 14%. The cargo and mail load factor dropped by 5.7 percentage points to 62.9%. For the year as a whole, cargo and mail tonnage fell to 1,644,785 metric tons — down 1.6% compared to a capacity rise of 0.7%.
HKIA ends 2008 with mixed traffic results
Hong Kong International Airport (HKIA) reported a 1.7% increase in passenger throughput and a 3.1% decline in cargo traffic in 2008, compared to 2007, reaching 48.6 million and 3.6 million metric tons, respectively. Air traffic movements grew 2% to 301,285 during that period.
Passenger traffic maintained steady growth in the first seven months of 2008, registering a 6% rise over the same period in 2007. However, it saw a 4% drop over the last five months of 2008, which was partly due to the tightening of mainland China visa applications for foreign tourists following the enhanced security requirements for the Beijing Olympics. Other contributing factors include the financial tsunami and subsequent economic downturn, which caused companies to cut costs by curbing business trips and holidaymakers to reduce travel amid rising uncertainties.
The global financial turmoil and the resulting shrinkage in foreign trade also dealt a heavy blow to demand for freight services, and air cargo was no exception. In December, HKIA saw cargo throughput plunge 28.2% to 243,000 metric tons — the largest single-month drop since the airport's opening in 1998.
December's passenger traffic fell 5.3% year on year, to 4 million, with routes to and from Southeast Asia, Taiwan, the Chinese mainland and North America recording the biggest drops. Air traffic movements also declined 3.3% over December 2007, to 24,775.
Chief Executive Officer of the Airport Authority (AA) Stanley Hui said 2008 was very tough for the aviation industry, with skyrocketing oil prices in the first half of the year followed by the financial tsunami and the ensuing weakening demand for travel and air cargo services in the second half.
“The foreseeable future in 2009 will remain challenging, as the full effects of the recession are felt here in Hong Kong and across the globe,” he said. “However, we hope to see the economy gradually stabilize in the latter part of 2009. While the near-term uncertainties will continue to pose challenges, we remain confident over the long-term traffic performance of HKIA. And we are as committed as ever to maintaining Hong Kong’s status as a regional and international aviation center, serving the overall economic development of Hong Kong and mainland China. We will continue to work closely with our business partners to enhance services at HKIA with a view to better meeting the changing needs of passengers and logistics providers.”
Several expansion and improvement projects currently under way are scheduled to be completed in 2009. These include the North Satellite Concourse, the permanent SkyPier ferry terminal and the Permanent Aviation Fuel Facility. The study for HKIA Master Plan 2030 began last year and will be completed in mid-2009, after which it will be released following approval by the AA Board.
In addition, the AA will continue to render its full support to government-led infrastructural projects such as the Hong Kong-Zhuhai-Macao Bridge and Tuen Mun-Chek Lap Kok Link, and the feasibility study for the HKIA-Shenzhen Airport Rail Link. All of these initiatives will enhance HKIA’s local and cross-boundary accessibility, hence bringing busier passenger and cargo flow to Hong Kong and strengthening HKIA’s competitiveness in the long run.
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