business in hong kong

Galpin appointed as Investment Promotion head

Simon Galpin was appointed as director-general of Investment Promotion.

The Hong Kong Special Administrative Region Government recently announced the appointment of Simon Galpin as director-general of Investment Promotion.

In welcoming Mr. Galpin's appointment, Secretary for the Civil Service Denise Yue said, “Mr. Galpin possesses extensive knowledge and solid working experience in the area of investment promotion, and has proven management abilities. I have every confidence that he will be able to lead Invest Hong Kong (InvestHK) to meet the challenges ahead and serve the community with dedication in his new capacity. I am also confident that the staff of InvestHK will continue to give their best under his leadership.”

Mr. Galpin had worked in a number of private companies responsible for business promotion before joining in 1991 the Scottish Enterprise, the U.K. agency charged with attracting direct foreign investment to Scotland. During his tenure there, he was involved in investment promotion and other aspects of economic development. He was head of its Asia Pacific arm when he left the agency in 2001.

Mr. Galpin joined InvestHK in 2001 and helped establish the department as one of the world’s leading investment promotion agencies. As associate director-general, he held a key role in shaping InvestHK’s strategy and business planning process. Mr. Galpin also has participated actively in the activities of various chambers of commerce and business associations and has established an extensive international business network.

Mr. Galpin’s appointment became effective April 9.

HKIA traffic continues to contract in March

Hong Kong International Airport (HKIA) managed 3.9 million passengers and 268,000 metric tons of cargo in March, representing decreases of 7.9% and 19.8%, respectively, from March 2008. Year-on-year air-traffic movements fell 7.5% to 23,805.

Passenger traffic among Hong Kong residents experienced a yearly decline of 15% during March — mainly due to the busy outbound travel period around Easter falling in April this year, as opposed to March in 2008.

Visitor traffic to and from Hong Kong dropped 9% as the economic downturn continued to affect business and leisure travel. Long-haul markets such as North America and Europe, as well as such regional markets as North Asia and Taiwan, were hit hardest.

The majority of HKIA's markets continued to record double-digit decreases in cargo throughput in March, resulting in the airport’s export tonnage dropping approximately 25%. Key markets, such as North America, Southeast Asia and Taiwan, registered significant yearly declines of over 30%. Imports declined approximately 17% year-on-year, while transhipments fell approximately 9%.

“While the duration or full impact of the current recession remains to be seen, we are confident that its impact on traffic at HKIA will gradually lessen, and the long-term prospect of HKIA stays positive,” Airport Authority Hong Kong Chief Executive Officer Stanley Hui said.

“We will keep investing in our software and hardware to ensure HKIA will be in a position to meet demand when the market eventually recovers and has enough capacity to meet long-term aviation demand and provides a level of service that will continue to set the global standard.”

Cathay Pacific awarded Airline of the Year

Cathay Pacific Airways recently was named Airline of the Year 2009.

Cathay Pacific Airways recently welcomed the announcement that it has been named Airline of the Year 2009 in the World Airline Awards. It is the third time the airline has taken the honor in the past six years. The airline was also named Best Airline Asia in 2009.

The two awards were presented to Cathay Pacific at the Aircraft Interiors Expo in Hamburg, Germany. The 2009 awards were based on the annual World Airline Survey, which London-based Skytrax conducted between August 2008 and March 2009.

“In a global study that proved to be our largest-ever passenger survey, it is truly a great achievement for Cathay Pacific to have secured the ‘world's best airline’ title in 2009. With over 16.2 million completed interviews, drawn from more than 97 nationalities around the world, we pay credit to the fact that Cathay Pacific is clearly delivering a quality of product and service that its customers really appreciate,” Skytrax Chief Executive Officer Edward Plaisted said.

Cathay Pacific has been a consistent winner in the World Airline Awards, taking Airline of the Year honors in 2003 and 2005 and winning plaudits for its lounges in Hong Kong and inflight products. In 2008, the airline earned Best First Class after the introduction of its groundbreaking new cabins.

Airlines see drops in passenger, cargo traffic

The combined March traffic figures for Cathay Pacific and Dragonair show a decline in the number of passengers carried compared to the same month last year and another sharp fall in cargo and mail tonnage.

The two airlines carried a total of 2,096,011 passengers in March, a 3.2% year-on-year decrease. The load factor fell 3% to 79.1%. Capacity for the month, measured in available seat kilometers (ASKs), dropped 0.8%.

In addition, the airlines carried a total of 129,628 metric tons of cargo and mail, down 13.7% year-on-year, while capacity, measured in available cargo/mail metric ton kilometers, fell 10%. The cargo and mail load factor declined 0.3% to 67.9%.

Cathay Pacific General Manager-Revenue Management Tom Owen noted overall passenger numbers and load factors both showed declines from last year's high base, which included the Easter holiday. “Leisure traffic held up relatively well in terms of volumes, particularly on long-haul routes, although customers are only willing to travel at the much lower fares available in a highly competitive marketplace. This, combined with the ongoing malaise of premium-cabin demand and adverse currency movements, continues to exert considerable downward pressure on yields,” he said.

Cathay Pacific General Manager-Cargo Sales & Marketing Titus Diu said the sharp drop in tonnage compared to the previous year highlights the continued weakness of the global airfreight business, and the fierce competition in shrinking markets is putting tremendous pressure on the airline’s cargo yield.

“The market out of Hong Kong continues to be hit by a fall in production in the key Pearl and Yangtze river delta areas,” he added, “though our business to and from the United States received a lift from the launch of a new service to Miami and Houston, which is giving us greater access to the important South American markets.”

Cathay Pacific to cut service, add furloughs

Cathay Pacific Airways has announced a series of measures that will help the airline deal with a drop in business resulting from the current economic downturn. In response to deteriorating business conditions, the airline will reduce passenger capacity 8% and overall cargo capacity 11%, beginning in May.

At the same time, in a further effort to reduce cash outlays, the airline will introduce a four-tier, top-down Special Leave Scheme, under which staff will be asked to take unpaid leave, varying from one to four weeks according to seniority.

Cathay Pacific conducted a thorough review of every route before making the capacity reductions. On the passenger side, there will be fewer flights or lower seat capacity to London, Paris, Frankfurt, Sydney, Singapore, Bangkok, Seoul, Taipei, Tokyo, Mumbai and Dubai. However, flights will be added to Denpasar, Indonesia; Sapporo, Japan and Bahrain/Riyadh, Saudi Arabia.           

Sister airline Dragonair will see a 13% cut in capacity.            

The cargo operation will experience an 11% cut in available metric ton kilometers — the measure of cargo capacity — through reductions in freighter operations and freight carried in the bellies of passenger aircraft. The weekly freighter frequency will fall to 84 flights — down from 124 during 2008’s peak.            

The company is negotiating the sale of five aircraft and will park two additional Boeing 747-400BCF freighters, taking the total to five. It will also wet-lease one BCF to subsidiary Air Hong Kong.