Financial Secretary: ‘Airport City’ to Make Hong Kong Gateway of Choice for Travelers

Hong Kong is banking on the strategic development of Hong Kong International Airport into an “airport city” and the vast economic potential of the Guangdong-Hong Kong-Macao Greater Bay Area to boost the city’s economic growth and ascend to greater prosperity, Financial Secretary Paul Chan Mo-po said on Aug. 20.

With the support of the Hong Kong Special Administrative Region government, Airport Authority Hong Kong has launched a strategic development blueprint to promote transforming HKIA from a “city airport” to an “airport city” that would serve as a new commercial landmark for the territory, Chan said in his blog.

“The airport will no longer be just a place for passengers to enter, exit or transit, but will combine aviation and different economic functions to become a commercial landmark or even a leisure resort, so that more economic activities can be driven at the airport,” he said.

Chan said the 25-hectare SKYCITY commercial development project — just a stone’s throw from the airport — is important to the building of an “airport city.”

With a total floor area of 35,300 square meters, the project’s highlight, 11 SKIES, will provide a series of innovative entertainment, retail and dining options, as well as commercial offices to develop medical, healthcare, financial and other services.

Also, the second phase of the adjacent Asia World-Expo will offer an advanced stage venue with more than 20,000 seats and more exhibition facilities when it becomes operational.

“SKYCITY will be an important tourist facility and contribute to Hong Kong’s overall tourism economy,” said Chan.

There will also be fresh growth opportunities in the Greater Bay Area. With a population of almost 87 million, and a gross domestic product per capita exceeding $22,000, the region is a huge source of tourist spending. Before the COVID-19 pandemic, up to 14 million passengers from the Greater Bay Area’s 11-city cluster used HKIA for travel around the world annually.

With the completion of many large-scale cross-boundary infrastructure projects, such as the Guangzhou-Shenzhen-Hong Kong Express Rail Link and the Hong Kong-Zhuhai-Macao Bridge in recent years, HKIA has built up a close, multi-dimensional sea, land and air transport network with the entire Greater Bay Area.

“In the future, we will further optimize the network and operation of ‘multimodal transport,’ fully utilizing Hong Kong’s status as the regional aviation hub of the Greater Bay Area, and become the gateway of choice for mainland and international tourists traveling to and from the Greater Bay Area,” the finance chief said.

When the airport’s SkyPier Terminal goes into service, transit passengers crossing the HZMB to HKIA can go directly to the airport’s restricted area and board their aircraft without having to go through immigration procedures in the SAR. Airport Authority Hong Kong will also further expand the airport’s waiting network in cities on the Chinese mainland, increasing the number of such outlets from the current 19 to 30.

In freight logistics, the sector’s new operations model in recent years has also provided new sources of growth for HKIA. With online shopping becoming a major trend in global consumption, this new business model has high quality requirements and is most beneficial to expensive commodities like fresh food and medicines, creating huge opportunities for the airfreight industry.

Hong Kong’s air cargo volume reached 4.2 million tons last year, accounting for just 2% of the total freight volume handled, but contributing 48% to the city’s total trade value.

“It can be seen that high-value and high-end air cargo logistics is a sector we must fully seize on, and whose services must be continuously improved,” Chan said.

The “Central Asia Hub” project undertaken by Airport Authority Hong Kong and global express cargo carrier DHL has been in operation since March this year. The capacity of the project’s automated cargo handling system has surged by 50% to 1.06 million metric tons per year.

The high-end logistics center, built and managed by a joint venture company led by Cainiao Network, will also be put into use this year and would be able to handle an additional 1.7 million metric tons of air cargo volume annually.

Airport Authority Hong Kong is further working with Dongguan to develop a new “sea-air cargo intermodal transport” model that would enable security checks, as well as packing, palletizing and receiving procedures for mainland exports, to be completed in Dongguan before the freight is directly transported to HKIA by sea, and immediately transferred to all parts of the world.

This would reduce operating costs by about half and loading and unloading time by one-third. “It is a win-win arrangement and can enhance the freight competitiveness of the entire Greater Bay Area,” Chan said.

He said the pace of recovery in Hong Kong’s aviation sector has been good. He expects passenger traffic at HKIA to bounce back to about 80% of pre-pandemic levels by the end of this year, and fully recover next year.

At present, about 110 airlines operate flights to and from 165 destinations worldwide at HKIA, reaching about 75% of pre-pandemic levels.

Chan said it is important to fill the manpower gap in the aviation business to support its recovery. The first round of applications by 28 companies for new personnel in the aviation sector has been approved, with more than 2,800 positions filled, covering ground staff, ramp attendants, and aircraft maintenance technicians. The employees are expected to arrive in Hong Kong from October this year.

According to Chan, HKIA’s three-runway system will be completed by the end of 2024. By then, the airport’s passenger flight handling capacity would go up significantly by about 50%, receiving 120 million passengers a year.