FedEx head calls on SAR to relax aviation services rules

PUBLISHED : Wednesday, 12 July, 2000, 12:00am
UPDATED : Wednesday, 12 July, 2000, 12:00am

Senior executives at Federal Express (FedEx) have warned Hong Kong to adopt a more liberal aviation policy or risk losing ground to the Philippines.

Its AsiaOne hub is in Subic Bay, the Philippines.

David Cunningham, president of FedEx's Asia-Pacific division, said the company would not consider relocating its Asian hub to Hong Kong until the Government changed the rules concerning aviation services.

Mr Cunningham said the company was 'very happy with the Philippines', describing its Manila hub as a 'phenomenal operation, with the right infrastructure and right people to support it'.

He said if Hong Kong did not liberalise its aviation policy, it risked losing even more ground to mainland hub cities.

Mr Cunningham said the mainland had proven willing to invest in express-cargo facilities and to improve services.

FedEx operates a gateway facility in Shenzhen.

The company plans to expand in the mainland, but was waiting for approval from the relevant authorities, he said.

Meanwhile, the express service provider yesterday announced it would launch in September a direct-flight service connecting its European and Asian hubs.

Mr Cunningham said the service was in response to growing demand for reduced transit times in key global markets. Business volume in these two markets grew 20 per cent to 30 per cent in the final quarter last year, he said.

Demand for express services was also being fuelled by e-commerce.

According to Boeing's statistics, the value of the volume of express services would increase fourfold to US$280 billion from US$70 billion.

A recent study by McKinsey estimated that the percentage of manufactured goods transported across borders would increase to 80 per cent by 2020 from 20 per cent at present, he said, signalling the rapid growth expected in the industry.

The company would make these services without adding to its aircraft fleet, nor would it have to open significant new sorting facilities.