• Fri
  • Oct 24, 2014
  • Updated: 4:43am

Chek Lap Kok likely to keep its edge over the new rival

PUBLISHED : Tuesday, 03 August, 2004, 12:00am
UPDATED : Tuesday, 03 August, 2004, 12:00am
 

But Baiyun airport's links to mainland market, and lower costs may cause concern


Chek Lap Kok will face the biggest challenge of its six-year history this week when Baiyun International Airport opens for business.


Baiyun is an impressive facility and the aim of its builders is to help Guangzhou compete squarely with Shanghai and Hong Kong as gateways for tourism and commerce into and out of the mainland.


The first phase, comprising two runways and a terminal building able to handle more than 25 million passengers a year and 1 million tonnes of cargo, will accept its first flights on Thursday. Developments over the next three to five years will allow it to double its capacity.


Like Chek Lap Kok, Baiyun's structure is modern and forward-looking. Visitors will be impressed by its scale, as well as the city and provincial governments' 20 billion yuan commitment.


The opening of Baiyun comes as the Hong Kong Airport Authority, which operates Chek Lap Kok, prepares for privatisation and a public listing on the stock exchange.


The timing has led some to fear that Chek Lap Kok's privatisation plans will be irreparably damaged and that it will become a white elephant in the face of competition.


Airfares are cheaper on the mainland, largely because its residents don't yet have the spending power of Hongkongers. Baiyun's operators have also promised lower operating costs for airlines.


This will draw more international airlines to Guangzhou and, some argue, will also attract Hong Kong travellers taking advantage of lower prices.


But other critical factors suggest Hong Kong will maintain its lead as an aviation hub.


Baiyun is big, but Chek Lap Kok is already bigger and growing. The airline industry is capital-intensive and critical mass is an important component when airlines decide where to fly.


Chek Lap Kok already handles about 45 million passengers and 3 million tonnes of cargo a year and plans have already been finalised to raise that capacity over the next decade to 87 million passengers and 9 million tonnes of cargo.


The Hong Kong airport already handles more passengers and cargo than Baiyun's capacity under its present configuration.


Chek Lap Kok is also far ahead on connectivity, with links to 150 international cities and 42 mainland cities by nearly 80 airlines.


Baiyun is connected to just 22 international cities, but more than 72 mainland cities.


In terms of domestic links, Chek Lap Kok has trouble matching Baiyun, if only because the central government has been slow to grant Hong Kong access rights to mainland routes. Baiyun is nearly matched by Shenzhen's airport in this regard, and all three facilities share a common catchment area.


The Guangdong government is not blind to Baiyun's shortcomings as an international hub. Officials fret that it will have difficulty attracting international airlines because of Hong Kong's close proximity and the central government's emphasis on securing more international services for the Beijing and Shanghai airports.


As a catchment market for outbound passengers, Guangzhou does hold good growth potential. Guangdong province has the most prosperous population in China, while Guangzhou's 10 million residents will prove to be a good market as incomes rise and more people can afford foreign holidays.


Even so, Baiyun must also compete with the Shenzhen, Hong Kong and Macau airports.


It is too soon for Chek Lap Kok to be worrying.


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