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Mission in need of control

THE PAST YEAR has seen a major change in the dynamics of the Pearl River Delta's aviation market. It came on August 2, with the opening of the 20-billion-yuan Baiyun airport in Guangzhou.

Though it is still too early to tell what the impact will be on the delta's undisputed international gateway, Chek Lap Kok, the massive new competitor's stated ambitions are enough to get the hand-wringing going again among regional airport executives.

Passenger throughput in Guangzhou is running at about 16 million per year, but this should be 'eventually' increased to 80 million, officials claim. That would be more than double Hong Kong's current annual throughput of about 36 million passengers.

Moreover, Guangzhou mayor Lin Shusen has gone on record to say that he expects an increasing number of international businessmen to use the new facility, about 40 minutes drive north of the provincial capital, rather than fly via Hong Kong.

There are just 22 international flights leaving Guangzhou, but an official from the airport's management said this was projected to double within the next three years.

If Mayor Lin thought his bravado would cower his counterparts in the delta, however, he was mistaken. News has emerged since the Baiyun opening that Shenzhen has huge plans of its own.

Not content with the second terminal that opened at its Baoan International Airport this year, which was needed to handle soaring passenger loads, the city is believed to be planning a second runway and a third terminal. Currently, it is the mainland's fourth busiest airport, projected to handle 12 million passengers this year.

Hong Kong, meanwhile, despite making assuring public noises about the benefits of collaboration in the city's hinterland, has not been sitting on its hands. The airport's 'fly via HK' advertising campaign has become more high-profile on the other side of the border in the past year, while direct ferry and bus services from Guangdong cities to the Hong Kong airport have been growing (see Page 7).

Chek Lap Kok is also on track to open a massive new convention and exhibition centre, which will compete not only with the one in Wan Chai, but the huge new Shenzhen International Exhibition Centre that opened last month.

Put all of these regional ambitions together with the fact that the Zhuhai international airport, right next to Macau on the western side of the delta, is still running at a fraction of capacity, and the perennial question facing airport executives seems unlikely to go away anytime soon: Will the region be able to generate enough traffic in the coming years to make these investments worth while?

Armchair critics would say no, but vague economic growth statistics on the mainland make it difficult to accurately project long-term passenger growth rates. And despite their innate competitive natures, there does appear to be growing recognition of the common challenges faced by regional airport planners.

As Stephen Lam, Hong Kong's secretary for constitutional affairs, points out in an interview (see Page 5), officials on both sides of the border are meeting regularly, at the highest levels of policymaking, and at the practical, working-group level, to discuss issues of common concern.

Avoiding unnecessary duplication of transport infrastructure facilities is high on the priority list.

It's also not clear that competition between Guangzhou, Shenzhen and Hong Kong is necessarily unhealthy. Hong Kong has many times Guangzhou's international connections, while Guangzhou is obviously better positioned as a domestic hub for southern China. Shenzhen, meanwhile, has its own attraction as a base for low-cost airlines, as it is evenly positioned between Hong Kong and Guangzhou.

Indeed, although previous media speculation about negotiations between the Hong Kong Airport Authority and its counterparts in Zhuhai and Shenzhen has died down, their common interests do appear more obvious day by day.

For one thing, the booming regional economy has everyone revising previous growth forecasts. Macau's influx of international casino operators and Hong Kong's launch of Disneyland next year are expected to bring tens of millions of new passengers to the delta, from within and without China.

They will come through all of the region's major airports for various reasons, and it is in the interests of each to make sure they are connected to the others.

Another factor pulling the region together is the common threat of the Yangtze River Delta.

The central government has made it clear that future international hub ambitions will be focused on the Beijing and Shanghai airports, to serve the eastern and northern parts of the country.

The area around Shanghai has apparently begun to pull noticeable amounts of foreign investment away from the south, which could herald a longer-term shift in passenger and cargo flows.

For now, however, all of this is in the realm of theorists. The day to day business of moving people and cargo by air through the delta is being conducted by pragmatists. And from where they sit, the outlook for business has never been better.

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