Airport Authority to jointly manage Hongqiao airport

PUBLISHED : Tuesday, 13 October, 2009, 12:00am
UPDATED : Tuesday, 13 October, 2009, 12:00am

The Airport Authority Hong Kong is to team up with its Shanghai counterpart to co-manage Shanghai Hongqiao Airport as it seeks to further integrate itself with the mainland.

The joint venture, in which Hong Kong is acquiring a 49 per cent stake while Shanghai holds the rest, would help the Shanghai airport to improve its operations in the run-up to the World Expo next year, said Shanghai mayor Han Zheng.

'We have the necessary hardware, but what we are concerned about is the software,' Han (right) said after a signing ceremony held in the city yesterday.

'This is where we hope Hong Kong can help.'

Chief Secretary Henry Tang Ying-yen said the venture was a good example of collaboration between Hong Kong and mainland industries.

'I believe Hong Kong and Shanghai will have many different areas where they can co-operate in the future,' Tang said.

The management company will run the two terminals, the retail business in the terminals and the traffic control centre in Hongqiao.

This is the third mainland airport project that the Airport Authority has invested in. It has invested in Hangzhou Xiaoshan International Airport and formed a joint-venture management firm in Zhuhai Airport.

However, the co-operation with Hongqiao, one of the country's top five airports, is more important to the Airport Authority.

'The joint venture will help [us] better understand the operations of mainland airports and gain experience in managing and operating a national hub facility,' said Stanley Hui Hon-chung, the chief executive of the authority.

The authority would provide experienced management professionals to upgrade the airport's operating procedures, similar to an arrangement that helped Beijing airport during the Olympic Games last year, Hui added.

Hongqiao, which has been operating for 88 years, is one of two airports in Shanghai focusing on domestic routes. Shanghai Pudong International Airport also serves a mix of international and domestic routes.

No Hong Kong airlines fly to Hongqiao but Airport Authority chairman Marvin Cheung Kin-tung said the investment made good financial sense.

'Both Shanghai and Hong Kong are the mainland's major aviation hubs. The development and management experience of the two airports are invaluable to each other,' Cheung said.

When building of a second runway is completed next year, Hongqiao expects passenger throughput to exceed 30 million a year in 2015 from 22.88 million last year, representing 31 per cent growth. Cargo volume will grow 2.4 times to one million tonnes from 415,700 tonnes.

By combining with Pudong airport, Shanghai will have five runways and four terminals for a combined annual capacity of 90 million passengers and 5.2 million tonnes in cargo volume by next year.

Hong Kong could not afford to miss out on the mega development plans of mainland airports, said one market observer. 'Otherwise, it will be marginalised.'