The Government has agreed that Hong Kong should adopt a more liberal aviation regime to develop the air transport industry and boost its bid to become the region's premier logistics hub, according to Airport Authority chief executive David Pang. Mr Pang said on the sidelines of the Asia-Pacific Economic Co-operation Forum meeting in Shanghai that he had discussed the issue with the Economic Services Bureau - spearhead of the SAR's new logistics initiative - which agreed liberalisation was the right direction. Details had yet to be finalised but from the authority's point of view, Mr Pang hoped it would happen as soon as possible. His remarks came after weeks of growing pressure from the aviation industry for the Government to open the skies. Express operators such as Federal Express and United Parcel Service had said Hong Kong's logistics dream would never be realised unless the bureau, which controls aviation regulations, allowed airlines greater flexibility to improve trade flow. Passenger and air cargo volumes at the airport have been on the wane for most of the year, with analysts saying the industry was in need of a boost. The airport's largest cargo handler, Hongkong Air Cargo Terminals (Hactl), yesterday said its figures for the third quarter suggested volumes were declining at 13.4 per cent a year. Hactl, which handles 80 per cent of the freight moving through the airport, attributed the fall-off to continued weakness in the export trade to the United States and key Asian countries such as Japan, South Korea and Taiwan. However, there might be some positive signs. 'There are some indications the rate of volume decline is stabilising in the short run, but the pace of economic recovery, particularly in the US, is very uncertain at the moment,' said Hactl director of marketing Summit Chan. 'However, it is best described as a period of uncertainty, not doom and gloom.' Air cargo is considered a significant economic indicator, because of the high-value nature of the goods transported. Analysts say shifts in the amount of goods flying by air, as opposed to the lower-value goods that largely move by sea, reflect consumer confidence and the money available for non-essential items. Cargo moving to the US led the quarterly downturn, shrinking 22 per cent year on year. In the first three quarters, Hactl handled 1.12 million tonnes, down a year on year 10.1 per cent. Mr Chan is fairly sure Hactl will post negative volume growth for the full year. It would be the first time overall throughput at Chek Lap Kok has declined since the height of the Asian financial crisis in 1998, when throughput fell 8.5 per cent, according to Civil Aviation Department figures. The following year it rebounded to post more than 20 per cent year on year growth as the economy recovered strongly. For September, the month of the terrorist attacks in Washington and New York, volume shrank 11.1 per cent, to 139,120 tonnes. 'Volume throughput during the latter half of September held up reasonably well after the resumption of flights linked to North America,' Mr Chan said. 'This was, however, mostly due to the pre-National Day holiday rush.' He said there was no indication the terrorist acts had had a lingering effect on freight volumes at Hactl. 'The size of the decline is not bigger than it was before the September 11 attacks,' he said. 'It is not getting progressively worse. That is the message we are getting. The key question now is what we will see in the first quarter next year. 'The bright spots could be the promise that China's domestic growth holds and intra-Asia may bounce back after quite a bad year this year. It really depends on the effectiveness of the stimulus packages that are being mounted across the region.' Hactl posted double-digit decline in almost all key regional sectors in the third quarter, with the exception of China, which grew 3.8 per cent. However, all eyes remain firmly focused on the US market for the first signs of recovery, and as yet there is no relief from across the Pacific.