Airport chief focuses on the need for competition
COMPETITION will characterise the new airport at Chek Lap Kok, according to the Provisional Airport Authority's (PAA's) commercial and operations director.
''The more people that are involved in the delivery of any service, the more efficient it becomes, the less it costs, and the more profitable it can be for everyone,'' said Richard Judy.
In an interview last week, Mr Judy said he hoped three licences would be awarded for each of the four major ground-handling services at Chek Lap Kok: cargo, catering, maintenance, and fuel.
''We want to grow competition at the airport. The same pie will get twice as big,'' he said.
Mr Judy served as the director of Dade County Aviation Department, which runs Miami International Airport, from 1971 to 1989, becoming a well-known advocate of competition.
''When you run an airport at a low-cost structure, you have the ability for the air carriers serving the airport to expand their scheduled service and build highways in the skies,'' he said.
''People must visualise an airport as a terminus of these highways. The more we construct, the more opportunity we have to move our products at high speed to the various marketplaces of the world and capitalise on a competitive edge.'' Interest has been expressed from four groups in the air cargo operation, eight groups in aircraft catering, five groups in aircraft maintenance, and four groups in the aviation fuel service.
The groups are being required to present creative plans that would enable them to compete for the rights to finance, construct, and operate the airport facilities.
Now involved in the complex exercise of sorting through the applications, Mr Judy said the PAA was scheduled to award licences for the four main ground handling services in early 1994.
''We will decide how many licences to issue, and we want to have at least three licences for each service,'' he said.
Perhaps the most complex question facing the PAA's commercial planning department is the award for the terminal processing of air cargo.
The Hongkong Air Cargo Terminals Limited (HACTL) facility at Kai Tak is a monopoly, yet it is regarded as highly efficient by world standards.
''There are appropriate ways we can implement and deal with monopolies at the airport that can maintain very low-cost profiles,'' he said, adding: ''I just don't happen to think they are the best [monopolies]. Every regulated industry becomes inefficienteven though, when you look at the model, the monopoly is the best.
''I think it is better to rely on the marketplace to discipline the servicing.'' Speaking about his time at Miami International Airport, Mr Judy said he did not believe in giving huge long-term leases and franchises.
''I believe the infrastructure of the airport leasing in Miami belonged to the people, and not to any private sector entity. They should gain from it, not rip it off for their own private use,'' he said.
''We have an opportunity to build a very cost-effective airport with tremendous revenue power to use for the better welfare of the community and for its shareholder, which is the Government. The challenge is to use that very wisely.
''Hongkong has been gifted with a great opportunity to develop one of the great airports of the world. We should not let the people down by not building an efficient airport. If we take more than we should because of inefficiency, we are taking it from all those who we are serving. There is no free lunch.''