Vivian Cheung, chief operations officer at Airport Authority Hong Kong, discusses the latest development projects at Hong Kong International Airport that are ensuring the country is ready to welcome back visitors from around the world.
What was the impact of Covid-19 on your operations and how have things improved?
Covid-19 impacted us very much – our traffic went down to 2% of 2019 levels but now we are at about 45%. We expect that by the end of this year we will be back to 80% of 2019 levels, and by the end of 2024 we will be at 100%.
What projects are you working on at the moment?
For the past three years, we have not stopped. We took the opportunity during Covid-19 to speed up some of our projects and introduce some new projects to make sure we can improve efficiency and capacity while we had fewer passengers – it was more convenient to complete those projects while traffic was down. Our aim is to add capacity and functionality, to diversify our revenue streams and, most importantly, improve the customer experience.
In terms of expansion, one of the most important projects right now is the development of our three-runway system – we started that project six or seven years ago and the new runway is now complete and in operation. By the end of next year, that project, including the three runways, new concourse and expanded passenger terminal, will be completed.
We are expanding in our cargo services – we have investments coming from DHL, Alibaba and China Post and we are enhancing our cross-border and e-commerce capabilities. To make sure we are the number one cargo handler in the world, we have also invested a lot in upstream services where we collect the cargo from mainland China – we do the whole process from collecting to security and packing and then directly transfer the cargo to the aircraft. This helps us reduce the cost and time by one third, which means more cargo will want to transfer through Hong Kong.
On the passenger service side, we have totally revamped Terminal 1 with new gates, new floors, new ceiling and new shops and restaurants. We want to provide a ‘wow feeling’ and a sense of excitement for passengers when they come back to Hong Kong. We have also invested a lot in automation technology, 5G infrastructure and autonomous vehicles. Three years ago, we started to use autonomous vehicles on the airside for baggage transfers and the next stage you will see us transfer people. We will also use autonomous vehicles on the landside for transferring people, which will help us increase efficiency.
To expand our market, we have launched new types of transportation including ferries, bridge or land to travel from nearby mainland cities to Hong Kong. There are 85 million people across the border – Hong Kong has only seven million – so we are expanding our market and encouraging residents that live across the border to use our airport.
What challenges have you experienced?
The challenge is always that we are one of the busiest airports in the world and it is very difficult to run such a busy airport while completing all of those projects, so having lower traffic over the past three years has actually been a positive for us.
Tell us about the airport city project
We continue to diversify our revenue stream and also to maximize the way we use our airport land, so we have a very good piece of commercial land near the terminal that we are making into SkyCity – it will include hotels and a big shopping mall, and will in fact be the biggest indoor entertainment center in Hong Kong. There will also be 100,000m2 conference and exhibition area. The SkyCity combined with our expanded cargo offering forms the future of our airport city.
How will the passenger experience be enhanced?
All of these facilities are very close to each other – within walking distance – and will serve three types of people. First, Hong Kong residents will benefit from the development; second, the people who transfer through Hong Kong; and third, people who come across the bridge from mainland China will be able to use the facilities. This greatly enhances our revenue streams, and with all this revenue it will help us continue to invest in the development of Hong Kong International Airport.
I mentioned during the Passenger Terminal Conference in Amsterdam in March 2023 that in the past 20 years we haven’t increased charges for the airlines by even a dollar. That is really rare – every airport is facing inflation issues, but we have tried to use other revenue streams to help with future development rather than charging the airlines. And we have been very successful.
What does the future look like for HKIA?
Our three-runway system means we can now serve 120 million passengers and 10 million tons of cargo every year, but even with that capacity it doesn’t mean we have that market. So, we will continue to ensure that we have the capability to grow the market – we have projects such as increasing upstream check-in for passengers across the border and upstream collection and consolidation of cargo to ensure we are providing cost-effective, efficient services for logistics companies.
We are also developing two car parks across the border – one is called Park and Fly and the other is Park and Visit. Park and Fly means passengers across the border can park and cross the bridge to use Hong Kong International Airport, and that will allow us to capture more of that market.
The Hong Kong government loves what we do, so they have asked us to manage a piece of land for them and the bay nearby, so we have plans to develop those areas to make them into tourism spots that attract people to the area and generate more revenue.
I want to make it clear that Hong Kong is back – we are recovering from Covid-19 and the political tensions the world saw in 2019 – and we can’t wait to welcome visitors again. We are offering more than half a million free airline tickets – people can enter lucky draws or benefit from ‘buy one, get one free’ offers over the next six months and we hope to welcome everyone back to Hong Kong!