The Pearl River Delta now boasts six airports. Will they come together and become a force to be reckoned with? Hazel Ho investigates
There is no denying that China has established itself as an economic superpower, one that is set to lead the world in decades to come. But when the media reports on this increasingly influential nation, it mostly looks at glitzy Shanghai, the stately capital of Beijing, or even Xian with its status as the ancient capital with historical sites such as the terracotta warriors. The fact is China’s rise to economic dominance started in the south, which has always been the more progressive part of the country. Guangzhou, the capital of the southern province of Guangdong that was called Canton in the old days, was the first port to open up to foreign trade in imperial China. Dr Sun Yat-sen, regarded as the “Father of the Nation”, was also Cantonese.
The amazing rise
In the late 1970s, when the country began economic reforms, Guangdong’s Pearl River Delta (PRD) was picked as the starting point because of its proximity to Hong Kong – then a British colony and a much more prosperous and established business hub. Shenzhen, at the time a rural village across the border from Hong Kong, was designated as a special economic zone that welcomed foreign investment. In only three decades, it has grown into a city of more than 10 million permanent residents, with an estimated GDP of RMB1 trillion (US$159 billion) last year, according to its mayor Xu Qin.
Excluding the Special Administrative Regions of Hong Kong and Macau, a former Portuguese colony and a major hub of tourism and gaming, the PRD contains nine cities with 42 million people. Last year, the region’s city planners reportedly announced a “Turn The Pearl River Delta Into One” scheme that aimed to create a 41,440 sq km urban area – 26 times larger than Greater London. Some 150 large-scale infrastructure projects will link these cities, and high-speed rail will allow travel between Hong Kong, Shenzhen and Guangzhou in no more than an hour.
According to the Hong Kong Trade Development Council, as of 2010 the region accounted for more than 10 per cent of China’s gross industrial output.
Air power
There are six airports in the region – Hong Kong International Airport (HKG), Shenzhen Bao’an International Airport (SZX), Guangzhou Baiyun International Airport (CAN), Macau International Airport (MFM), Zhuhai Sanzao Airport (ZUH) and Foshan Shadi Airport (FUO) – and the first three have been the most aggressive in terms of development and expansion.
Its strategic geographical location and unique historical background have allowed HKG to develop an extensive international network and become the lead airport in the region. The facility is used by more than 100 airlines linking Hong Kong with some 160 destinations, including around 40 on the Mainland, through about 900 daily flights. Last year, HKG welcomed 53.9 million passengers and handled 3.9 million tonnes of cargo, with a total of 333,760 aircraft movements.
About 40 kilometres north of HKG is SZX, which provides an extensive domestic network on the mainland. Up to February 2011, it connects more than 100 destinations with 141 routes, 109 of them domestic and 32 international. According to the Centre for Asia Pacific Aviation (CAPA), the facility was used by 28.2 million passengers last year – a 5.7 per cent year-on-year increase, while cargo volume rose 2.4 per cent to 828,400 tonnes. There were a total of 224,300 aircraft movements.
About 100 kilometres farther to the northwest stands CAN, one of the top three airports in Mainland China after Beijing Capital and Shanghai Pudong. Opened on August 5, 2004, it serves 54 cities in 35 countries, including 36 in Asia – and the number of international routes has passed the 100 mark. The facility accounts for one-third of the total number of international routes serving in Guangzhou. CAPA reports that the facility served 45 million passengers last year and in the same period handled 1.2 million tones of cargo, with 322,259 aircraft movements.
The other three airports each serve their niches, but play more minor roles. MFM, which opened in November 2005, is designed to handle six million passengers per year but remains under capacity, as most visitors still prefer to reach the city by ferry from Hong Kong. The number of airlines using this airport is 22, including its home carrier Air Macau and many low-cost carriers, and they serve mostly China and Asia. Across the border from Macau, ZUH remains mostly a small domestic airport used by 10 airlines, while FUO, once a military airport and reopened at the end of last year after upgrade work funded by Beijing-based China United Airlines, is aiming to develop itself into a facility to connect smaller Chinese cities and for private aviation.
Competition or complement?
With the government having almost the absolute say in infrastructure development, SZX and CAN have grown tremendously in a very short time. Being only an hour away by ferry, SZX is seen by some as a threat to HKG, especially with the 3,800-metre-long and 60-metre-wide second runway that is expected to help increase passenger capacity to 45 million passengers – even 60 million passengers per year by 2035. As part of the expansion plan, the second runway is designed to cater to superjumbos such as the A380.
Last July, the city’s home carrier Shenzhen Airlines officially joined Star Alliance, with full integration expected by the end of this year. The carrier, which was founded in 1993, takes up 43.8 per cent of Shenzhen’s air travel business and serves 70 locations on the mainland as well Taipei, Osaka, Tokyo and Seoul with a fleet of 102 passenger and cargo aircraft, specifically Boeing 747s and 737s, and Airbus A320s and A319s. Its entry to a global alliance also signified the airport’s increasing international profile.
Caspar Baum, the head of Aviation Asia, EC Harris, points out that “joining the Alliance does not necessarily mean that you have the same target in market share.” The capture area for Shenzhen is still Mainland China. While well-established international carriers such as Cathay Pacific and Lufthansa will continue to grow in HKG and CAN, other carriers and Mainland Chinese operators will put more emphasis on Shenzhen Airport due to slot availability, incentives and new customer target groups.
CAN, about three hours’ drive away from Hong Kong, intends to develop its market in Europe, Oceania and South America. The airport is currently building its third runway and terminal two with a capacity of 120 movements per hour; the third and fourth runways are due to be completed by 2015 and 2020 respectively. It aims to enter the world top 10 with a target to reach 120 international routes by 2015.
IATA estimates that the airport will have a potential of 85 million passengers by 2025; however, it also highlights the fact that airspace capacity is expected to be the major bottleneck for CAN, as the airport is reportedly short of 200 movements per day due to airspace restrictions.
Despite SZX and CAN’s fast-increasing connectivity, HKG remains ahead of the game. However, John Slosar, chief executive of Cathay Pacific Airways (CX), comments that HKG is a victim of its own success since the full capacity of the airport will be reached by 2017, 13 years ahead of its original blueprint forecast of 2030. After that any additional air traffic and passengers will have to be turned away.
Airport Authority Hong Kong (AAHK) has put forward the Master Plan 2030 to map out the expansion plans and future development of HKG. The plan includes two options: the first is to enhance the capacity of the two existing runways, with perceivably less environmental impact, while the second suggests building a third runway. Stated in the Master Plan, the two-runway system will meet the air traffic demand until approximately 2020, while a third runway could accommodate the demand up to 2030 and possibly beyond.
CX, the city’s home carrier, is unequivocal in its support for a third runway, calling it “the only effective way to address the airport’s capacity constraints and ensure the long-term competitiveness of the Hong Kong hub”.
“By providing capacity ahead of demand, the airport potentially attracts new airlines and expands service by existing ones. It also positions HKG to compete more effectively with its neighbours,” says Peter Harbison, executive chairman of CAPA.
No open sky
In terms of this competition, the issue of airspace restrictions in China is an important one that potentially restricts the growth of the Mainland PRD airports. The South China Morning Post has reported that China’s Air Force, which is responsible for governing the country’s airspace, has only agreed to open 10 routes for SZX’s second runway. General Manager of Hainan Airlines’ Shenzhen branch, Li Haitao, told the newspaper that this is the main obstacle restraining the airport’s development.
However, the Civil Aviation Administration of China (CAAC) is beginning to make the sky more open for general aviation. The authority has announced its reform on airspace management and plans to thoroughly open its low-altitude airspace to private jets across the country by 2015, with a view to eventually resolving the whole restriction issue.
Assuming that this liberalisation will happen, it is predictable that more routes will become available from SZX and CAN and they will be more competitive. Will HKG’s position be threatened? Industry insiders generally think it is unlikely. “Definitely there will be competition between HKG, SZX and CAN, but the overall growth expected is so large that there is ‘enough’ for all,” comments Baum. “Shenzhen will rival but not necessarily cannibalise HKG’s traffic.” And although CAN is expected to have greater access to the world, the IATA suggests that its competition with HKG will focus mostly on the regional routes, in particular to Southeast Asia.
The general consensus seems to be that the three airports will continue to play to their own strengths and complement one another to make the region a hub. A position paper from Cathay Pacific clearly states that the competition among the PRD airports does not necessarily exclude cooperation on many fronts.
Experts in the industry are seeking a win-win situation by positioning the three in different roles. Eva Cheng, Secretary for Transport and Housing Bureau, says the positions of HKG and SZX are diverse; thus, Shenzhen’s very strong Chinese network can complement HKG’s strength in international routes.
Harbison points out that the main short-term challenge in the region is congested airspace, making cooperation vital. Yau Shing-mu, Acting Secretary for the Transport and Housing Bureau, in an HKSAR Legislative Council meeting to answer members’ questions, stated that the CAAC, Hong Kong Civil Aviation Department and the Civil Aviation Authority of Macao are now discussing ways to improve airspace in the PRD by 2020. At present, they have agreed to adopt a “unified planning, unified standards and unified management” principle to jointly promote the overall airspace system, including airspace management, air traffic control operations and flight procedures.
The Framework Agreement for Hong Kong/Guangdong and Macau/Guangdong Co-operation has clearly stated the positioning of the major PRD airports, with HKG, SZX and CAN as an international hub airport, major pillar airport and integrated hub airport respectively. Add to this the increasingly improving rail and road links within the region (see sidebar on page 60), and the Pearl River Delta seems set to become an aviation force to be reckoned with.
The land links
Cross-boundary transport infrastructure is crucial to successful PRD integration. The Hong Kong Special Administrative Region is pressing ahead with three strategic cross-border infrastructure projects:
Hong Kong-Zhuhai-Macau Bridge This 30-kilometre road bridge is a joint project by Guangdong, Hong Kong and Macau. When the bridge is put into service in 2016, the transport time between Zhuhai and HKG will decrease from four hours to 45 minutes. This will accelerate economic integration and enhance Hong Kong as a trading and logistics hub. Eva Cheng, secretary for Transport and Housing Bureau says that the location of Hong Kong port creates “significant synergy” between HKG and the bridge.
Guangzhou-Shenzhen-Hong Kong Express Rail Expected to open in 2015, travel between Hong Kong’s West Kowloon Station and Guangzhou on this rail line will take only 48 minutes, bringing Guangzhou, Dongguan and Shenzhen into Hong Kong’s “one-hour commute” and improving accessibility within the whole PRD. Cheng believes that rail will have a distinct advantage over aviation but will not affect the competitiveness of HKG since all the regional routes combined contribute less than 10 per cent of HKG passenger throughput. The train also provides a link to second- and third-tier locations outside major cities, potentially enlarging the catchment area for HKG.
Hong Kong-Shenzhen Western Express Line The Western Express Line is expected to be a multipurpose railway; one of its important features will be to connect HKG and SZX with a 20-minute travel time, linking Hong Kong’s international air network with Shenzhen’s domestic network – a win-win situation for both airports.
Fast facts
From 2010, excluding Hong Kong and Macau:
Real GDP of the PRD grew by an average of 12.2 per cent
The PRD accounted for 4.2 per cent of China’s total population
The PRD accounted for 9.4 per cent of China’s GDP
The PRD accounted for 10.3 per cent of China’s gross industrial output
The PRD accounted for 27.4 per cent of China’s total export
The PRD accounted for 9.8 per cent of China’s total retail sales of consumer goods
Source: Hong Kong Trade Development Council
