Hong Kong must have third runway to compete with rival transit hubs, expert says

Hong Kong's airport construction fee (ACF) will benefit Hong Kongers over the long term, amid a fierce battle between regional transit hubs, one aviation analyst says.

The ACF, which kicked in on August 1, adding up to 180 Hong Kong dollars ($23.20) to every ticket for flights departing Hong Kong International Airport, was designed to help pay for the airport's third runway and other improvements. Construction of the third runway also began on August 1, with completion scheduled for 2024, at a cost of HK$136 billion ($17.5 billion).

There has been some grumbling over the ticket surcharge, and even a failed attempt to win a judicial review, but Centre for Aviation senior analyst Will Horton told CNBC that it was vital Hong Kong retained its status as a major aviation hub, amid tough competition from other Asian destinations.

"This isn't the time to be telling passengers, hey, instead of taking Cathay from Manila to North America or Taipei to Australia, take ANA through Tokyo or take EVA through Taipei," Horton said. "We need to reinforce the Hong Kong hub, double down and make sure it remains competitive."

A Cathay Pacific aircraft sits on the tarmac at Hong Kong International Airport.
Billy H.C. Kwok | Bloomberg | Getty Images

Besides, Horton pointed out, Hong Kongers themselves benefited from the city's status as a key transit hub, because travelers contributed to the local economy.

Instead, the danger was that even with a third runway, HKIA would be again swamped by air traffic growth within a few years, the analyst cautioned. HKIA handled 68.5 million passengers in 2015, running 1,100 flights a day by more than 100 airlines. According to a IATA Consulting report, an estimated 102 million passengers are expected to pass through the airport per year by 2030.

"The third runway debate is about five years old and we need to be having a very serious conversation about what comes after the third runway," Horton said. "When the third runway opens, it's going to be catering to eight or maybe 10 years of traffic backlog so it's very likely that within a few years of the third runway opening, it's going to be congested."

HKIA came in fifth on Skytrax's prestigious Top Ten Airports of 2016 list, down from fourth in 2016.

It was beaten by regional revials, with Japan's Tokyo International Airport (Haneda) in fourth place, South Korea's Incheon International Airport at number three and Singapore's Changi Airport in top spot. HKIA was the only major Asian airport left out of the top 10 "best airports for baggage delivery" but was second on "best airport dining experience," trailing only Tokyo Narita.

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