Airport Authority Hong Kong Reports Interim Results

On Tuesday, the Airport Authority Hong Kong reported its unaudited interim financial results for the six months ended 30 September 2009. Revenue and profit attributable to equity shareholders dropped 4.7% and 3.8% respectively over the same period in 2008 to HK$4,316 million and HK$1,307 million.

Passenger and cargo traffic at Hong Kong International Airport (HKIA) were negatively affected by the global economic downturn that began in the second half of 2008, and as a result dropped 6.4% and 11.5% from a year earlier to 23 million passengers and 1.68 million tonnes of cargo during the period under review. Aircraft movements also declined 8.5% to 138,600.

In recent months the market has shown signs of stabilisation and recovery, particularly in air cargo, which suffered the most during the economic downturn. Stanley Hui Hon-chung, Chief Executive Officer of the Airport Authority, said, "In October, cargo volume recorded the first growth in 14 months, and November figures thus far continue to indicate a strong rebound in demand for cargo services. Our airline partners are also responding to the early signs of recovery by reinstating capacity or routes that have been cut or suspended since the global financial tsunami arrived last year."

Three passenger and 11 freighter airlines have joined HKIA or resumed their services since April, adding 18 passenger and 30 all-cargo flights per week. Currently, around 90 airlines are operating from HKIA, linking the airport to around 150 destinations worldwide, including some 40 cities on the Chinese mainland.

"Although the force and pace of the recovery are hard to predict, we are confident in the long-term prospects of HKIA as we are well positioned to capitalise on the tremendous growth opportunities arising from Mainland China's robust economy and the increasing economic integration between Hong Kong and the Mainland, in particular, the Pearl River Delta (PRD). The Airport Authority remains committed to maintaining HKIA's status as an international and regional aviation centre," Mr Hui added.

To assist airlines and other operators that have been adversely affected by the global economic downturn, the Airport Authority offered a relief package of $450 million in April 2009. By the end of September 2009, a reduction of $120 million landing and parking charges have been provided to airlines. In addition, about $130 million worth of interest-free payment deferral for office and lounge rents was arranged for business partners.

A new ferry route between HKIA and Nansha Port was launched in July, increasing the number of PRD ports with ferry services to HKIA to seven (including Macau). Ferry trips served by SkyPier at HKIA now amount to 560 a week. In September, the 340-square-metre Precious Metals Depository, which provides secure storage and physical settlement services to the bullion trade, officially entered into service.

By the end of this year, two major facilities – the North Satellite Concourse and the permanent SkyPier – will be soft opened. The Airport Authority is also working on a study on developing the midfield area to provide additional aircraft stands, related apron facilities and a new passenger concourse to accommodate increase in aviation demand when runway capacity is gradually increased to 68 aircraft movements per hour by 2015. In addition, the Hong Kong International Airport Master Plan 2030, a strategic development plan for the long-term growth of the airport, is well underway.

"During the period under review, although air traffic performance recorded negative growth, the Airport Authority was able to mitigate the impact of the decline by tightening up expenditures, enhancing cost effectiveness and expanding revenue from retail and other commercial activities," said Raymond Lai Wing-chueng, Airport Authority's Executive Director, Finance and Investment. "Looking forward, we are cautiously optimistic about the airport's full-year financial performance and will continue to control cost as the economy is still in an early stage of what could be a slow and volatile recovery."

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