HK airport, airlines feel strain from intense competition

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pr1176_MERS Check PointHong Kong International Airport (HKIA) saw a slowing of momentum in cargo growth in May, while passenger numbers continued to swell despite fears over the spread of the Middle East Respiratory Syndrome (MERS) outbreak in South Korea.

HKIA reported that in May, cargo throughput experienced a slight 0.3% yearly drop to 366,000 tonnes, mainly attributed to a 2% year-over-year fall in exports. Imports and transshipments both registered a 1% increase compared to the same month last year. Traffic to and from North America outperformed other key regions during the month.

The airport’s passenger business soared 12.1% to 5.8 million passengers in the month year-over-year, while aircraft movements increased by 4.2% to 34,115 compared to the same month last year.

The growth in passenger traffic in May was mainly due to an 18% year-over-year growth in both transfer and transit traffic and Hong Kong resident traffic. Passenger traffic to and from Southeast Asia and North Asia recorded the most significant increases.

Vivian Cheung, deputy director of airport operations of Airport Authority Hong Kong, said the authority has put in place several contingency measures to detect any cases of MERS entering the airport.

Since the start of the year, HKIA has moved 1.7 million tonnes of cargo for a 1.4% rise, and on a rolling 12-month basis, cargo tonnage increased by 4.1% to 4.4 million tonnes.

From January to May, the airport welcomed 27.9 million passengers, and logged 166,745 aircraft movements, marking year-on-year increases of 9.5% and 4.6%, respectively.

On a rolling 12-month basis, HKIA has served 65.8 million passengers and handled 398,380 aircraft movements, with both figures increasing year-over-year by 6.9% and 4.5%, respectively.

Benefiting from Indian cargo demand

On the other hand, traffic figures for May from Hong Kong airlines Cathay Pacific and Dragonair showed an uplift in both the volume of cargo and mail and the number of passengers carried compared to the same month last year.

The airlines carried 147,034 tonnes of cargo and mail last month, an increase of 6.2% compared to May 2014 against a capacity increase of 11.1% for the same period.

In the year to the end of May, tonnage rose by 9.6% against a capacity increase of 9.6%.

Also in May, the sister airlines carried a total of 2,901,558 passengers, an increase of 11.8% compared to the same month last year versus a capacity hike of 7.5%. In the year to the end of May, passenger traffic grew by 9.1% while capacity was up by 6.5%.

Mark Sutch, Cathay Pacific General manager of cargo sales and marketing, said growth has slowed partly due to intense competition and partly from the easing of congestion on the West Coast of the U.S.

“Our cargo business got off to a slow start in May due to the long public holiday in Mainland China at the beginning of the month. Demand picked up steadily as factories reopened but the month’s tonnage growth could not keep pace with the increase in capacity.”

He added: “Our Mainland business continued to face pressure from intense competition and we saw less benefit from the congestion in the seaports on the West Coast of the USA than in previous months. Demand into and out of the Indian subcontinent was one of the bright spots in our cargo network in May.”

Patricia Hwang, Cathay Pacific general manager of revenue management, said passenger demand from key Hong Kong markets was strong, buoyed by the public holidays at the beginning of the month.