Civil Aviation

Hong Kong is a major international and regional aviation centre. The Hong Kong International Airport (HKIA) is one of the busiest airports in the world. At the end of 2003, 71 scheduled airlines were serving Hong Kong. These airlines together operated about 4 155 scheduled flights weekly between Hong Kong and some 130 cities world-wide. In addition, an average of about 79 non-scheduled flights was operated to and from the HKIA each week.

Air Traffic in 2003

The outbreak of SARS in Hong Kong in March and the subsequent issue of travel advisory notices against non-essential travel to affected areas, including Hong Kong, by the World Health Organisation (WHO) had a significant deterrent effect on air travel. Although passenger traffic and flight frequency had fully recovered to pre-SARS levels by year-end, the total of 27.43 million passengers (including 0.68 million in transit) that passed through the airport in 2003 represented a sharp decrease of 20.1 per cent from 2002. Aircraft movements also fell markedly by 9.43 per cent to a total of 187 508.

Despite the drop in passenger throughput and aircraft movements, the year saw continued growth in air cargo throughput at the HKIA. The airport handled a record-breaking 2.64 million tonnes of air cargo, representing a growth of 6.6 per cent from 2002. The corresponding value also increased by 18.1 per cent to $1,074.47 billion. The growth in air cargo was mainly attributed to a surge in exports to Europe and to other Asian cities.

Air transport continues to play an important role in Hong Kong's external trade. Goods carried by air accounted for about 34.5 per cent, 27.7 per cent and 25.8 per cent, in value terms, of Hong Kong's total imports, exports and re-exports respectively in 2003.

Airport Operations and Development

At the peak of the SARS outbreak, passenger throughput at the HKIA fell by as much as 80 per cent, although air cargo volume continued to grow satisfactorily. The swift implementation of effective SARS preventive measures at the HKIA, including the implementation of body temperature checks for all passengers and staff entering the airport restricted area, helped rebuild confidence in air travel. The incentive and revitalisation packages introduced by the Airport Authority (AA) in April and May also helped alleviate the difficulties faced by the aviation industry and facilitate a quick recovery in air traffic. By December, the passenger throughput at the HKIA had rebounded to the pre-SARS level.

Despite the temporary setback, the HKIA continued to win accolades for Hong Kong. The HKIA was voted 'Airport of the Year' in 2003 for the third time in a row by Skytrax Research of the United Kingdom. It was also named the 'Cargo Airport of the Year' for the second consecutive year by Air Cargo News.

With a view to expanding the catchment area of the HKIA, much progress has been made to further improve its transport connectivity with the Pearl River Delta (PRD) region. With the opening in 2003 of a new Airport-Mainland Coach Station as well as an airport ferry terminal named as SkyPier, the HKIA has been transformed into a fully multi-modal transportation hub integrating air, sea and land transport.

The new Airport-Mainland Coach Station, opened in February, has a waiting lounge for passengers and sheltered bays for 10 coaches. Some 100 buses daily transport passengers between the HKIA and 18 destinations in the PRD.

The HKIA's links to the PRD were further strengthened by the opening of the SkyPier in September, providing people in the delta region the opportunity of direct access to the airport for overseas travel. Under arrangements agreed by the relevant government authorities, PRD transit passengers arriving at the SkyPier by high-speed ferries are able to proceed by bonded buses directly to the passenger terminal for onward flights. Similar procedures apply for arriving air transit passengers en route home to the PRD. Like other transit passengers, these passengers have to stay within the airport's restricted area and are not subject to Customs and Immigration clearance. The arrangements reduce by up to half the usual four hours' transit time for PRD passengers to take connecting flights at the HKIA. At year-end, four PRD ports — Shenzhen, Shekou, Dongguan and Macau — were served by ferries operating from the SkyPier, and efforts were being made to extend the ferry service to more PRD ports.

To meet air passengers' requests for more retail and dining outlets, the East Hall of the Passenger Terminal Building was reconfigured during the year to accommodate a wider variety of retail shops and restaurants.

Construction of the Express Cargo Terminal at the HKIA began during the year. When completed in 2004, the terminal will be able to handle approximately 440 tonnes of express cargo a day. This dedicated facility will further enhance the airport's capability in handling express cargo.

In August, the Government, the AA and a private consortium signed a joint venture agreement for the construction of an international exhibition centre at the HKIA. Named the AsiaWorld-Expo, the easily accessible facility will be a major exhibition venue in Hong Kong, and will increase the flow of people through the HKIA. Phase 1 of the development, comprising 66 000 square metres of net usable area, will be completed for full operation by the first quarter of 2006.

To further enhance the competitiveness of the HKIA as well as expand its catchment area, the AA is fostering closer cooperation with other PRD airports through the PRD A5 Forum in areas such as emergency coordination, services promotion and joint studies to promote smooth passenger and cargo processing. Apart from the HKIA, airports in Guangzhou, Shenzhen, Zhuhai and Macau also participate in the Forum. Besides this, the AA engages in discussion with individual PRD airports on proposals for cooperation.

Privatisation of Airport Authority

In August, the Government announced its plan to commence work in preparation for the partial privatisation of the AA. A financial adviser was subsequently appointed to provide professional services and assistance. Privatisation will reinforce the airport's first-class operations, and bring about more commercial opportunities. It will enhance the AA's access to the capital market, and introduce an additional quality stock to add diversity to the local financial markets. In addition, it will offer an opportunity for Hong Kong people to participate in the success of a well-managed company with strong growth potential. Proceeds from privatisation will help strengthen the Government's finances in the short to medium term. The Government will devise a package of proposals including the future regulatory mechanism for the privatised AA, and will consult stakeholders on the proposals.

Air Services

In 2003, the Air Transport Licensing Authority (ATLA) granted six licences: one to Cathay Pacific Airways Limited (CPA), two to Hong Kong Dragon Airlines Limited (HDA), one to AHK Air Hong Kong Limited (AHK), and two to CR Airways Limited (CRK). At year-end, CPA held nine licences to operate scheduled services to 133 destinations, HDA held 10 licences to operate scheduled services to 106 destinations, AHK held eight licences to operate scheduled services to 57 destinations, CRK held two licences to operate scheduled services to five destinations, and Helicopters Hong Kong Limited (HHK) held two licences to operate scheduled services to two destinations.

CPA commenced some major codeshare services with American Airlines to operate passenger services to 20 cities in the United States in January. The codeshare services were further extended to five more US cities later in the year. However, the outbreak of SARS in March triggered a world-wide reduction in demand for passenger air travel. CPA cut its scheduled passenger flights by almost 50 per cent. After the travel advisory notice concerning Hong Kong was lifted by the WHO in May, the market quickly recovered and CPA's scheduled passenger air services were restored to the pre-SARS level by September. CPA commenced scheduled all-cargo services to Osaka and passenger services to Beijing in September and December, respectively. The frequency of scheduled passenger air services to Auckland, Johannesburg, London, Melbourne, Rome and Sapporo was also increased from October. There had been a sustained growth in cargo carriage, which was not affected by the SARS outbreak. In October, CPA carried a record monthly tonnage of air cargo. In July, CPA took delivery of its third long-range Airbus A340-600 aircraft. The airline also took delivery of three Airbus A330-300 and two Boeing B777-300 aircraft in the last quarter of the year. By year-end, CPA operated scheduled services to 49 destinations world-wide.

HDA's services were also severely affected by the outbreak of SARS. Up to 64 per cent of its scheduled flights were cancelled before the lifting of the WHO's travel advisory notice. From July, visitors from designated cities in the Mainland were able to travel to Hong Kong under the Individual Visit Scheme. This had a stimulating effect on the demand for HDA's services between Hong Kong and the Mainland, which returned to pre-SARS levels in August. The airline also launched new scheduled passenger services to Bangkok in November and resumed its passenger air services to Harbin in December. Its air cargo shipment continued to grow robustly during the year. The airline took delivery of two Airbus A321-200 aircraft in September and October. At year-end, HDA operated scheduled services to a total of 30 destinations, including 19 cities in the Mainland.

In June, the Civil Aviation Department (CAD) issued a varied Air Operator's Certificate (AOC) to CRK for the operation of its first Bombardier CRJ-200 regional jet. CRK thus became the third Hong Kong-based carrier that can operate scheduled air services to the Mainland using fixed-wing aircraft.

AHK focused on developing its network in Asia. The airline continued to operate scheduled all-cargo services to Osaka, Seoul and Tokyo. It expanded its services to Bangkok and Singapore in March and October, respectively. In March, DHL Worldwide Express increased its stake in AHK by 10 per cent, bringing it to a total of 40 per cent. CPA held the remaining 60 per cent.

At the end of 2003, the fleets of CPA, HDA, AHK and CRK were as follows:

uring the year, one new AOC was granted. Visions Balloons Limited was issued an AOC in March to operate a hot air balloon within the territorial boundaries of Hong Kong. It was the first AOC issued to a balloon operator by the CAD.

As regards non-Hong Kong airlines, three airlines commenced scheduled passenger services to Hong Kong in 2003: Mekong Airlines and President Airlines, respectively, between Phnom Penh and Hong Kong in March; and Kenya Airways between Nairobi and Hong Kong in September. In October, Transaero Airlines resumed its services between Moscow and Hong Kong, which had been suspended since April 1998. Also, Myanmar Airways International resumed its services between Yangon and Hong Kong in December after suspension of the services in January 2002. In addition, Saudi Arabian Airlines commenced scheduled all-cargo services between Jeddah, Riyadh and Hong Kong in January.

In the midst of the SARS outbreak, a number of airlines suspended their services to Hong Kong. However, most of them resumed services in the third quarter. Two airlines suspended their scheduled passenger services to Hong Kong, namely Mekong Airlines between Phnom Penh and Hong Kong in May and Air Philippines between Laoag and Hong Kong in October. Three other airlines suspended their all-cargo services: Mandala Airlines between Batam (Indonesia) and Hong Kong in March; Transmile Air between Kuala Lumpur, Penang and Hong Kong in August; and Pacific East Asia Cargo Airlines between Clark (Philippines) and Hong Kong in September.

A number of airlines operating in Hong Kong underwent reorganisation during the year. Air China took over the operations of China Southwest Airlines in January; China Southern Airlines took over China Northern Airlines whereas China Eastern Airlines took over both China Northwest Airlines and Yunnan Airlines in March. A new all-cargo carrier, Lufthansa Cargo AG, took over the all-cargo services of Lufthansa German Airlines in October.

As regards domestic helicopter services, the Government made available a temporary site at the southern tip of the West Kowloon Reclamation Area to facilitate the continuous development of commercial domestic helicopter services after the closure of the Central Heliport. The new West Kowloon Heliport was officially commissioned on December 7. The development and management rights for the facility were awarded to HHK through an open tender exercise conducted earlier in the year.

Air Traffic Control

The overall air traffic control (ATC) system continued to perform in a stable and reliable manner during the year. To handle effectively the projected growth in air traffic movements in Hong Kong and the Pearl River Delta area, it is necessary to further enhance the operational efficiency and increase the data processing capacities of the ATC system. In this regard, the CAD had implemented an enhancement programme on six major ATC equipment systems, namely Radar Data Processing and Display System, Flight Data Processing System, Radar Simulator, Speech Processing Equipment, Automatic Message Switching System and Aeronautical Information Database System. The programme was satisfactorily completed in March, as scheduled.

With regard to the replacement of the long-range primary Route Surveillance Radar at Mount Parker, the CAD started equipment installation in September and system acceptance tests in November. With satisfactory commissioning flight check results, the new radar underwent operational evaluation and further system optimisation began in December.

The CAD liaised with the General Administration of Civil Aviation of China (CAAC) on the relay of the secondary surveillance radar (SSR) data from Xisha to Hong Kong, and installation of Very High Frequency (VHF) communications facilities at Xisha for use by the department. The plan is to have these facilities available for testing in Hong Kong in mid-2004. With such provision, the ATC operational efficiency in the Hong Kong Flight Information Region will be greatly enhanced.

To ensure the provision of efficient ATC services in the Pearl River Delta area, the CAD continued to maintain close liaison with the civil aviation authorities of the Mainland and Macau. In 2003, a series of tripartite meetings on ATC operations was held and the flight procedures of airports in Hong Kong, Shenzhen, Zhuhai and Macau were refined for more effective use of airspace in the region.

Under the auspices of the International Civil Aviation Organisation (ICAO), the Reduced Vertical Separation Minimum programme has been adopted and successfully put into operation. As a result, aircraft operating in this region enjoyed better fuel economy, reduced ground delay as well as improvements in operational efficiency. Review meetings organised by the ICAO were also held regularly to ensure safe operations of the programme and to further streamline the operations.

Following the establishment of a Safety and Quality Section in the CAD, the department's Air Traffic Management Division continued to implement and adapt existing practice in accordance with the principles of Safety Management System on air traffic management and air traffic service operations. In December, a Safety Regulatory Audit on Control Aerodrome Competency Assurance was conducted with satisfactory results. Further efforts will be made to use the Safety Management System as a tool for enhancing safety and quality.

The CAD hosted an international Search and Rescue Seminar on November 24 and 25. The seminar provided a forum for experts of the Asia-Pacific region to discuss search and rescue matters, enhance coordination and cooperation between states, and update states on the latest developments in the field. Participants in the seminar were also invited to observe the annual search and rescue exercise conducted from November 26 to 29.

Satellite-based Communications, Navigation and Surveillance/Air Traffic Management (CNS/ATM) Systems

To comply with the Global and Regional Implementation Plans of the ICAO for Satellite-based CNS/ATM Systems, studies on the latest CNS/ATM developments and detailed investigations on various elements of the CNS/ATM Systems continued. Satisfactory progress and results were achieved in 2003 in various technical and operational trials including those on the Aeronautical Telecommunication Network, Air Traffic Services Message Handling System, VHF Digital Link, Air Traffic Services Inter-facility Data Communication, and Automatic Dependent Surveillance/Controller-Pilot Data Link Communications for downlinking meteorological data.

Following satisfactory system trials, certain mature CNS/ATM System elements were put into operational use so as to reap the benefits of early CNS/ATM applications. These included Digital-Automatic Terminal Information Services (D-ATIS), Digital-Meteorological Information for Aircraft in Flight (D-VOLMET) and Pre-Departure Clearance delivery via datalinks. At year-end more than 43 per cent of the departure traffic at the HKIA was using Pre-Departure Clearance delivery via datalinks.

Aircraft Noise Management

In Hong Kong, impact caused by aircraft noise is assessed on the basis of the internationally accepted Noise Exposure Forecast (NEF) Contour. The determination of the contour takes into account factors including the decibel levels of aircraft noise, the tonal characteristics as well as the duration and frequency of overflying flights at different times of the day. Currently, the aircraft noise standard adopted in Hong Kong is the NEF 25 contour, which is more stringent than the standards adopted by some other airports.

The Government is mindful of the concern of some residents about aircraft noise. The CAD continued its effort in exploring and implementing all practicable aircraft noise mitigating measures. These included noise abatement take-off and landing procedures, prohibition of landing/take-off of relatively noisy aircraft (i.e. subsonic jet aircraft which do not comply with the noise standards specified in Volume I, Chapter 3 of Annex 16 to the Convention on International Civil Aviation) and, whenever possible, use of flight paths which cover fewer residential areas.

The expansion and upgrading works to enhance the monitoring capability of the existing computer-based aircraft noise and flight track monitoring system was completed in 2003. Another stage of works to improve its data processing ability was under way.