Aviation, GBA

Project runways

Will Shenzhen airport’s expansion contest or complement Hong Kong’s?

Visitors are seen under a Chinese flag at the terminal hall of the Beijing Daxing International Airport under construction, during a media tour on the outskirts of Beijing

About to take off: Beijing Daxing International Airport

China’s first time fliers are back in the news this year after at least five more cases in which superstitious passengers have thrown coins at their aircraft for good luck. In the latest instance a woman hurled nine coins into the engines ahead of a China Southern flight from Shanghai to Guangzhou.

Perhaps a few crazy customers are to be expected when so many people are flying. Beijing, Hong Kong and Shanghai are already among the world’s top 10 busiest airports, according to this year’s rankings from Airports Council International. Guangzhou is only a few places behind the trio and Shenzhen’s hopes of joining the group have been boosted by approvals this month from the National Development and Reform Commission for a third runway at its Bao’an International Airport, costing Rmb9.35 billion ($1.39 billion).

At least 200 new airports will be built across China over the next decade. Most of the incumbents are lossmaking but that hasn’t put off their backers, who point to longer-term projections from the International Air Transport Association (IATA) that Chinese passenger numbers will go past 1.6 billion by 2037, well above the 1.26 billion people who travelled last year.

Beijing Capital Airport – the world’s second busiest, but set to grab top spot from Atlanta soon – delivers a concrete example of just how quickly that demand has been developing. Opening in 2008 with an annual capacity of 80 million passengers it now handles more than 100 million people, stretching its operations to the limit. Another huge airport in Daxing to the south of the capital will open in September to cope with the added pressure, with target capacity of 75 million more passengers (see WiC265).

Back in the Greater Bay Area (GBA) in southern China there are already five main airports within a 150km radius. Hong Kong’s was busiest with 75 million passengers last year, although Guangzhou has almost caught up with 70 million of its own. Shenzhen was still a little way back with 49 million, while Zhuhai and Macau reported 11 million and 8 million respectively.

All the main contenders are going through growth spurts: Shenzhen’s expansion will allow for 80 million passengers a year by 2023 and Hong Kong is building its own third runway, which will take its capacity to more than 100 million within five years time. Guangzhou is talking about increasing its runways from three to five, and handling as many as 140 million passengers a year.

Taken together the plans cement the GBA’s status as the world’s leading aviation cluster. Yet that kind of capacity is still short of IATA’s forecasts for demand across the Pearl River Delta region in a decade’s time. Simply put: the region will need more runways and more passenger terminals.

Aviation planners say that the airports can prosper if they target different markets, despite operating in the same neighbourhood. The basic landscape is likely to be a battle of the hubs between Hong Kong and Guangzhou, with smaller airports like Zhuhai and Macau taking on more niche roles. Shenzhen sits somewhere in-between, growing its international network but still dependent mostly on domestic routes (its advantage: its like-for-like flights cost far less than those originating from Hong Kong, and it also serves far more third-tier Chinese cities on a point-to-point basis).

Hong Kong has the most flights to international destinations and the highest share of connecting traffic, with about half of the customers on its flagship airline Cathay Pacific transiting through the city. Guangzhou is ahead of Hong Kong in terms of connecting to other mainland cities, and is rapidly adding more destinations overseas, especially as China Southern, its home carrier, grows its global reach.

Macau is more dependent on low-cost carriers from the Asian region, as well as point-to-point traffic from China coming to gamble at the enclave’s casinos, while Zhuhai also focuses on mainland traffic, much of it with second-and third-tier cities.

The proximity puts the onus on how each airport serves its target customers, as well as how each of them reaches out into neighbouring areas for business. Hong Kong’s airport authority reports that more than 4.5 million of its passengers were already connecting by road or ferry with other parts of the GBA in 2017. It also has plans to increase from 16 the check-in facilities it has at ferry terminals, cross-border checkpoints and downtown facilities in GBA cities.

Another feature for the future is how the airports choose to collaborate. Hong Kong’s airport has a major stake in nearby Zhuhai, opening up the prospects for a closer partnership across the recently opened Hong Kong-Zhuhai-Macau Bridge (see WiC440). With Shenzhen’s airport just 36km away, there was another round of speculation in the local media this month about the construction of a Maglev rail link connecting it with Hong Kong as well.

That said, local officials could need persuading to cede their personal ambitions in favour of partnerships and the risk is an airport ‘arms race’ escalates as each candidate pursues its own projects, forcing its rivals to respond competitively in kind.

While the central government has been talking about a master plan, there hasn’t been much sign of it imposing a more integrated approach on GBA aviation. Market forces are making more of the running, for the time being at least.

It should benefit passengers by giving them more options for travel and putting pressure on rival carriers to keep fares lower. There will be a better range of air cargo alternatives for companies operating in the region’s manufacturing zones as well. But the increase in passenger numbers should force the authorities to look at areas where better coordination is required in the GBA too. One of the priorities is a unified approach to air traffic control, which is divided across three jurisdictions. Choosing which one will call the shots is going to be contentious. But congestion in the skies is already creating thousands of hours of flight delays and millions of tonnes in extra fuel burn (and resulting pollution). Adding thousands of new flights is only going to make that situation worse.

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