Plane talking

Is Suzhou going to get its own airport too?


Pudong Airport: investor favourite

The summer months have been tumultuous ones for China’s airport kingdoms. In the south, passenger numbers have dropped sharply in Hong Kong as scenes of unrest led TV coverage of the city. Across the border Shenzhen and Guangzhou have picked up some of the slack, luring travellers and prompting steep rises in the share prices of their airport operators.

Further north, the new Daxing International Airport has just opened in the outskirts of Beijing (see WiC469). Combined with the passenger traffic at the existing airport in the capital, it means that Beijing will take over from Atlanta as the world’s busiest aviation hub next year. It will also surpass Shanghai’s two airports of Pudong and Hongqiao, despite the opening of yet another huge new terminal at Pudong a few days before the first flights departed from Daxing.

Further down the food chain, there’s airport status anxiety among Shanghai’s neighbours, especially the city of Suzhou, which has completed a feasibility study in support of its ambition to build its own hub rather than relying on Shanghai’s.

It’s not as if Suzhou is starved of access in air transport terms. There are three options and none of them are far: Hongqiao is 30 minutes away by bullet train, Pudong is a 90-minute drive and another smaller airport in Wuxi is just half an hour by road.

That’s immaterial to Suzhou’s bosses, who assert their claims more on the basis that a city with a population of more than 10 million deserves an airport of its own. From their viewpoint, it’s an anomaly that China’s seventh biggest city in GDP terms lacks an aviation hub, especially given that it houses enterprise zones like the China-Singapore Industrial Park, set up in 1994 (now home to more than 150 projects initiated by Fortune Global 500 firms).

What makes it even more grating for city officials, says Brokerage China, a zimitei, is that the share price of Shanghai International Airport (SIA), the company that owns Pudong – the bigger of Shanghai’s two airports – has climbed more than five times over the past 10 years, buoyed by traffic from Suzhou.

Factor in that Suzhou welcomed almost 130 million tourists last year (they come for the city’s waterways and bridges, as well as the nine classical gardens that have been awarded UNESCO World Heritage ranking) and the absence of a home hub is more galling still.

Against these aspirations is the question of whether another airport is really required in the Yangtze River Delta, which is already home to seven airports with annual passenger throughputs of 10 million or more. Existing ones could be expanded, argue some, although Suzhou’s cheerleaders point to air passenger traffic in China growing at more than 10% a year and putting pressure on current capacity.

Arguably a new Suzhou airport would help to alleviate the strain on Pudong and Hongqiao. But the challenge is that other cities are making similar noises, especially Nantong, which is not much more than an hour from Suzhou by train. In fact Nantong has just opened a new terminal to handle another five million passengers a year and it is rumoured to be in pole position for official designation as Shanghai’s third airport – although the aviation regulator denied reports that a final decision had been made earlier this year.

Shanghai-listed SIA has lost about Rmb2 billion ($282.62 million) in market value over the past month, with some analysts laying the blame on the noises coming from Suzhou officials. But to keep that in perspective, the airport operator’s stock is up nearly 500% over the past five years – hitting a recent market capitalisation peak of Rmb170 billion.

Of course, against Suzhou’s claims there are some equally valid technical objections. For starters the air corridors in that part of the Yangtze Delta are already very crowded, so apportioning take-off and landing slots to Suzhou’s new runway will pose logistical challenges.

For that reason alone Shanghai will no doubt be lobbying against the idea. However, with the Civil Aviation Administration pushing for a doubling of the country’s airports to 450 over the next 15 years, Suzhou’s bureaucrats will make a strong argument that at least one should be in their city.

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