Hong Kong is a major international and regional aviation centre. The Hong Kong International Airport (HKIA) is also one of the busiest in the world.

The year saw continued strong growth in both passenger and cargo throughput at the HKIA. In 2000, a total of 32.1 million passengers (excluding 1.24 million in transit) passed through the HKIA, an increase of 10.6 per cent from 1999. The airport also handled 2.24 million tonnes of cargo valued at $862.2 billion, representing a growth of 13.5 per cent and 29.8 per cent respectively over 1999. Aircraft movements increased by 8.7 per cent in 2000 to a total of 181 927, of which 75.6 per cent were wide-bodied aircraft. To cater for the increase in air traffic, the runway capacity was increased from 40 to 45 movements per hour starting from March.

Air transport continues to play an important role in Hong Kong's external trade. Goods carried by air accounted for about 29.4 per cent, 34.1 per cent and 22.5 per cent in value terms, of Hong Kong's total imports, exports and re-exports respectively in 2000.

The $2.1 billion Northwest Concourse of the HKIA's passenger terminal was opened on January 20. The concourse is about 300 metres long and 34 000 square metres in size. It brings the total floor area of the passenger terminal to 550 000 square metres, increasing the size of what was already one of the largest buildings of its type in the world. The opening of the concourse has increased the total number of airbridges from 37 to 48, thereby allowing up to 95 per cent of passengers to board or disembark directly from or to the terminal. It has also expanded the passenger terminal's capacity from 35 million to 45 million passengers a year.

The Airport Authority (AA) has put in place various measures to better serve the needs of transfer passengers, who accounted for about 29 per cent of total passengers at the HKIA in 2000. These include measures to shorten the minimum connection time between flights and the development of retail and catering outlets in the transfer areas. A number of 'cyber-themed' attractions were introduced, including several multimedia lounges, an internet cafe, and 'cyber' shops. The HKIA also became one of the world's first airports to have wireless access to the Internet. A second pay-for-use premium lounge and Arrivals Duty Free outlets were also opened.

To enhance the airport environment, the AA undertook a $46.5 million landscape improvement programme during the year. More than two million trees and seedlings were planted, including 2 287 bauhinia trees (whose flower is the emblem of the HKSAR). The programme will provide a fitting, natural complement to the airport's impressive architecture.

In August, the AA awarded a licence to operate and manage a Marine Cargo Terminal (MCT) to Chu Kong Air-Sea Union Transportation Co. Ltd, for a period of five years. The terminal will allow the HKIA to offer truly intermodal cargo links — air, sea, and land. The facility will have an annual capacity of 300 000 tonnes. Its target opening date is April 2001. Initially, it will have cargo services to and from at least 16 ports in the Pearl River Delta.

To attract more cargo business to the HKIA, the AA invited tenders in October for the development and management of a logistics centre on the airport island. This centre will provide value-added logistics services such as product assembly, labelling and packaging, inventory control, automated storage and retrieval, and various e-commerce services.

To meet the strong growth in cargo traffic, the AA will provide eight more cargo aircraft parking stands in 2001, bringing the total number of dedicated cargo aircraft stands to 21.

A supplementary scheme of airport charges for helicopters came into effect on September 1. Under this charging structure, the minimum landing charge is $331.5 for helicopters up to three tonnes. The AA also announced on November 3 that it would maintain the 15 per cent reduction in aircraft landing and parking charges for the 2001-02 financial year and that it planned to introduce an incentive arrangement, under which airlines would enjoy a rebate on landing charges for services operated to a new destination (a 50 per cent rebate in the first year of operation and 25 per cent in the second year).During the year the AA was accorded an A+ corporate credit (local currency) rating and an A foreign currency rating by the Standard and Poor's ratings service. The HKIA is the first airport in Asia to receive an international credit rating.

The HKIA is well placed to continue to be a major centre of international and regional aviation. The opening of the Hong Kong Disneyland in 2005 and China's accession to the World Trade Organisation are expected to boost air traffic in the Asia-Pacific region. The AA's forecast is that passenger throughput, cargo throughput and aircraft movements at the HKIA will continue to grow at healthy levels in the coming years. The AA is undertaking a Strategic Overview of Major Airport Developments (SOMAD) Study, which would act as the blueprint for growth as the HKIA progresses towards its ultimate design capacity in the long term, forecast to be 87 million passengers and nine million tonnes of air cargo per year.

The SOMAD Study will formulate a long-term airport land use and development strategy. It will help determine the appropriate time-frame, location and capacity for major developments, such as a second passenger terminal complex and additional cargo handling facilities. The SOMAD Study is expected to be completed in the second half of 2001.

In parallel, studies are under way for the 'airport city' project to be developed in the North Commercial District of the airport. This will include facilities such as hotels, commercial offices and recreational complexes.

In 2000, the Air Transport Licensing Authority granted six licences: three to Cathay Pacific Airways (CPA), one to Hong Kong Dragon Airlines (HDA) and two to Air Hong Kong (AHK). At the end of the year, CPA held 10 licences to operate scheduled services to 128 cities, HDA held 10 licences to operate scheduled services to 104 cities and AHK held six licences to operate scheduled services to 38 cities.

CPA launched its new scheduled passenger services to Karachi and introduced new freighter services to three destinations (New Delhi, Penang and San Francisco) in September. At the end of the year, CPA operated scheduled services to 47 destinations world-wide.

The year marked a major development for HDA. The Mainland/Hong Kong Air Services Arrangement signed on February 2 allowed HDA to further expand its services to the Mainland and to convert its non-scheduled services to scheduled services. Subsequently, HDA converted its non-scheduled services to Changsha, Guilin, Haikou, Nanjing and Wuhan to scheduled services in March and launched scheduled services to Sanya in June. HDA also started operating non-scheduled all-cargo services to Shanghai in August. Furthermore, HDA introduced scheduled all-cargo services to Dubai, Amsterdam and Manchester in July, which was a milestone in the development of HDA's services as the airline previously operated only passenger services in the Asian region. At the end of the year, HDA operated scheduled services to a total of 30 destinations, including 17 cities in the Mainland.

AHK continued to operate scheduled all-cargo services to Manchester, Brussels, Dubai and Osaka.

At the end of 2000, the fleets of the three airlines were as follows:

^* wet-leased from Atlas Air, a US carrier

Continental Micronesia suspended its scheduled all-cargo services from Guam to Hong Kong in March. Kitty Hawk International replaced American International Airways in operating scheduled all-cargo services from Los Angeles to Hong Kong in March but subsequently suspended the services in May. On the other hand, new scheduled air services were introduced by five airlines during the year: Pakistan International Airlines commenced scheduled passenger services between Karachi/Islamabad and Hong Kong via Bangkok in May; and between Lahore and Hong Kong in November; P. T. Mandala Airlines of Indonesia began scheduled all-cargo services between Batam and Hong Kong in May; Angel Airlines of Thailand introduced scheduled passenger services between Bangkok and Hong Kong in July; Ansett International Limited of Australia commenced scheduled passenger services between Melbourne and Hong Kong in October; and Philippine Airlines began scheduled passenger services between Subic Bay and Hong Kong in November and between Laoag and Hong Kong in December. As a result of these changes, the number of scheduled airlines serving Hong Kong has increased to 64. At the end of 2000, these airlines together operated about 1 750 direct round-trip scheduled services weekly between Hong Kong and about 130 cities world-wide. In addition, an average of about 50 non-scheduled services were operated to and from Hong Kong each week.

To support the dual-runway operations while maintaining a high level of safety, a Precision Runway Monitor (PRM) was installed at the HKIA and commissioned in February, making the HKIA one of the few airports in the world equipped with this state-of-the-art equipment. By using the data provided by the PRM, air traffic controllers are able to provide timely information to aircraft approaching and departing the runways, thus ensuring flight safety and providing scope for increasing the runway capacity.

Upon completion of familiarisation training of air traffic control (ATC) staff, the Backup Air Traffic Control Centre/Tower was commissioned in April. To ensure the readiness of the facilities, drills were conducted regularly.

The Civil Aviation Department (CAD) has taken a number of measures to improve the provision of ATC services. These include enhancing the training of air traffic controllers, streamlining ATC operational procedures, stepping up staff supervision and upgrading the ATC systems to provide better conflict alert functions.

Three experts from the United Kingdom Civil Aviation Authority (UKCAA) were invited by the CAD to review the ATC system in Hong Kong from December 4 to 8. The CAD believed it was opportune that a review be undertaken to ensure that Hong Kong is well prepared for the challenges brought about by the anticipated air traffic growth in the foreseeable future. During their stay in Hong Kong, the experts reviewed the management and organisation of the CAD's Air Traffic Management Division, the ATC incidents investigation procedures, the ATC staff training and operations. They concluded that the ATC operation in Hong Kong was safe and of a high standard. Nevertheless, the CAD will take improvement measures to further enhance operational safety.

To ensure the provision of efficient ATC services in the Pearl River Delta area, the department continued to maintain close liaison with the civil aviation authorities of the Mainland and Macau. In 2000, a series of tripartite meetings on ATC operations was held to refine the flight procedures for airports in the area, including Hong Kong, Shenzhen, Zhuhai and Macau, and to enhance ATC co-ordination arrangements among these airports.

The CAD plans to convert the current ground-based ATC systems to satellite-based Communications, Navigation and Surveillance/Air Traffic Management (CNS/ATM) systems by around 2016. Given the scale and complexities of the CNS/ATM systems, the work will be implemented in three phases as follows:

Study Phase — Systems Study and Analysis (1999-2004)

Trial Phase — CNS/ATM Trial and Evaluation (2000-2007)

Implementation Phase — CNS/ATM Implementation and Transition (2003-2016)

Study of these next-generation ATC systems continued in 2000. To gain operational experience, trials were conducted by the department on five CNS/ATM elements during the year, with encouraging results. Trials on four other elements were scheduled for 2001.

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. The standard currently adopted in Hong Kong is the NEF 25 contour, which is more stringent than the standards adopted by some other airports. According to the results of the Environmental Impact Assessment study conducted by the AA prior to airport opening, apart from a few residential units in Sha Lo Wan, other residential areas in Hong Kong are outside the NEF 25 contour. As for the affected residents of Sha Lo Wan, the AA had provided them with an ex gratia allowance for installing noise insulation.

While other residential areas are outside the NEF 25 contour, the Government is mindful of the concern of some residents. The CAD continued its effort in exploring and implementing all practicable aircraft noise mitigating measures. These include noise abatement take-off and landing procedures, prohibition of landing/take-off of relatively noisy aircraft at night and, whenever possible, use of flight paths which cover fewer residential areas. Furthermore, the computer-based aircraft noise and flight track monitoring system was expanded to cover 15 monitors located at strategic locations under the flight paths or in the vicinity of the airport.

Between November 17 and 24 and as part of its global audit programme, the International Civil Aviation Organisation (ICAO) conducted a safety oversight audit on the civil aviation management system of Hong Kong in respect of aircraft operations, aircraft airworthiness and personnel licensing. The objective of the audit was to assess the effectiveness of Hong Kong's safety oversight system in ensuring the implementation of relevant ICAO Standards and Recommended Practices. An audit report will be issued by the ICAO in mid-2001.

The Aviation Security Ordinance and Regulation provide comprehensive local legislation to implement aviation security-related conventions and agreements promulgated by the ICAO. The Hong Kong Aviation Security Programme (HKASP) developed by the Government, in consultation with the airport operators, airlines and other concerned parties, has laid down the aviation security requirements for different operators at the HKIA. These requirements form the basis for implementing effective aviation security measures at the airport, which are closely monitored by the Government to ensure that they are up to the highest international standards.

In March, the CAD implemented a Regulated Agent Regime in accordance with the requirements of the ICAO to further enhance air cargo security. The regime specifies requirements for the consignment of cargo for carriage on passenger flights and establishes a system for cargo agents or entities that meet the relevant security requirements of the HKASP to be registered with the CAD as a Regulated Agent. With the support of the industry, the regime has been operating smoothly since implementation.