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 2002, there were 73 scheduled airlines serving Hong Kong. These airlines together operated about 3 900 scheduled flights weekly between Hong Kong and some 140 cities world-wide. In addition, an average of about 30 non-scheduled flights were operated to and from Hong Kong each week.

Air Traffic in 2002

After a year of decline, both passenger and cargo throughput at the HKIA registered a significant rebound in 2002. A total of 33.45 million passengers (including 0.86 million in transit) passed through the airport, representing an increase of 3.8 per cent from 2001. The growth in air cargo handled at the HKIA was even stronger, surging by 19.5 per cent to 2.48 million tonnes in 2002. The corresponding value also increased by 10.4 per cent to $909.8 billion. The substantial increase in air cargo was attributed mainly to the growth in exports to the United States and other Asian cities. It was also partly due to the closure of the sea ports in the west coast of the United States in September and October, which necessitated the delivery of goods by air.

    Aircraft movements continued to increase. In 2002, a total of 206 705 aircraft landed and took off at the HKIA, representing a growth of 5 per cent over 2001. To cater for the increase in aircraft movements, with effect from March, the hourly runway capacity was increased from 47 to 49 movements with the total runway movements in any two consecutive hours not exceeding 94.

    Reflecting the important role of air transport in Hong Kong's external trade, goods carried by air accounted for about 32.2 per cent, 30 per cent and 24.4 per cent, in value terms, of Hong Kong's total imports, exports and re-exports respectively in 2002.

Airport Operations and Development

Despite difficult conditions for the industry world-wide, the HKIA managed to achieve record high traffic figures in terms of passenger and cargo throughput as well as aircraft movements.

    The HKIA continued to garner international recognition and awards during the year. Most notably, the HKIA was named 'Cargo Airport of the Year' by the London-based Air Cargo News and for the second year running 'Airport of the Year' in a large-scale passenger survey conducted by the UK Skytrax Research.

    The Airport Authority (AA) continued to enhance the airport's passenger and cargo handling facilities. In March, the AA awarded a major contract for the complete overhaul of the passenger terminal's East Hall SkyMart airport retail complex. The entire project, worth $600 million, is expected to provide 6 800 square metres of floor space, with more retail outlets, creating a more spacious and relaxing environment for passengers. In October, the AA awarded a 15-year franchise to DHL International (Hong Kong) Ltd for the development of a dedicated express cargo terminal at the HKIA. With a total investment of $780 million, the terminal will handle over 400 tonnes of express cargo daily upon its planned opening in 2004.

    The HKIA is the world's busiest airport for international air cargo, since 1996. In September, the AA and the International Air Cargo Association co-hosted the Air Cargo Forum 2002, the world's leading air cargo convention and exhibition that attracted more than 4 000 delegates and 250 exhibitors from 69 countries. The Mainland also participated in the event for the first time.

    Recognising the importance of fostering cooperation with other airports in the Pearl River Delta, the AA continued to participate actively in the A5 Forum together with the airports of Guangzhou, Shenzhen, Zhuhai and Macau. In November, a Letter of Intent on flight diversions and emergency support was signed by the five airports at the A5 Forum held in Macau. The Forum had also set up task forces to explore cooperation opportunities in areas such as facilitation in passenger and cargo processing and joint promotion of services. In October, the Airport Authority (Permitted Airport-related Activities) Order took effect to permit the AA to undertake certain specified airport-related activities outside Chek Lap Kok.

    The AA announced in December that it would extend the 15 per cent discount in aircraft landing and parking charges for another year until December 31, 2003. The extension was estimated to save airline operators some $320 million a year.

    The Government and the AA will continue to work closely with the airlines and the airport community to further strengthen Hong Kong's position as an international and regional aviation centre.

Air Services

In 2002, the Air Transport Licensing Authority granted five licences: two to Hong Kong Dragon Airlines (HDA), one to AHK Air Hong Kong (AHK) and two to Helicopters Hong Kong Limited (HHK). At year-end, Cathay Pacific Airways (CPA) held 10 licences to operate scheduled services to 130 destinations, HDA held 12 licences to operate scheduled services to 106 destinations, AHK held seven licences to operate scheduled services to 52 destinations, and HHK held two licences to operate scheduled services to two destinations.

    There was a temporary decrease in air services demand for both passengers and cargo after the terrorist attacks in the United States on September 11, 2001. The market, however, quickly recovered towards the middle of 2002. In order to cope with the increasing demand, CPA progressively increased the frequency of its scheduled passenger services, starting in June, to a number of destinations including Manila, Jakarta, Bangkok, Kuala Lumpur, Los Angeles and Vancouver. In August, CPA launched its new scheduled all-cargo services to Milan. These increases have brought the frequency of services provided by the airline back to pre-September 11 incident levels. To cope with the increases in services, all five passenger aircraft and one freighter which were temporarily parked due to service reduction after the September 11 incident resumed service in August. In November, CPA took delivery of the first of three long-range Airbus 340-600 aircraft.

    In addition to the above, CPA took over AHK's operation of freighter services to Dubai, Brussels and Manchester in July as part of the restructuring of the operations of the two airlines. At the same time, two of the three Boeing B747-200 freighters that were previously leased by CPA to AHK were returned to the former. At year-end, CPA operated scheduled services to 47 destinations world-wide.

    HDA's services continued to develop during the year. The airline took delivery of two new aircraft in March, which enabled the airline to increase the frequency of its services to 14 cities in the Mainland, in particular those to Shanghai (from 48 to 56 times a week) and Beijing (from 37 to 42 times a week). In June, Dragonair took delivery of a third new aircraft and commenced scheduled passenger and all-cargo services to Taipei in July. At year-end, HDA operated scheduled services to a total of 31 destinations, including 18 cities in the Mainland.

    AHK continued to operate scheduled all-cargo services to Dubai, Brussels, Manchester, Osaka and Seoul until July when, as part of the restructuring of its operations together with those of CPA, the airline stopped serving Dubai, Brussels and Manchester and focused on developing its network in Asia. In the same month, the airline commenced scheduled all-cargo services to Tokyo using a wet-leased Airbus A300 freighter.

    AHK was previously a wholly-owned subsidiary of CPA. In October CPA and DHL Worldwide Express (DHL) concluded an agreement under which DHL acquired a 30 per cent stake in AHK from CPA.

    At the end of 2002, the fleets of the three airlines were as follows:

    As regards non-Hong Kong airlines, eight airlines commenced scheduled passenger services to Hong Kong in 2002: Ethiopian Airlines between Addis Ababa and Hong Kong in January; Finnair and Orient Thai Airlines between, respectively, Helsinki and Hong Kong and Bangkok and Hong Kong in February; Air Philippines and Yunnan Airlines between, respectively, Laoag and Hong Kong and Kunming and Hong Kong in June; Mandarin Airlines between Kaohsiung and Hong Kong in August; Turkish Airlines between Istanbul and Hong Kong in October, and Australian Airlines between Cairns and Hong Kong in November. In addition, three other airlines commenced scheduled all-cargo services to Hong Kong during the year: Pacific East Asia Cargo between Clark (Philippines) and Hong Kong in April; Gemini Air Cargo and Kalitta Air between USA and Hong Kong in July.

    On the other hand, Angel Airlines and Myanmar Airways both suspended their scheduled passenger services between, respectively, Thailand and Hong Kong and Yangon and Hong Kong, in January. Airfreight Express suspended its scheduled all-cargo services between London and Hong Kong in February. Crossair took over the operations of Swiss Air in April and the airline was later renamed Swiss International Airlines, in August. In October, Japan Airlines took over the operations of Japan Air System in Hong Kong.

Air Traffic Control

The overall air traffic control (ATC) equipment systems continued to perform in a stable and reliable manner during the year. To further enhance the operational efficiency and increase the data processing capacities so as to handle effectively the projected increase in air traffic movements in Hong Kong and the Pearl River Delta area, a number of major ATC equipment systems underwent an enhancement programme. The enhancement programme is due to be completed in March 2003.

    The contract to replace the Route Surveillance Radar (RSR) at Mount Parker, a long-range primary radar, was awarded in May with a ready-for-service target of end-2003. The refurbishment works began in September.

    Under the auspices of the International Civil Aviation Organisation (ICAO), a new initiative known as the Reduced Vertical Separation Minimum (RVSM) programme was adopted by Hong Kong and its neighbouring Flight Information Regions (FIR) as well as the Sanya Area of Responsibility with effect from November 1. The RVSM reduced the vertical separation minimum between aircraft operating between altitudes of 29 000 feet and 41 000 feet from 2 000 feet to 1 000 feet. As a result, the ATC can provide aircraft with more choices of cruising levels to achieve better fuel economy and reduce ground delay as well as to enhance airspace capacity and optimise operational efficiency.

    To strengthen the ability of the Air Traffic Management Division (ATMD) to cope with the anticipated increase in the volume and complexity of air traffic operations within the Pearl River Delta, the Civil Aviation Department (CAD) appointed the United Kingdom Civil Aviation Authority to conduct a detailed review in December 2000 of ATC operations in the Hong Kong FIR. Pursuant to the recommendations of the review, the ATMD had reorganised its structure and established a Safety and Quality Section, the primary roles of which were to develop a Safety Management System (SMS) and to oversee its implementation in ATC operations and associated activities in accordance with safety management principles.

    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 2002, a series of tripartite meetings on ATC operations were held to refine the flight procedures of airports in Hong Kong, Shenzhen, Zhuhai and Macau, and to enhance ATC coordination among these airports.

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

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 is being implemented in three phases as follows:

    Study Phase — Systems Study and Analysis (1999–2005)

    Trial Phase — CNS/ATM Trial and Evaluation (2000–2008)

    Implementation Phase — CNS/ATM Implementation and Transition (2001–2016)

    Studies and trials of these next-generation ATC systems continued in 2002. To gain further operational experience, trials on Automatic Dependent Surveillance/Controller-Pilot Data Link Communications (ADS/CPDLC) with Airbus A330/A340 aircraft were conducted in the first half of the year, together with the downlinking of live meteorological data from the aircraft. Trials on the Aeronautical Telecommunication Network (ATN) and Air Traffic Services Message Handling System (AMHS) with overseas authorities and local organisations continued during the year. A special tripartite ATN trial between the Mainland, Thailand and Hong Kong was conducted in September and October, with satisfactory results. These helped to facilitate the transition to ATN operations scheduled to commence in 2003.

    In addition, trials on Air Traffic Services Inter-facility Data Communications (AIDC) with the Guangzhou authorities were conducted. The experience gained assisted the fine-tuning of the human-machine interface and the arrangements for transfer of air traffic control.

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. The NEF 25 contour currently adopted in Hong Kong 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 and, whenever possible, use of flight paths which cover fewer residential areas. Furthermore, from March 1 the CAD required all aircraft departing to the northeast of the airport to adopt the new noise abatement departure procedures as revised by the ICAO. Starting from July 1, all 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) are prohibited from landing or taking off at the HKIA following an amendment to the Civil Aviation (Aircraft Noise) Ordinance. These new measures further alleviated the aircraft noise impact on residents in the vicinity of the flight paths.

    Expansion and upgrading works to enhance the monitoring capability of the existing computer-based aircraft noise and flight track monitoring system were under way. Completion of the works is scheduled for 2003.