Development of Airfreight Hubs in the Greater Pearl River Delta

Development of Airfreight Hubs in the Greater Pearl River Delta

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Inhaltsangabe:Abstract: Everything has beauty, but not everyone sees it goes a famous saying by Confucius. My wish in writing this paper is to convince readers of the peculiar beauty and importance of the highly dynamic aviation landscape of the southern Chinese Pearl River Delta. Airfreight is an essential and highly sophisticated part of an economy s logistics infrastructure. A functioning infrastructure is vital for the development of an economy, in particular for its international trade. As trade is a key component in China s economic success formula, demand for an efficient infrastructure is high. Air transportation has become one of the most effective tools to explore and serve world markets. In today s highly competitive business world, just-in-time delivery and good customer service are absolutely crucial. The overall trend towards fast reliable delivery and the transformation of China s economy along with the value chain of production, have boosted demand for air transportation. Due to these developments, the air cargo market, which is still at low levels particularly in domestic transportation, is one of the fastest growing markets in China. The regional focus of this study is on the economic powerhouse of China, the Pearl River Delta (PRD) located in the southern province of Guangdong. Everyone who knows the highly industrialised landscape of the PRD would probably agree, that the region s nickname factory of the world is more than appropriate. The PRD has the highest per capita output in China and generates about one third of national exports. The Greater Pearl River Delta (GPRD) consists of the PRD and the Special Administrative Zones Hong Kong and Macao. In many respects, it is one of the most interesting economic entities of the world. Economy and infrastructure are integrated on a very high level. The GPRD features many extremes: its strong economic power, its rapid growth that has been the highest in China for many years, its population density and last but not least, its aviation landscape. Within radial distance of about 100 km, five international airports are at service, creating the highest airport density in the world. Three of these airports are among China s top five airports. The clear leader among them is Hong Kong International Airport (HKIA), which has established itself as a major hub in Asia and has been the airport with the highest international air cargo throughput of the world for many years. Its dominant counterpart for domestic traffic is located some 100 km north in the very heart of the PRD, Guangzhou Baiyun International Airport (GBIA). The strong air cargo business of HKIA, that is largely fed by PRD freight has been watched closely by Mainland administrations. Liberalised air traffic policy in recent years has rapidly expanded China s own international air cargo traffic. To support this expansive strategy, a completely new airport was built to replace the old GBIA, featuring the biggest and most modern air cargo facilities in China. This new airport might take substantial business away from HKIA in the future. The focus of this paper is to examine the competitive position of the two airports and to forecast their future role in the southern Chinese and Asian air cargo market. GBIA s potential ability to catch up with HKIA as major air cargo hub in Southern China brings important implications for the region. While macroeconomic factors will also be taken into account, the emphasis of this paper is on the microeconomic approach of the two airports competitive perspectives. Little literature has been written about the topic. This analysis is founded on available resources such as logistics literature and journals as well as studies and publications by HKIA, which has a very pro-active information policy. A large share of data used was gathered through a field study conducted in late spring 2005 in Guangzhou. Eleven branch and airfreight managers of both local and international cargo agents were extensively interviewed about the PRD air cargo market and the regional airport landscape. Much additional information was gathered by minutes of meeting with airline representatives in Guangzhou and Shenzhen. The paper is structured in nine sections: While the first part gives a short introduction to the aviation industry in China, section two takes a closer look at the Chinese airfreight market. Part three examines the macroeconomic structure of the GPRD and provides a detailed economic and logistics analysis of the region, while part four analyses the local air cargo market. The two sections give a comprehensive description of the two airports in the focus of this paper. Section seven of the paper highlights the air cargo industry dynamics and the following part provides an in-depth comparative analysis of the two airports based on the fundamental data and additional information provided by the field study. This section also takes a closer look at external factors affecting the overall GPRD air cargo market. Moreover, an introduction to other competing airports in the region is given. Finally, part nine evaluates the two airport s future development prospects, based on the outcome of this study. Table of Contents: TABLE OF CONTENTS2 TABLE OF ABBREVIATIONS6 I.EXECUTIVE SUMMARY8 II.ACKNOWLEDGEMENT10 1.INTRODUCTION TO CHINA S AVIATION INDUSTRY11 1.1Administration11 1.2Airlines12 1.2.1The first airlines12 1.2.2Market Consolidation and the emergence of the Big Three 13 1.2.3Recent Developments13 1.3Airports and supporting Infrastructure13 1.3.1Change in ownership structure13 1.3.2Chinese airports income structure14 1.3.3Foreign participation15 1.4Air traffic rights policy15 1.4.1Air traffic rights in China15 1.4.2Air traffic rights in Hong Kong16 2.THE AIR CARGO MARKET IN CHINA17 2.1General characteristics of air cargo17 2.2Types of air cargo17 2.3Air cargo growth trends18 2.4Air cargo in China19 2.4.1Emergence of an industry19 2.4.2Air cargo market structure22 2.4.3Major cargo airlines24 2.4.4Major cargo airports26 3.THE GREATER PEARL RIVER DELTA29 3.1Basic facts29 3.2Administration31 3.3Economy32 3.3.1Economic structure32 3.3.2Rise of the GPRD s economy34 3.3.3Regional breakdown36 Economic Zone37 PRD39 PRD41 PRD42 Kong45 Kong's trade pattern46 3.3.4Regional comparison - GPRD and YRD49 3.3.5Economic outlook50 3.4Logistics structure51 3.4.1Regional breakdown52 Kong54 4.AIR CARGO IN THE GPRD56 4.1Regional distribution57 4.2Major commodities57 4.3Major air cargo markets58 4.4Air cargo in Hong Kong58 4.4.1Structure of air cargo flows in Hong Kong61 4.5Airports in the GPRD62 5.GUANGZHOU BAIYUN INTERNATIONAL AIRPORT68 5.1Location69 5.2Administration69 5.3Financing70 5.4Facilities71 5.5Customs73 5.6Principal Carrier73 5.7Route network74 5.8Air cargo market structure75 5.9Other76 6.HONG KONG CHEK LAP KOK INTERNATIONAL AIRPORT77 6.1Location78 6.2Administration79 6.3Financing79 6.4Facilities80 6.4.1Cargo handling facilities 1st tier80 1 HACTL80 Airfreight Terminal AAT81 Cargo Terminal ECT81 6.4.2Cargo handling facilities 2nd tier81 Freight Forwarding Center81 Logistics Centre81 Cargo Terminal82 6.5Intermodal infrastructure82 6.6Customs83 6.7Principal carrier83 6.8Route network85 6.9Air cargo market structure85 6.10Other87 7.THE AIR CARGO INDUSTRY DYNAMICS89 7.1Demand side89 7.1.1Air cargo volume potential89 7.1.2The air cargo community89 agents/ freight forwarders90 Regulatory body91 Providers91 7.2Supply side91 8.GBIA AND HKIA ANALYSIS OF COMPETITIVE FACTORS94 8.1Air cargo potential of the GPRD94 8.2Catchment area of GBIA and HKIA94 8.3Costs95 8.4Geographical location97 8.5Capacity98 8.6Connectivity, Frequency and Network98 8.7Customs99 8.8Infrastructure101 8.9Intermodal connectivity101 8.10Company s aviation policy102 8.11Cargo Agent s use of GPRD airports102 8.12Influential factors on the development of GPRD airport landscape103 8.12.1Political Factors103 8.12.2China s WTO entry104 8.12.3Closer Economic Partnership Arrangement CEPA105 8.12.4Improvement of soft factors105 8.12.5The Taiwan issue106 8.13Competitive Landscape106 8.13.1Competing airports for origin/destination traffic107 (SZX)107 (MFM)108 8.13.2PRD A5 Forum108 8.13.3Competing airports for transshipment traffic109 Pudong (PVG)110 (PKG)111 (TPE)111 (SIN)112 Incheon (ICN)112 (BKK)113 9.CONCLUSION - FUTURE ROLE OF GBIA AND HKIA IN THE GPRD AIR CARGO MARKET113 APPENDIX I.EXPLANATORY NOTES117 APPENDIX II.FIELD STUDY QUESTIONNAIRE CHINESE118 APPENDIX III.FIELD STUDY QUESTIONNAIRE ENGLISH122 APPENDIX IV.FIELD STUDY - AIRPORT COMPETITIVE RATING OUTCOME126 REFERENCES I.FIELD STUDY: INTERVIEW PARTNERS127 Domestic logistics companies127 International logistics corporations127 Other interview partners127 REFERENCES II.LITERATURE AND PUBLICATIONS129 REFERENCES III.ONLINE RESSOURCES132Diagram 1 shows the development of the GPRDa#39;s air cargo volume and growth in terms of airport throughput in recent years213: GPRD airports - air cargo throughput and growth 0 1000 2000 3000 4000 5000 1 0 0 0 t o n n e s -5 0 5 10 15 20anbsp;...

Title:Development of Airfreight Hubs in the Greater Pearl River Delta
Author: Jana Schebera - 2006-06-25

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