Is Hong Kong airport the air cargo world leader?
For years, Hong Kong International Airport (HKG) has been regarded as the world’s busiest air cargo hub. Here, AeroTime investigates the reasons why.
With a history that dates back to 1998, Hong Kong International Airport (HKG) has been in operation for more than two decades. During this time, HKG has not only served as a focus airport for passenger airlines situated in Asia-Pacific, but also for a multitude of cargo carriers across the globe.
HKG first gained the title of the world’s largest cargo hub in 2010. Since then, the airport has maintained its status as the world’s busiest cargo airport for 10 consecutive years. Additionally, HKG currently holds the world record for handling the largest amount of cargo. Back in 2017, HKG airport handled more than five million metric tonnes of freight.
“HKIA is the first airport in the world to have ever handled over five million tonnes of cargo and airmail in a year,” Fred Lam, Chief Executive Officer of Airport Authority Hong Kong (AA), was quoted in a statement in 2018.
In 2020, HKG was dethroned by its biggest rival Memphis International Airport (MEM) in terms of total cargo tonnage carried. However, HKG remains the busiest cargo hub when referring to international freight, according to the Airports Council International (ACI) report dated April 22, 2021.
Factors keeping HKG airport on the world stage
Alongside international recognition, there are plenty of reasons why HKG can be called the world’s leading air cargo hub.
Firstly, HKG airport has a geographical advantage.
Located in the heart of the Asia-Pacific, HKG can reach approximately half of the world’s population within five hours of flying. Around 120 airlines link HKG airport with 220 destinations, including 50 cities in Mainland China, the airport’s data shows.
Secondly, Hong Kong is considered as one of the major getaways between mainland China and oversea countries.
According to the Hong Kong Trade Development Council (HKTDC) research paper “Logistics Industry in Hong Kong'', Mainland China is one of the biggest export and import markets for items carried by air. Thus, many Chinese goods are imported to Hong Kong and then re-exported to other countries by air. According to a Construction Industry Council (CIC) report, approximately 50% of Hong Kong’s exports originated from China and approximately 55% were destined for China in 2019.
According to American think tank Heritage Foundation, Hong Kong has been the world's freest economy for 25 consecutive years. Its competitive advantages ensure that HKG airport is a preferred hub for air cargo companies.
In an interview for Air Cargo Week, Volga-Dnepr Airlines vice president, SCO and CCO for Asia & Pacific, Joanna Li said that Hong Kong airport benefits from the territory’s “free port policy, supported by streamlined Customs, trade regulations and business-friendly environment that are the backbone of the airport’s development and the main growth drivers.”
Furthermore, HKG airport has an extensive air cargo infrastructure.
Hong Kong airport has five first-tier air cargo handling facilities, with over seven million tonnes of annual handling capacity. It also boasts 55 cargo-only parking stands for freighters, the Hong Kong government civil aviation fact sheet shows.
Long-term cargo commitments...
Hong Kong International Airport is on track to meet deadlines for expansion, which will increase its annual air cargo handling capacity from seven to 10 million metric tonnes.
In September 2021, HKG announced it had completed its new runway pavement works. The airport will be ready to open its third runway in 2022, approximately six years after the construction commenced. The construction of the third runway is part of the Three-Runway System (3RS) project, which also includes terminal expansion and other infrastructural works at HKG airport.
The Airport Authority Hong Kong (AA) is also developing an Airport City at HKG airport comprising office towers, a logistics center and a performance venue, retail, dining and entertainment facilities. These projects will be completed in phases from 2023 to 2027.
“3RS is an integral part of our vision to transform from a ‘city airport’ into an ‘Airport City’. According to an earlier forecast, 3RS would generate direct, indirect and induced contributions of about 5% of the gross domestic product of Hong Kong by 2030,” Carrie Lam, Chief Executive of the Hong Kong Special Administrative Region, remarked.
Several reports point to the e-commerce market as one of the main forces for air cargo growth. According to Boeing, e-commerce, which was already growing at “double-digit rates” prior to COVID-19, has accelerated its impact on the air cargo market. Boeing said that the “shift to more online work and shopping were positives for growth in air cargo”.
In 2018, a joint venture led by Cainiao Network has been awarded with the tender to develop a new premium logistics centre situated near to the Hong Kong airport. Expected to commence operation in 2023, the centre will feature an estimated gross floor area of 380,000sqm, making it the third-largest warehouse in Hong Kong. The new hub is expected to help “stimulate additional air cargo flow" in the region. The development of the logistics centre at Kwo Lo Wan also aligns with the cargo development strategy at HKG airport.
… and challenges
The outbreak of COVID-19 has posed many challenges to the aviation industry, including air cargo traffic at Hong Kong International Airport. Despite remaining the busiest international cargo airport in the world by handling 4.5 million tonnes of cargo, HKG saw a year on year decrease of 7%.
More than half of Hong Kong's air freight is carried in the holds of passenger aircraft rather than pure freighters. Due to the decline in passenger flights during the COVID-19 pandemic, both belly capacity of cargo and the tonnage handle has dropped.
However, Airport Authority Hong Kong (AAHK), together with HKG, has been working closely with airlines and the government “to maintain an agile capacity supply by mounting additional flights to carry cargo”, according to a statement given to AeroTime by Hong Kong International Airport seen by AeroTime News on August 4, 2021.
Some airlines have refitted passenger aircraft to “preighters” to provide all-cargo services. Due to the greater number of preighters, HGK airport established tailored handling procedures and facilitating measures.
“In 2020, around 26,000 preighters had flown in or out of HKIA, and carried around 9% of the cargo at the airport,” the Airports Authority of Hong Kong (AAHK) spokesperson told AeroTime News.
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