Hong Kong’s market for aircraft and aircraft parts has grown significantly in the last few years due to the increase in aircraft movement, passenger numbers, and cargo volume. With the global economic downturn, Hong Kong International Airport (HKIA), the world’s busiest cargo airport, has also taken a hit. However, air traffic statistics show the resilience of HKIA. In November 2009, HKIA handled 344,000 tons of air cargo, 3.8 million of passengers and 23,515 total aircraft movements representing year-on-year increase of 16.4 percent in air cargo throughput, and a decline of 0.4 percent and 5.2 percent respectively in passenger volumes and aircraft movements. Between January and November 2009, HKIA handled in total 42 million passengers, 3 million tons of air cargo, and 255,280 total aircraft movements representing a decline of 5.8 percent, 10.8 percent and 7.6 percent respectively in passenger volume, air cargo throughput and total aircraft movements compared to the total figures in 2008.
While the market environment for the global aviation industry will remain challenging in 2010, the long-term industry outlook for Hong Kong is still very promising. Hong Kong is an international air traffic hub with 90 airlines operating extensive flight connections to 150 destinations worldwide. Many travelers to Asia use Hong Kong as a first stop to other points in the region. Similarly, many mainland China tourists and business travelers make flight connections in Hong Kong for overseas itineraries. In terms of air cargo, high-value goods manufactured in southern China are shipped out of Hong Kong, taking advantage of its reliable, transparent, and secure trade and logistics systems.
Hong Kong relies entirely on imports of aircraft, aircraft engines, and aviation equipment to meet its needs, as there are no aircraft, engine, equipment or components manufacturers in Hong Kong. Maintenance Repair Overhaul (MRO) and business aviation have been the two major growth areas for Hong Kong in the last few years.
The growth of MRO is attributable to the increase in air traffic, the emergence of low cost airlines, and Hong Kong Aircraft Engineering Company’s (HAECO – Hong Kong’s primary aeronautical engineering and maintenance services company) new maintenance contracts signed with major airlines in recent years. Through joint venture partnerships, HAECO has expanded into different cities in China and overseas. U.S. aircraft parts and engine suppliers should note these partnership arrangements.
Fueled by an increasing number of high net-worth individuals and business magnates in Hong Kong and China in the last decade, the business aviation market also saw a steady annual growth rate of 35-40 percent in executive jet movements since 2003. In November 2009, Honeywell forecasted global delivery of 11,000 new business jets from 2009 through 2019, generating estimated industry sales of US$200 billion. The Asia Pacific region is a new frontier with exceptional potential for private jet usage in the region. Among major Asia Pacific cities, Hong Kong has the fastest-growing business aviation terminal in Asia. A third business jet hangar is under construction at Hong Kong International Airport to cater for the growing demand.
Macau’s gaming sector has also stimulated the city’s long-term air traffic growth, including a sizable increase in business aviation. However, in 2009, the Macau International Airport handled 4.3 million passengers, 52,260 tons of air cargo, and 40,601 total aircraft movements representing a sharp decline of 16.6 percent in passenger volumes, 48 percent in air cargo throughput and 18 percent in total aircraft movements compared to 2008. While Macau’s aviation industry is facing challenges brought about by the economic downturn and direct crossstrait flights between mainland China and Taiwan, the future remains promising due to the expected growth of business jet traffic, helicopter traffic, air cargo trade and an increasing number of airlines flying into Macau.
• Air traffic control use simulators
• Business jets and related services
• Consumable aircraft parts and expendable items
• Training for air traffic controllers and maintenance personnel
There are less than ten major aircraft components & parts distributors and trading companies in Hong Kong. Most of these distributors also sell to the MRO market and airlines in China and other Asian countries. U.S. aviation industry manufacturers should consider working with Hong Kong based distributors to access markets in China and Asia.