Airport Authority Awards New Cargo Terminal Franchise to Cathay Pacific Services Limited

(Hong Kong, 18 March 2008) — The Board of Airport Authority Hong Kong today awarded a non-exclusive, 20-year franchise to design, construct and operate a new cargo terminal at Hong Kong International Airport (HKIA) to Cathay Pacific Services Limited, a wholly owned subsidiary of Cathay Pacific Airways Limited. The new terminal and recently completed enhancements to the cargo apron, taxiways and aircraft stands will equip HKIA to meet future demand for cargo services and to maintain its position as the region’s premier air cargo hub.

Airport Authority Chief Executive Officer Stanley Hui said, “The new cargo terminal will reinforce the competitiveness of HKIA as a regional and international air cargo hub. It will provide additional choices for airlines, shippers and freight forwarders. And it will bring substantial economic benefits, in the form of new jobs and business opportunities, to Hong Kong.”

Scheduled to open in the second half of 2011, the new terminal will have an annual capacity of about 2.6 million tonnes and increase the airport’s total general and express cargo handling capacity to 7.4 million tonnes per annum. The new facility will be located on a 10-hectare site in the cargo terminal area.

According to Cathay Pacific Services, construction of the new terminal will create over 400 jobs. When it starts operation, the facility will employ more than 1,700 people.

“The new operator will bring additional competition to Hong Kong’s air cargo industry and build on the reputation for quality and efficiency that HKIA and its existing general cargo operators have achieved,” noted Mr Hui. The number of general and express cargo operators at HKIA will increase from three to four.

The decision to build a new cargo terminal was made after the Airport Authority held extensive consultations with Hong Kong’s air cargo and logistics industry. In December 2006, the Airport Authority called for pre-qualification proposals, which was followed by invitation for submission of business plans. The Airport Authority assessed the business plans and decided to award the franchise to Cathay Pacific Services as a result of an open and competitive tender process. The Airport Authority also invited the Independent Commission Against Corruption as an independent advisor to oversee the process.

Driven by the rapid expansion of the Mainland Chinese economy and robust global trade, cargo throughput at HKIA rose 4.5% in 2007, to 3.74 million tonnes. The air cargo industry handled over HK$1.9 trillion worth of goods in 2007, representing 35% of Hong Kong’s total external trade. HKIA is the world’s busiest international cargo airport for the 11th consecutive year.