Hong Kong and Shanghai Airports Sign Joint Venture Agreement to Strengthen Cooperation

(12 October 2009) — Shanghai Airport Authority (SAA) and Airport Authority Hong Kong (AAHK) signed a cooperation agreement in Shanghai today for the establishment of the Shanghai Hong Kong Airport Management Co., Ltd (JV). The joint-venture company will enhance collaboration between and further develop strengths of the airports in Shanghai and Hong Kong.

The signing ceremony was witnessed by Han Zheng, Deputy Secretary of the Communist Party of China (CPC) Shanghai Municipal Committee and Mayor of Shanghai, Henry Tang Ying-yen, Chief Secretary for Administration of the HKSAR, Eva Cheng, Secretary for Transport and Housing of the HKSAR, and Dr Marvin Cheung Kin-tung, Chairman of AAHK. Wu Nianzu, Chairman and President of SAA, and Stanley Hui Hon-chung, Chief Executive Officer of AAHK, signed the agreement on behalf of the respective parties. He Weiguo, Party Secretary and Vice Chairman of SAA, officiated the ceremony.

In October 2003, SAA and AAHK signed a letter of intent (LOI) on closer cooperation under the Shanghai Municipal People’s Government’s call for enhancing Shanghai-Hong Kong collaboration in eight areas, including airports, marine logistics and the World Expo. Under the LOI signed in Hong Kong, a series of cooperation initiatives, from training and development to business consultation, have been launched in recent years.

The establishment of the JV marks further cooperation between the two parties in airport management, which will be conducive to strengthening the economic and trade development between Hong Kong and Shanghai.

Shanghai is the first Mainland city to have two international airports. Pudong Airport, an international hub airport with an extensive global flight network, is supplemented by Hongqiao Airport, a domestic hub airport serving point-to-point coverage. Together, the two airports form the Shanghai aviation hub, handling the world’s 11th-largest passenger volume, 3rd-highest airfreight tonnage and 16th-busiest flight movements in 2008. Upon the completion of Hongqiao Airport’s expansion in March 2010, the two airports in Shanghai will have a total of four terminals and five runways for a combined annual capacity of 90 million passenger trips and 5.2 million tonnes of cargo. This scale places Shanghai as one of the world’s largest aviation hubs, with hardware of top-tier international standard.

Having gone through intensified reforms in recent years, the Shanghai airports assume a leading role in airport management on the Mainland. To support the national strategy of building a strong civil aviation industry, they have also begun benchmarking against international hub airports with a view to improving service quality and management.

SAA Chairman and President Wu Nianzu said, “Forming the JV will enable us to leverage Hong Kong International Airport (HKIA)’s wealth of management experience and skills in operating a renowned hub airport, thereby further improving our operating efficiency and management to equip ourselves for the upcoming World Expo. The JV will also contribute to establishing Shanghai’s “four centres”, especially that of an international logistics centre as part of the national strategy. It will also boost the Shanghai airports’ international competitiveness so that we will better serve the Yangtze River Delta region and the entire nation.”

AAHK Chairman Dr Marvin Cheung remarked that the agreement is founded on years of partnership. He added, “Both Shanghai and Hong Kong are China’s major cities in terms of economy and trade. They also serve as major aviation hubs for China. The development and management experiences of the two airports are invaluable to each other. Hongqiao Airport is nearing completion on a series of expansion works in preparation for next year’s Shanghai World Expo. We are honoured to participate in this meaningful project at such critical time.” Dr Cheung also thanked the CPC Shanghai Municipal Committee, Shanghai Municipal Government and HKSAR Government for their support, which he said made possible the establishment of the JV.

AAHK Chief Executive Officer Stanley Hui Hon-chung said Shanghai is an important hub for the Yangtze River Delta. He added that the JV will help AAHK better understand the operations of Mainland airports and gain experience in managing and operating a national hub facility. He believes it will help Hong Kong further integrate with the Mainland.

“While Hongqiao Airport is one of the five busiest airports in the Chinese mainland, HKIA is a global and regional aviation hub serving passengers from all over the world. The JV will combine and leverage the respective strengths of the two airports. It will also help Mainland airports enhance their operating efficiency and management and become a role model for modern airport management in China.”

The joint-venture company will manage Hongqiao Airport’s east and west terminals, the east traffic control centre of Hongqiao’s integrated transport centre and other business areas relating to passenger flow. The JV will also manage the retail business of the two terminals and will ensure the airport will provide high-quality airport service for visitors and delegates of World Expo 2010 Shanghai.

Built in 1921, the 88-year-old Hongqiao Airport handled 22.88 million passengers and 415,700 tonnes of cargo in 2008, making it the mainland’s 4th largest passenger and 5th largest cargo airport. Hongqiao is building an integrated transport centre, providing comprehensive transport means including air, high-speed railway, highway and subway. While the mega Hongqiao project will be completed in phases before or after the World Expo, the expansion of Hongqiao Airport, as part of the mega project, will be completed soon. The expansion works include a new 364,000-square-metre west terminal and a 3,300m-long, 60m-wide parallel runway. When the new facilities start operating in March 2010, the airport will have two terminals and two runways that can serve 30 million passengers and handle one million tonnes of cargo annually.   -- Ends --