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Shanghai Airport Authority and AA Hong Kong strike joint venture

2009. 12 October

by Dermot Davitt
( CHINA. Shanghai Airport Authority (SAA) and Airport Authority Hong Kong (AAHK) today signed a joint-venture agreement to develop closer ties, one that includes the management of Shanghai Hongqiao Airport’s two terminals, and the management of retail at the airport. There are two airports in Shanghai: Hongqiao, which handles mainly domestic traffic, and Shanghai Pudong, the city’s international airport.

The new company, Shanghai Hong Kong Airport Management Co. Ltd, will operate 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 joint venture will also manage the retail business of the two terminals and aims to raise the quality of airport service for visitors and delegates to World Expo 2010 in Shanghai.

The move deepens the cooperation between the two companies. In October 2003, SAA and AAHK signed a letter of intent to develop closer cooperation under the Shanghai Municipal People’s Government’s call to improve Shanghai-Hong Kong collaboration in eight areas, including airports, marine logistics and the World Expo. Since then, a series of cooperation initiatives, from training and development to business consultation, has been launched in recent years.

Together, the two Shanghai airports form the Shanghai aviation hub, handling the world’s 11th-largest passenger volume, third-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.

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 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.”

AAHK Chief Executive Officer Stanley Hui Hon-chung noted: “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.”

A major Hongqiao development project will be completed in phases before and after the World Expo. The expansion of Hongqiao Airport, as part of that project, will be completed by next year. The expansion works include a new 364,000-sq m 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.