Cathay anticipates huge take off in 1998

HONG KONG (JP): If the transfer of Hong Kong's sovereignty has any effect on Cathay Pacific as a business, it will be to expand opportunities, Tanya Reed, Cathay Pacific's corporate communication manager for Asia, said.

Downplaying worries over the possibility of an "unfavorable effect" from the transfer, she said that "Business as usual after the handover is what Cathay Pacific is anticipating."

The airline industry is given specific attention in Article 135 of the Basic Law, which states that airlines having their principal place of business in Hong Kong before July 1, 1997 may continue operations.

"This is a guarantee that Cathay Pacific can carry on as before," Reed told The Jakarta Post.

Reed expressed confidence that 1997 will be just another year for the company, whose big year will be 1998, with the opening of Hong Kong's new US$8 billion airport facility currently under construction on Chek Lap Kok Island.

The decision to replace the single runway airport at Kai Tak, which juts into the harbor, is aimed at ensuring Hong Kong's position as an international business center and securing a sound economic future.

Jemma Moore, the airline's communication manager on Chek Lap Kok, explained that the replacement is badly needed because the current airport, which ranks as one of the world's busiest for international passengers, is reaching its limit.

The airport, which handles over 28 million passengers annually, could no longer accommodate 15,000 flights in 1995, thereby costing Hong Kong 2.5 million passengers and millions of dollars in tourism receipts.

"It is no exaggeration, therefore, to say that Hong Kong's new airport on Chek Lap Kok is crucial to the territory's future economic success," Moore said.

Air travel in the Asia-Pacific region has been growing rapidly over the past few years and is set to continue expanding faster than the industry worldwide well into the next century. By the year 2000, the Asia-Pacific region is forecast to account for about 40 percent of international passengers, with Hong Kong -- with half the world's population within five hours flying time -- as its premier hub.

Moore said after the biggest feasibility study ever conducted by the Hong Kong government, work started on Check Lap Kok in December 1992, 25 kilometers to the west of Hong Kong Island on the west coast of Lantau Island.

Known collectively as the Airport Core Program, the project includes 34 kilometers of new expressways, an express rail link connecting the airport with Hong Kong's major population centers and one of the world's largest suspension bridges. The facility will also be equipped with a third cross-harbor tunnel linking Hong Kong island and Kowloon and a new town called Tung Chung on Lantau, just opposite the airport.

She said on the opening day -- planned for April next year -- the first runway will have a handling capacity of nearly 40 aircraft per hour and will be capable of handling 35 million passengers a year. The airport will ultimately be capable of handling 87 million passengers annually.

In a bid to capitalize on the momentum, Cathay Pacific is currently investing in operational and support facilities at Chek Lap Kok, including the airline's headquarters, complete with a staff hotel with combined commitments of about $1 billion.

"For the first time, the airline's staff in Hong Kong will be in one place and not scattered around various sites as they are today," Moore said.

The 10-story headquarters and the 500-room staff hotel will be self-contained with retail outlets, banking facilities, staff travel services, sports and leisure facilities, accommodation for crews and food outlets.

The airline aims to strengthen its passenger services by taking advantage of Chek Lap Kok's additional capacity, making schedules and connections as convenient as possible and providing attractive lounge and airport amenities for passengers in all classes, she said.

Either independently or as part of a consortium, Cathay Pacific is also bidding for a number of franchises to provide a wide range of auxiliary aviation services, including a flight kitchen, an aircraft maintenance facility, a ramp handling operation, an air cargo terminal and a refueling concern.

Hong Kong Air Cargo Terminal Ltd., of which the airline is a 10 percent shareholder, for example, has been awarded one of two franchises to operate an air cargo terminal. The $1 billion air cargo terminal project is designed to have a capacity of handling up to 2.6 million tons of cargo annually.

Moore said the move is part of the airline's wide range of investments in the future, which also include the introduction of a new corporate identity in 1994 and a fleet replacement program involving firm orders and options valued at $9 billion.

Cathay Pacific has apparently put its planning on track to anticipate the substantially increasing number of middle class travelers with disposable incomes in a number of economically emerging Asian countries.

People from this new class from countries with big populations -- including Indonesia, China and Thailand -- are projected to need to travel.

"The airline's major investments at Chek Lap Kok airport and in upgrades to customer facilities will not begin paying back until after 1997, but they are expected to pay back handsomely," Moore said. (hhr)