Q&A: Hong Kong International Airport CEO Fred Lam

posted on 12th July 2018 by Justin Burns
Q&A: Hong Kong International Airport CEO Fred Lam

Hong Kong International Airport (HKIA) is expanding with work started on a much-needed third runway while construction of other infrastructure continues at pace.

Last year, just shy of 73 million passengers were welcomed through HKIA, and the airport’s network spans 220 destinations and is served by more than 100 airlines.

The adding of a new landing strip is set to drive traffic even further as the thirst for travel by the Asian population has only just started along with the economic growth in the region.

Airport Authority Hong Kong chief executive officer, Fred Lam spoke to ARGS at last month’s Airports Council International (ACI) World Annual General Assembly in Brussels about the airport’s expansion and any future trends.

How is construction of the third runway going?

We are expanding our airport with the new runway and also the other associated facilities and so far the construction work is going very smoothly and we have started full construction (in August 2016). We still aim to commission the runway by 2022 and then the rest of the programme by 2024.

How is HKIA dealing with the capacity-crunch operating with only two runways?

The ultimate solution is the third runway so we are pushing very hard to complete that on time by 2022 and 2024, but for the time being we are also deploying some measures to further squeeze as much as we can out of the two runways.

For example we are now deploying more main time resources to cut down on the night-time maintenance (started two years ago) which helps. We open it earlier by 15 minutes so every day we can now we can increase movements by 16 aircraft which times by 365 days that is quite a good number (of additional flights).

We also in terms of the runway last year we started to implement this new scheme to manage the noise issue, in the past during the night there was a restriction on the number of aircraft movements we could have.

We now have changed it so it not based on the number of movements but on the total noise level that the aircraft would generate during the night and the way to do that, once we the set the maximum, we then encourage the airlines to change their aircraft into quieter aircraft which they are keen to do anyway. This enabled us to also increase the number of night movements.

Is HKIA making any upgrades to terminal infrastructure?

In terms of the terminal, we also want to make sure that the service level will not be worse because of more people. Physically we are expanding T1 and are adding an annex building and this should be done by Q3 next year.

This will give us more check-in counters, and on arrival more baggage carousels and we are also adding more space airside and are putting in a new children’s playground along with an open air garden which will hopefully help to enhance the passenger experience.

How many passengers did HKIA handle in 2017 and what is your forecast for the future?

In 2017 we handled 72.9 million. This surpassed our capacity of Terminal 1 which is for 45 million passenger per annum (mppa), but we have added more infrastructure to it so have more than that.

We believe then in the next 10 years we would have to build enough capacity to handle a passenger throughput of more than 100 million passengers.

That is not so surprising as we are about 73mppa we are growing at three to four per cent a year and if you compound that for 10 years then that is above 100 million. Demand is not an issue as in terms of HK and the area as the people are only just starting to enjoy travelling overseas and this is just the start. The question and challenge is of how we can best cope with this demand and not compromise our service quality.

Where is increasing demand coming from?

We see very good growth in passenger numbers from SE Asia and certainly from Mainland China but also at the same time also from other regions coming into Hong Kong because there is a lot of economic activity happening in Asia from the USA and Europe, which drives the business travelling and also tourism.

The 3rd runway is vital to the airport’s growth and future. We see ourselves as a key driver of the HK economy and it is not just about meeting demand that is important but we also want to ensure the new runway and facilities will help to continue to propel Hong Kong’s economy forward and is why this cargo facility is also so important.

What are biggest challenges at HKIA?

Capacity is the biggest issue for us at the moment so we need to try to build this capacity as fast as we possibly can in order to capture the business opportunities.

The second biggest challenge we are now facing is the shortage of manpower as Hong Kong’s employment rate is very low and below three per cent and it is basically full employment and because our unions are very strong so it is very hard for us to import labour from outside of Hong Kong, so we do face an issue in getting enough people to work at the airport.

At the moment for the whole airport there are about 73,000 workers but we believe this number will go up to about 123,000 by the time we have finished building the 3rd runway.

Where are we going to find people? It is a headache so that is why we have established an academy last year as we want to train more high school leavers who cannot get into college to also see the airport as providing a career for them.

We have a problem with employing labourers but Hong Kong has no problem importing managers from around the around the world, so maybe we need to start doing that (for labourers).

How excited are you to host the next ACI Asia-Pacific/ World Annual General Assembly, Conference & Exhibition (WAGA) from 2-4 April 2019?

The timing is perfect for us as we have lots of projects going on and next year we hope we have the opportunity to share it with partners next year and to show off Hong Kong to a global audience.