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s p e c i a l r e p o r tChina’s Shenzhen Airport: one of the five airport members of the Pearl River Delta ForumPower to the DeltaRepresentatives of the five airports of Greater China’s PearlRiver Delta (PRD) pledged to work more closely togetherat the inaugural meeting of the PRD A5 Forum in HongKong recently, said a press statement released by the group afterthe first gathering.Forum delegates were senior vice-general manager ofGuangzhou Baiyun International Airport (Group) Corp., JiaoXinping, Macau Airport chairman, Joao Manuel de Sousa Moreira,chief executive officer of theAirport Authority of Hong Kong,Dr. David Pang, vice-president of the Shenzhen Airport GroupCompany, Tang Shenhua, and chairman of the board of ZhuhaiAirport Group Corp., Feng Zhaoming.The airport bosses said they discussed the roles of each of theairports in the region’s economic development. They also agreedto work on common interests such as cross border and boundarytraffic management issues, tourism, intermodal transport links,developments in China’s aviation industry and the impact ofChina’s entry to the World Trade Organisation on PRD airports.The next PRD A5 Forum will in Shenzhen in March, 2002.Incheon defies the doubtersOn July 1, South Korea’s showpiece airport,50 kilometres from downtownSeoul, was 100 days old. To mark theoccasion, the chairman and chief executiveof the US$5.5 billion Incheon InternationalAirport (IIA), Kang Dong-suk, declared, withobvious relief, that daily income at the newfacility was 70% higher than at the South Koreancapital’s former global gateway, crampedand shabby Kimpo.He added: “The airport has exceeded allexpectations and we are now planning for thesecond phase of construction at IIA,” alreadya 24-hour facility.Like Hong Kong International Airport,IIA experienced problems with its baggagehandling system when it opened on March 29this year. Said Kang: “The baggage handlingsystem has been fully automated since Mayand is now operating smoothly – at this stageit is working at 37.6% of its capacity.”At press time, 43 airlines were using IIAto service routes to 103 cities worldwide. InIncheon International Airport chiefexecutive Kang Dong-suk: “In the 20thcentury Singapore and Schiphol Airportsprovided the best service to passengers.In the 21st century it will be Incheon.”July, the latest figures available, an averageof 302 flights a day used IIA, carrying 53,000passengers and 4,726 tons of cargo.On August 14, after an 18-month implementationprogramme, IIA’s new air trafficmanagement system, designed and built byThales ATM and South Korea’s Hanjin InformationSystems and Telecommunications,became operational. The system, which alsoprovides air traffic management for KimpoAirport, includes a Eurocat 2000 Air TrafficControl System, airport surface detectionequipment produced by South Korea’s ParkAir Systems and two sets of solid state approachradars and monopulse secondarysurveillance radars.At IIA’s opening Kang said his goals werefor IIA to become one of the top three cargoairports in the world by 2004 and for transferpassengers to make up at least 30% of travellerspassing through the airport within thesame three year time-frame.“In the 21st century Incheon will providethe best service in the world for travellers,” hedeclared, as IIA marched forward from its first100 days of operations.44 | Orient Aviation | September 2001
By Tom BallantyneThe new owner of Australia’s primarydomestic and international hub,Sydney’s Kingsford Smith Airport, couldbe decided by the end of October. The victor,likely to be buying into a rich source of revenueas well as a few ongoing problems, may haveto pay up to US$2 billion for the prize.There has been little open lobbying by theprospective candidates following a warningfrom the government’s Office of Asset Salesand IT Outsourcing (OASITO), which is organisingthe sell-off, that they should not play theirbids out in public.While an official list of bidders was notreleased following the mid-July deadline forprospective buyers to submit non-indicativebids, the main players are all consortiums:• Southern Cross: Macquarie Bank, CommonwealthBank of Australia (CBA) andGerman airport operator Hochtief.• Sydney Gateway: Hastings Funds Management,insurance group AMP, DeutscheBank, Hong Kong’s Cheung Kong Infrastructureand Canada’s CDP Capital. Britishairport operator, BAA, has a non-exclusiveconsulting role.• Connect: ABN-Ambro, Egis of France andSchiphol/FAG of the Netherlands.Under the terms of the offer Australianinvestors must own a minimum 51% of theairport. Since July, the preferred bidders havehad access to special data rooms to studythe airports highly confidential operationaldata, the information they will use to decideprecisely what to offer for the facility.Investors are keen to win a stake inSydney Airport because, like all airports, it isa virtual monopoly business. The hub handlesabout 40% of all international passengertraffic moving through Australia as well ashalf the country’s air cargo.Insiders suggest the airport will post solid10% underlying earnings growth annually.“Our estimate is ROA (Return On Assets) nextyear of 6.9%, rising to 9% by 2005,” said theairport’s chief executive, Tony Stuart.The sale price for Sydney has beenboosted by an estimated US$600,000, followinggovernment approval earlier this year of anear doubling of airport charges. That movecaused anger among airlines, but in one fellswoop lifted the airport’s annual revenue byaround US$45 million.Another potential concern, the possibilitya second Sydney airport might be built atsome stage in the future, providing seriouscompetition for Kingsford Smith, has beenneatly sidestepped.New Sydney airportowner will facetesting issuesSydney Airport: strong assetWhile the proposed Badgery’s Creekairport, in Sydney’s western suburbs, hasofficially been put on the shelf for the timebeing, government has eased concerns forbidders by saying the winning contender willhave first right of purchase on any secondfacility that is built.The winner also will receive an extremelyefficient and modern facility, thanks to ahuge spending splurge over the past fewyears to ready it for the 2000 Sydney OlympicGames. Indeed, the International Air TransportAssociation (IATA) Global Airport Monitorranked Sydney Airport as the world’s “bestin class” for international airports for the year2000, up from tenth place the year before.The airport has been praised by internationalcredit rating agency Standard & Poor’s,with its associate director of corporate andinfrastructure ratings, Parvathy Iyer, describingit as a “very strong asset” with strong growthprospects. “We view the current managementas quite positive. It’s a very well run airport,”she said.However, she did sound a warningthat the airport could receive a credit ratingdowngrade after privatisation, regardless ofthe buyer. Iyer said she would not be surprisedif the ratio of debt to equity, or gearing, roseto 75% from 40% after the sale, based onother similar airport sell-offs. S & P currentlyrates Sydney Airport with a long-term creditrating of A-plus, with negative outlook and ashort-term rating of A1.Iyer believed the rating could easily fall toBBB if the gearing rose to 75%, as was oftenthe case in an airport sell-off. “If the gearing’sgoing to go up to 75%, that is definitely goingto be a trigger for a downgrade,” she said.The new airport owners will have other issuesto confront, apart from airline complaintsabout levels of charges. Already touching thelimit of its capacity during morning and lateafternoon peak periods, there are seriousconstraints on expansion. The airport operatesunder a strict government-imposed capof 80 aircraft movements an hour as well asan 11pm to 6am curfew.Because the airport is close to the citycentre and heavily populated areas there arerestrictions on flight paths for environmentalreasons.And, like many big airports, it facesconstant attention from local protest andgreen groups fighting issues such as noisepollution. They are steadfastly opposed to anyhint of expansion or easing of environmentalrules.September 2001 | Orient Aviation | 45
Page 1 and 2: VOL. 8 NO. 10 SEPTEMBER 2001MAGAZIN
Page 3 and 4: P U B L I S H E R ’ S L E T T E R
Page 5 and 6: N E W SRegional round-upSafety rati
Page 7 and 8: N E W SBUSINESS round-upQantas resu
Page 9 and 10: m a i n s t o r yPEOPLE TRAFFICKERS
Page 11 and 12: m a i n s t o r ytors, has been awa
Page 13 and 14: n e w sBy Tom BallantyneThe convolu
Page 15 and 16: ing partner Emirates to pick-up Sri
Page 17 and 18: carrier’s inflight training centr
Page 19 and 20: i n f l i g h tBy Jonathan SharpGra
Page 21 and 22: S p e c i a l R e p o r tAIRPORTSTh
Page 23 and 24: s p e c i a l r e p o r tTIME FOR A
Page 25: New Zealand’s biggest airport,Auc
Page 29 and 30: Schiphol boost for KLIA?By Tom Ball
Page 31 and 32: a deterioration in FLF as the decli
Page 33 and 34: Monthly international PAX statistic
Page 35 and 36: AAPA monthly international statisti

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