AIR TRAFFIC DEMAND FORECAST - Air Traffic Movement Forecast +-Adjustment Factors GDP Based Preliminary Forecast Adjustments and Finalised ... air traffic deMand forecast 20

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  • AIRTRAFFICDEMANDFORECAST

    GDP Forecast for Hong Kong and World Markets

    Preliminary Passenger Traffic Forecast Based on

    GDP

    Preliminary Cargo Traffic Forecast Based on GDP

    Reality Check with Industries

    Revised Passenger Traffic Forecast

    Revised Cargo Traffic Forecast

    Sensitivity Analysis

    Air Traffic Movement Forecast

    +-

    Adjustment Factors

    GDP Based Preliminary Forecast Adjustments and Finalised Forecast

    Movement Forecast

    Sensitivity Analysis

    A Structured Air Traffic Demand Forecast ProcessFigure

    3.1

    Thefirststepofthemasterplanningprocessistodeterminethelong-termairtrafficdemandforecastupto2030.InternationalAirTransportAssociation(IATA)Consultinghasbeencommissionedtoundertakethistask,whichisaverystructuredprocessinvolving

    (a)Evaluatingthebestmodeltoapplyfortheforecast;

    (b)Compilinggrossdomesticproduct(GDP)forecast;

    (c)ProducingpreliminarytrafficforecastsbasedonGDP;

    (d)Adjustingtrafficforecastsbaseduponthelatestmarketchanges;

    (e)Carryingoutrealitycheckswithaviation-relatedindustries;

    (f)Determiningasetofprimaryprojectionsforpassengerandcargotrafficandairtrafficmovements(ATMs,alsoknownasflightmovements);and

    (g)Conductingsensitivityanalysistoproducearangeofestimatesforhigh,lowandbasecases.

    GDPFORECASTCompilingaGDPforecastisaveryimportantstepasitprovidestheessentialbuildingblockfortheentiretrafficdemandforecast.IATAConsultingsresearchclearly

    demonstratedthatairtrafficgrowthbearsastrongcorrelationwiththeglobalGDPgrowth.Figure3.2showsthetwotrendsinthepastfourdecades.

    AsHongKongisaninternationalcitywithanopenmarketandexternally-orientedeconomy,thecorrelationbetweenairtrafficgrowthandGDPgrowthinHongKongisevenmorepronounced,ascanbeseenfromtheclosecorrelationbetweenhistoricaltrafficderivedfromtheregressionformulaeusedbyIATAConsultingandtheactualtraffic(seeFigures3.3and3.4).Forpassengerdemandforecast,IATAConsultingadoptedsimplelinearregressionbasedonHongKong

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  • Global Air Traffic versus Economic GrowthFigure

    3.2

    Source:TrafficdatafromInternationalCivilAviationOrganization(ICAO)andInternationalAirTransportAssociation(IATA),GDPdatafromInternationalMonetaryFund(IMF)andEconomistIntelligenceUnit(EIU)

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    Source:AAHKtrafficdata,IATAConsultingestimates

    Comparison between Actual and Derived HKIA Cargo Traffic Based on Hong Kong GDP and Global GDP

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    Comparison between Actual and Derived HKIA Passenger Traffic Based on Hong Kong GDP

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    3.3

    Source:AirportAuthorityHongKong(AAHK)trafficdata,IATAConsultingestimates

    GDP.Forcargodemandforecast,IATAConsultingadoptedmultiplelinearregressionbasedonHongKongandglobalGDP.

    DespitetheglobaleconomicslowdownandSevereAcuteRespiratorySyndrome(SARS)epidemicin2001-2003,HongKongsGDPexperiencedanincreasebyalmost4%perannumbetween2004and2009.Followingtherecoveryfromtheglobalfinancialcrisisandeconomicdownturnin2008-2009,theGovernmentestimated6.5%GDPgrowthfor20102.OnthebasisofinputfromEconomistIntelligenceUnit(EIU)3ofJuly2009andGlobalInsight4(July2009),IATAConsultingcompiledthefollowingGDPforecastbetween2008and2030

    (a)HongKongsGDPwillgrowataCompoundAnnualGrowthRate(CAGR)of3.2%;

    (b)MainlandsGDPwillgrowataCAGRof7%;and

    (c)TheglobaleconomywillgrowataCAGRof4%.

    2 HKSARGovernment,November2010.3 TheEconomistIntelligenceUnit(EIU)

    istheworldsleadingresourceforeconomicandbusinessresearch,forecastingandanalysis.Foundedin1946asanin-houseresearchunitforTheEconomist,itnowdeliverstrustedbusinessintelligenceandadvicetoover1.5milliondecision-makersfromtheworldsleadingcompanies,financialinstitutions,governmentsanduniversities.

    4 GlobalInsightwasfoundedin2001throughthemergerofWhartonEconometricForecastingAssociatesandDataResources,Inc.InOctober2008,GlobalInsightbecamepartoftheInformationHandlingServices(IHS)family.BasedintheNewEnglandRegionintheUS,IHSGlobalInsightprovidescomprehensiveeconomic,financial,andpoliticalcountryandindustryintelligenceproductstosupportplanninganddecisionmaking.

    1HKIAMASTERPLAN2030

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  • Five Major GPRD AirportsFigure

    3.

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    Hong Kong

    Macao

    Zhuhai

    Landsat-7SatelliteImageprovidedbyGeocarto

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    millions of passenger trips millions of tonnes

    203020252020201520082004

    Actual Forecast

    CargoPassenger

    CAGR 2008-2030Passenger/Cargo = 5.9%

    Note:GPRDairportsincludeHongKong,Guangzhou,Shenzhen,MacaoandZhuhaiairports

    Source:CivilAviationAdministrationofChina(CAAC),AAHKforactualfigures,IATAConsultingforecast

    GPRD Airports Passenger and Cargo Traffic ForecastFigure

    3.

    5 WorldBank,IATAConsultingestimatesbasedonGlobalInsight.6 ThePRDcomprisesDongguan,Foshan,Guangzhou,Huizhou,Jiangmen,Shenzhen,

    Zhaoqing,ZhongshanandZhuhai.

    AVIATIONMARKETOuTLOOK:THEMAINLANDANDGPRDIATAConsultingforecaststhatairtraffictoandfromtheMainlandwillreachnearly2.1billiontripsby2030,whilecargotrafficwillreach44milliontonnes.Thisprojectionissupportedbyanumberofobservations.Onthepassengerside,theWorldTourismOrganisationforecaststhattheMainlandwillbecometheworldsfourth-largesttouristsourcemarketandthelargestdomestictouristmarketby2015.TheMainlandsGDPpercapitawillreachapproximatelyUS$14,000in20305,andastheeconomygrows,thedesireandabilityofthepeopleontheMainlandtotravelbothdomesticallyandinternationallywillgrowrapidly.

    TheMainlandisalsothemanufacturingcapitaloftheworld,anditscargomustbedeliveredtotheiroverseasdestinationsaroundtheworld.Risingforeigndirectinvestment,improvinglivingstandards,moreliberaltradepoliciesandagrowingexpresscargoandlogisticssectorsupportarobustcargogrowthprojection.Also,cargotrafficofMainlandairportshasincreasedbyaCAGRofover10%eachyearinthepastdecade,reaching9.5milliontonnesin2009.TheMainlandssubstantialtradevolumeandgrowingeconomywillbekeyfactorsinitscargogrowth.

    ThePearlRiverDelta(PRD)6HKIAscatchmentareaisoneoftheMainlandsmostdiverseandfastestgrowingregions.ItisoneoftheMainlandscentresofmanufacturingandmostaffluentareas.Withthe

    air traffic deMand forecast

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  • Annual Passenger Demand by 2020 233 Million

    Annual Passenger Demand by 2030 387 Million

    Anticipated AnnualHandling Capacity of GPRDAirports 200 Million*

    Unfulfilled Demand 33 Million

    (in passenger trips) Unfulfilled Demand 147 Million

    Anticipated AnnualHandling Capacity of GPRDAirports 240 Million*

    *ForHKIA,thecapacityassumedis60millionbasedoncompletionofthecommittedMidfieldPhase1Development

    Source:CAAC,IATAConsultinganalysisandestimates

    GPRD Airports Capacity and Forecast Passenger Demand (2020 and 2030)

    Figure

    3.7

    7 TheGreaterPRDcomprisesPRDplusHongKongandMacao.

    continuousgrowthintradeandintheoveralleconomy,IATAConsultingestimatesthattheaviationmarketintheGreaterPRD(GPRD)7willgrowto387millionpassengertripsand18milliontonnesofcargoby2030(seeFigure3.5).

    WithintheGPRD,therearefivemajorairports,namely,HKIA,GuangzhouBaiyunInternationalAirport,ShenzhenBaoanInternationalAirport,MacaoInternationalAirportandZhuhaiAirport(seeFigure3.6).Havingtakenintoaccounttheanticipatedincreaseinthehandlingcapacityofthefiveairportsinthenext20years,IATAConsultingforecaststhattherewouldstillbeasignificantunfulfilleddemandforairservicesbothinthemediumtermupto2020andinthelongtermupto2030(seeFigure3.7).

    17HKIAMASTERPLAN2030

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  • In2008,wehandledabout80%ofGPRDairportsinternationalpassengers(excludingHongKongMainlandtraffic)andabout90%ofitsinternationalcargothroughput.Aslongasourhandlingcapacityisnotconstrained,wearewellpositionedtocontinuetocaptureahandsomeportionofthisgrowingmarketbyleveragingourextensiveinternationalairnetwork.

    ADjuSTMENTFACTORSRELEVANTTOHKIAIATAConsultinghasspecificallylookedintoarangeofspecialfactors(namely,airservicesagreements,cross-straitdirectflights,tradeagreements,travelpolicy,tourismdevelopment,cross-boundaryinfrastructuredevelopment,passengerstravellingpreferences,modalcompetitionfromcontainerisedshipping,developmentsof

    surroundingairportsandairlinesstrategies)thatmightaffectitsairtrafficdemandforecast.Most,ifnotall,ofthemhavebeenfoundtobeeitherhavingnegligibleimpactorhavealreadybeenfactoredintoIATAConsultingseconomicmodels.Theassessmentsonthetwomostfrequentlycitedfactorsaresetoutbelow.

    Cross-StraitDirectFlightsHongKong/TaiwanhasformanyyearsbeenthebusiestairrouteoutofHKIAwithcurrentlyabout50flightsperday.Beforecross-straitdirectflightsfirstcommencedinJuly2008,passengertrafficsegmentspotentiallyimpactedbydirectflightsconstitutedabout16%(i.e.7.7million)ofourtotalthroughputin2007,whichhasbeendecreasedto10%(i.e.4