Hong Kong’s Aviation Policy
A Green Paper
Introduction
Hong Kong is facing different challenges and changes in terms of its economy. The country is facing great changes in the tourism industry such as the country’s close relationship with the mainland Chinese government. The said relationship had helped to enhance the position of the country in both a destination in its own right as well as a gateway for the travelers that are entering as well as leaving the People’s Republic (1997).
On the other hand the emergence of the air transport had greatly smoothed the progress of long distance travel as well as the exchange of goods. The aviation industry of Hong Kong helps the development of the economy of the country. According to the study of (2006), in 2003, the aviation industry had contributed to 2.54% of the total gross domestic product (GDP) at factor costs, while contributed to 4.48% of the trade services and tourism industry. The total benefits and influence of the aviation industry was about 7.02% of GDP. It shows that the industry is considered as a major component of the Hong Kong economy. That is the reason why, the current and changes in the aviation policies can alter the overall business environment of the entire aviation market
Furthermore, it is also important to consider the potential advantage of the Travel & Tourism to the economy of the country that will help to exploit its position as the gateway to China. That is the reason why there is a great need for different improvement and development in the aviation policy of the country.
The Green Paper sets out the vision of the country for the future of policing that will include different plans in order to improve the aviation industry of the country in order to manage and regulate the aviation freedom in Hong Kong.
Importance of Air Travel in Hong Kong
Hong Kong has many visitors and its residents travel a lot. During 1980’s, there were over 11 million travelers who passed through the Kai Tak Airport early, and the said number is increasing. The said travel offer an important benefits to the economy of the country, whether they be locals who uses the Hong Kong-based airlines in order to travel overseas, or foreign business people and tourists who visits and patronize the country’s transport, accommodation and other industries (1990).
Background of Civil Aviation in Hong Kong
There are about 85 international airlines that operate about 5700 scheduled passenger and all-cargo flights each week between Hong Kong, and some 155 destinations worldwide. 70% of the said flights are being operated with the wide-bodied jets. There are also an average of around 84 non-schedules passenger and cargo flights each week ( 2008).
Furthermore, the Civil Aviation Department of CAD is the one that is responsible for the provision of the air traffic control services; certification of the Hong Kong registered bilateral Air Services Agreements, as well as the regulation of the general civil aviation activities. The Airport Authority Hong Kong or AAHK is the one that manages and operates the HKIA under an Aerodrome licensed that was issued by CAD
Restriction for Foreign Capital and Control
The airline industry is considered as a cyclical that its success directly depends on the good economic times. But the combination of the Gulf war and the recession propelled the airlines into one of their most severe downward economic cycles. From 1990 to 1992, US carriers collectively lost more than they earned during the entire history, while in Europe, during the same time, the EU airlines lost more than .5 billion.
Despite the different latest improvements in terms of load factors, most of the airlines in the world is suffering from overcapacity as well as increased competition, while other still have sever economic problems. The said difficulties have been connected with the major needs of the airlines for the replacement of fleet. According to the study of ICAO in 1992, from 1991, to 2010, the airline industry of the world will have to spend more than 0 billion in their new aircrafts and the number will double after 20 years.
Hong Kong is considered as one of the most restrictive government in terms of the law regarding the foreign investments towards aviation industry. The foreign stake is limited to 25%. Furthermore, the scope of the investment in the Civil Aviation by the Foreign Investors shall only include and limited in the civilian airport, public air transport enterprises, general aviation enterprises as well as other air transport that are related to the project. Thus the foreign investors are not allowed in investing in as well as managing the air traffic control system ( 2002).
The Chicago Convention
The Chicago Convention is a multilateral treaty in terms of which the member states have agreed on certain principles and arrangements in order to allow the international civil aviation to be developed in a safe and orderly manner as well as to enable the international air transport service to be established on the basis of equality of opportunity and operated soundly and economically (2008).
The 1944 Chicago Convention organized the air transport. The bilateral agreements that grew out of the principle regarding the national sovereignty over the airspace that forms the references of the Chicago had two consequences: one was that airlines had nationalities and that the governments were given a central role in the process of negotiating the route rights; while the other was a series of national laws that limits the foreign ownership or control of the carriers.
But it is important to consider that the Chicago Convention is neutral on the subject of the foreign ownership. As a matter of fact, the Article 77 of the Convention explains that it permits operations that involve the joint or coordinated efforts among the different airlines in order to provide international service. However, there is a wording the model forms, that shows in the Article 6 that focuses on the bilateral form that permitted either of the party to withhold or even revoke a certificate or permit to an airline where it is not satisfied that the substantial ownership as well as effective control are vested in the nationals of either party ( 1994).
Open Skies of Hong Kong
According to the World Travel and Tourism Council, aviation is considered as one of the most important driver of the Travel & Tourism development, thus improve job creation. That is why it is important to make even a greater effort to open the air transport markets that will help to attract more air transport services as well as improve the regional networks. Thus the government must continue to pursue the managed liberalization as well as relaxation of different aviation regulations (2003).
The Chicago Convention
-Nationality rule
-Freedom of the Air
concept – Hubbing
concept – Cabotage
concept -Air Services Agreement
-Air transport organization, structure, regulations, and initiatives in Hong Kong
-The ‘Open skies’ concept and its implications
-Deregulation and liberalization in aviation
-The future of air transport in U.K
-Towards a National Aviation Policy Statement (Australia)
-Mainland China’s aviation policy
-Elements of Air Transport Policy
-From open skies to plurilateral airspace
-Guiding principles for aviation development -Hong Kong International Airport’s third runway
-Privatization of airport
-Security in airport and airlines
-EU-US air transport agreements
World Travel & Tourism Councils Policy Recommendation for Hong Kong to Exploit China’s Travel & Tourism Explosion (, 2003):
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