According to Dr Brian Campbell (left), president, Campbell-Hill Aviation Group, Hong Kong's air cargo industry will grow significantly if it adopts an open-skies policy.

Mr Campbell said that with up to 50 per cent of all international trade values moving by air, liberalisation of aviation policies were key for aviation hubs to maintain their competitiveness.

Boeing forecasts a 6.4 per cent annual growth rate for air cargo worldwide through to 2017, while the expected growth rate for the Asia-Pacific region is 7.6 per cent. "This means that air cargo will triple in the major world markets over the next 15 years," he said.

He said that regardless of whether China continues to liberalise its cargo markets, Hong Kong has more to gain by liberalising its markets than if it does not. But he warned of "serious negative consequences for Chek Lap Kok" (CLK) if it does not.

"Historically, Hong Kong airport has attracted a large share of the vast China market," Mr Campbell said. "But change is well underway."

The future performance of CLK in the China/Hong Kong air cargo market will be determined by the interplay of market demand, air service development, and the emergence of new Chinese international gateways like Shenzhen, he said.

"Consequently, a considerable amount of China's traffic which currently moves through Hong Kong will flow through China's airports," he said.

CLK currently offers the best cost and service option for most of China's air cargo shippers and consignees. However, modernisation and liberalisation of China's airports will eat away that advantage and its share of the market, he said.

Dr C.K. Law (left) and Dr Raymond Yeung of the Hong Kong Policy Research Institute Ltd. (HKPRI) also presented at the luncheon their study on the impact of open skies on CLK.

The HKPRI study concludes that an open sky policy would be detrimental to CLK. The advocates simplistically argue that 'open skies' can introduce competition into Hong Kong's air transport industry and this enhance Hong Kong's competitiveness as an air hub, the report said. "Our study has shown that if Hong Kong opens its skies unilaterally without an equitable exchange of economic opportunities, it is very likely that foreign airlines would out-compete Hong Kong's home carriers," Dr Law said.

The study also argues that liberalisation of Hong Kong's skies would not strengthen its role as the gateway to China, which is based on China liberalising its skies.

"China is unlikely to open its skies in the foreseeable future for various reasons and the WTO framework has not fully covered aviation yet," Dr Law said.

Among the recommendations the study makes is that a comprehensive and transparent aviation policy taking domestic and international factors into account should be drafted. It also suggests maintaining a strong home-carrier to enhance the development of Hong Kong as a hub, because weakening the home-carrier would weaken the hub's contributions to Hong Kong.