HK's aviation benefits great from its return to China

John J Slosar, chief executive of the Cathay Pacific Airways Ltd, said during a recent exclusive interview with the Xinhua News Agency, June 1, 2012. [Photo/Xinhua]

HONG KONG - Hong Kong has benefited tremendously from its return to China. Being able to play a role to support the growth and development of the mainland economy, Hong Kong will achieve further prosperity in the future, John J Slosar, chief executive of the Cathay Pacific Airways Ltd, said during a recent exclusive interview with the Xinhua News Agency.

Aviation growth "fantastic"

"The aviation story in the development of Hong Kong in the past 15 years has been a fantastic one. The growth in flights, the growth in destinations, the growth in passenger numbers have all been fantastic." This is Slosar's comment on the overall development of the city's aviation industry.

What's made that development happen? In his eyes Hong Kong returning to China is the most important factor.

Slosar explained that Hong Kong's return to the motherland on July 1, 1997 created huge amount of interest among Chinese passengers to visit "the Orient Pearl" and thus has helped the city to expand its network into the mainland in a big way.

As one of the four pillar industries in Hong Kong, tourism has enjoyed tremendous development in the past decade, which has benefited the aviation industry. Statistics show that last year in every 10 Hong Kong visitors, nearly 7 were from the mainland. With a 65-year history, Cathay Pacific is lucky enough to jump at chances and prosper.

"It's always a good thing to be in a market where it grows. We are fortunate to base here where Hong Kong is very much in the middle of Asia and now a part of China. Half of the world population lives within a 5 hour flight of Hong Kong so there are lots of reasons for people to be coming to and through Hong Kong," Slosar said.

Some 15 years after the reunification, the relationship between Hong Kong and the mainland has become broader and stronger. Benefited from the economic boom of the mainland, Hong Kong has also made unique contributions by participating in the development of the mainland economy.

"As long as the mainland economy continues to be strong, Hong Kong will have a role in helping that to happen and Hong Kong will achieve prosperity by playing that role,"  he said.

Partership with the mainland

Market means profit. With the ties between Hong Kong and the mainland drew closer and closer, how to go deep into the mainland market has become the priority on Cathay Pacific's agenda.

In 2006, Cathay Pacific took over 100 percent share of Dragon Air, a regional airline based in Hong Kong and its primary destinations are in the mainland. Up till now, Dragon Air operates about 400 flights a week to around 20 different destinations in China. Before the integration of Dragon Air into Cathay Pacific, there was about a million transfer passengers between the two airlines. The number has more than tripled in past 6 years working together.

"Dragon Air incorporation with Cathay (Pacific) is really important of us and it really adds value to us and helps us develop a strategy for serving the Chinese markets.. It really helped to increase the passengers traveling between the Chinese mainland and Hong Kong as well as bring passengers to Hong Kong where they can go to other destinations with Cathay (Pacific)," Slosar said proudly.

Besides that, Cathay Pacific also built strategic partnership with Air China, one of the major airlines of China. Cathay Pacific now is a share holder in cargo of Air China, which operates in Beijing and Shanghai.

"Our goal is to make Air China Cargo one of the largest and efficient cargo airlines in the world," Slosar explained the future plan. "Wherever the cargo needs to move, Air China Cargo would like to be there servicing," he added.

On top of cargo, the two airlines also co-share a bunch of different flights. As Slosar put it, "Air China is absolutely our number one strategic partner."

Investment makes growth

In Cathay Pacific's point of view, investment is crucial for the growth of aviation industry. Following that principle, the airline has enlarged its fleet size to 170 airplanes. According to Slosar, Cathay Pacific now has another 90 aircrafts on order for delivery for the next 7 year.

As for the cargo, a new cargo terminal is under construction at the Hong Kong International Airport by Cathay Pacific which will open in the beginning of next year. It will be one of the largest cargo terminals in the world with a capacity of about 2.6 million cargoes each year. "It'll be world class in terms of efficiency and energy consumption," Slosar said with a smile.

In addition, the airline has equipped its fleet with 10 new Boeing 747 freighters and 8 Boeing 777 freighters are under way.

"It'll give us a large and very fuel-efficient and low-cost freighter networks to help us continue to build cargo business," said he.

Slosar believed the largest trade flow in the world for cargo is to and from China. As a part of China, Hong Kong is a good place to provide services in helping that trade flow to exist and to move efficiently.

"The infrastructure in Hong Kong, in terms the customs, the trucking routs, the terminals, everything makes the trade and logistics happen efficiently."

Looking ahead, Slosar is quite confident and optimistic. "Hong Kong is always to be flexible, and to be able to adapt itself to whatever it required to be successful in the world economy. I think Hong Kong will continue to do that in the future. I'm very optimistic about the mainland economy and the mainland society, and I'm very optimistic about Hong Kong's opportunity as part of that," he said.