A sea of troubles for Hong Kong: Public and charter ops and airlines struggle
“Kowloon City used to be the place for dinner before flying from Kai Tak Airport. Now it’s quiet,” says Victor Lau, a helicopter pilot with the Government Flying Service (GFS) of China’s Special Administrative Region of Hong Kong (HKSAR). In July 1998, the GFS was the first tenant of the abandoned Kai Tak Airport to move 45 minutes west to the new Chek Lap Kok (CLK) Airport on Lantau Island. Five years later the new airport also grew quiet, this time from severe acute respiratory syndrome (SARS). From March through May, airlines parked aircraft and the GFS flew the bulk of operations.At CLK, GFS deputy operations manager Leonard Leung parks a white Chinese bicycle in the cavernous hangar. “Good space, but everyone must travel a very long way.” The HKSAR pays pilots a commuting subsidy, but more critically “CLK adds five or 10 minutes to every rescue,” said Lau. “And at Kai Tak we could visually check out the weather in every direction–now we’re blocked by mountains.”But SARS cast a deeper shadow. Across the ramp from the GFS, Hong Kong airlines might resume full operations by next month, though normal revenues are nowhere in sight. In the first six months, airlines serving Hong Kong slashed prices by half to two-thirds, including regional carrier Dragonair. Cheap tickets alone could not buy consumer confidence. Rival Thai Airways even offered $100,000 to anyone catching SARS while flying its airline.
In May, 102 organizations–including 27 airlines, 11 hotel chains and the national tourist boards of Hong Kong and other Asian regions–campaigned with far-reaching deals, indefinitely raising the toll of SARS-based cuts but allowing some relief to aviation. “Operation Skyfit” discounts landing fees to CLK from 10 percent to half if they are carrying less than a 20-percent load, while select passengers can grab a free ride, courtesy of Rolls-Royce, to city center.
The Peninsula Hotel in Kowloon, one of the world’s most luxurious, had already offered Rolls-Royce connections but in Hong Kong’s slowdown has raised the bar by 33 stories. The Peninsula is part of Hongkong and Shanghai Hotels Ltd. whose chairman, Michael Kadoorie, is a renowned helicopter pilot who also owns Heliservices. In 1994 Kadoorie added the China Clipper heliport lounge to the hotel’s top floor both for connections to CLK and sightseeing. The facility is fitted in chrome and fine wood to match the flying boats that served Hong Kong in the 1930s.
Duty controller Paul Leigh has seen charters in the Aerospatiale AS 355N Twin Squirrel climb to 350 flights last year. At $267 each passenger per 12-minute ride, Heliservices plans to add new volume this year. Leigh believes passengers seek the comforts of familiarity with their fellow passengers and old-fashioned pampering.
Each sector of aviation in Hong Kong has taken up arms against a faltering economy and public fear. Government aviation was immersed in its core competencies of power and paperwork. Airlines failed in cutting cost, prices and service before turning to a profitable customer– cargo. The leisure and charter market, facing new security and a distrust of strangers, leveraged its exclusivity, flexibility and managed access.
Government Flying Service
In April 1993 the British Royal Hong Kong Auxiliary Air Force was disbanded to prepare for the 1997 transition to Chinese rule of Hong Kong. Renamed the Government Flying Service, the new Chinese organization melded the former search-and-rescue functions with civil defense and paramilitary enforcement duty; the aerial survey and VIP transport functions of the civil aviation department; firefighting duties at sea; and a flying doctor and dentist service to the remote outlying islands of Hong Kong and the New Territories. The diverse mission requires 245 full-time civil servants and a growing corps of volunteer flying paramedics.
Chinese government rule has added buying power but complicated hiring. For example, Hong Kong’s standard of living is 30 times that of China, though the gap is closing–from the top. Article 100 of Hong Kong’s basic law guarantees that civil service pay should be no less favorable than the former British rule, so in February Beijing froze civil-service salaries and over two years will phase them back to “handover level.” GFS payscales were slashed and aviation recruiting has stagnated.
Yet in the longer term, GFS may harvest its investment in Chinese youth. Besides his senior role with GFS, Leung is commanding officer of the Hong Kong Air Cadet Corps. Since the handover, some 2,200 cadets aged 12 to 18 have donned uniforms to serve in crowd control and civil functions. Most enroll in Australian flight schools since local training is prohibitive in cost and difficult to schedule, with the People’s Liberation Army taking most slots.
The GFS fleet consists of two Jetstream 41s, four Sikorsky S-76s and three S-70 Black Hawks (civilianized, with weaponry replaced by rescue and firefighting systems) and three Eurocopter AS 332L2 Super Pumas and an EC 155B1. In late spring, the GFS sold two of the S-76s to the Shanghai Flying Service and continues to train Chinese pilots; Shanghai will likely surpass Hong Kong traffic by the end of this decade.
Under Leung the GFS has captured patents for its innovation, including a redesign of the Sikorsky door that allows it to remain open during patrol up to 125 knots, and a double-digital handheld autopilot, enabling the rescue-hoist operator to fly the helicopter from the doorway. Maintenance is constantly tuned for the punishing hot-and-high envelope.
Some say the GFS has made the measurement of efficiency so exacting as to be itself a drain. In 1994 its maintenance division was awarded ISO 9002 certification, in 1998 its flying units were granted the same and today the entire department complies. Government generates paper and as such, had the most to cut. With minute control and enhanced e-mail, the GFS saved 167 reams (11 percent) of paper last year–but to help recruiting its use of envelopes rose by 153 percent. The GFS has since taken on office energy bills, vowing to sweat out cuts of 10 percent, or $424,000, in air-conditioning costs.
Though CLK is more physically remote than Kai Tak, adding flight time around Lantau Island, in addition to visual blinding and wind shear from terrain, last year the GFS managed 95 percent of its response time to within 20 minutes for “island zone” targets such as the major islands of Hong Kong, Cheung Chau, Hei Ling Chau, Lamma and Lantau, Peng Chau and Soko. Search-and-rescue helicopter missions met the 40-minute target, or one hour for targets within 50 nm. The GFS adds 30 minutes for each 50 nm, and its region of responsibility is huge–the South China Sea up to 600 nm south.
Last year, GFS helicopters flew 2,095 injured people to hospitals and guided more by merchant ship, as well as spending 139 hours aloft in firefighting duties. The Jetstream 41s dispatch for long-range initial search, then act as on-scene commanders, typically guiding a Super Puma to winch up the injured or manage collection from ships. Over-land rescue is handled with the Super Puma or the EC 155B1 (the latter having a 140-nm radius of action, FLIR, dual stretchers and emergency medical systems), with the most common emergencies being hikers in remote islands of the New Territories and fishermen in trouble. The Super Puma can also haul up to 23 police officers.
Before dawn on March 29, the GFS scrambled its Jetstream 41 to arrive within 16 minutes at an oil fire and explosion on the tanker Byzantio, 30 miles southeast, with a Super Puma on its heels to hoist the injured crewmen. In January the GFS rescued a fisherman 40 nm southeast who had been beaten by a rival fishing crew then thrown in the water. Last December, one of the Jetstreams flew 350 nm toward Vietnam to locate 13 crewmen who had abandoned ship to liferafts, steering commercial ships in rough waters to their rescue.
Leung directs high-profile missions such as seizing freighters loaded with refugees from Vietnam and the sizzling pursuit of smuggler boats, photos of which line the walls of the GFS pilot lounge. Still, most flight hours are routine–checking power lines and remote civil maintenance; hunting for illicit pager and cellphone installations on the hills; and aerial photography.
Before the Jetstream drops dye markers, smoke location markers or liferafts, its rescue targets are painted with FLIR and a video datalink and recorded by aerial survey camera with GPS coordination. In a market experiment, the set was packaged for use by the private sector. Prices for an aerial survey begin at HK$25,000 (about $3,200) per hour with additional fees for the government reprographic officers, processors for the Zeiss RMK TOP camera and film in rolls up to 400 feet. Though the Jetstream is commissioned privately, the Hong Kong Lands Department gains all copyrights and does a tidy business in resale.
In July the GFS launched a one-year trial to shore up the worsening land-traffic problem in Hong Kong. In addition to maritime and aviation rescue, the GFS will now respond to automobile accidents using its EC 155B1–that is if it can hire enough experienced aeromedical officers at the hourly compensation rate of $12.75.
With Hong Kong’s job slump, traffic from foreign business passengers declined, but the toll sharply affected Chinese regional travel between Hong Kong and mainland China, as well as long-haul routes to and from North America such
as “the New Hong Kong,” a slang term for the Toronto suburb of Scarborough (this commute may have helped fuel the SARS outbreak in the Canadian suburb).
Hong Kong’s immigration department is analyzing air travel patterns to ease clearance and health screening, using a new smart card’s thumbprint, personal details and laser-engraved security. Two million residents may hold the cards by the end of next year. Many of these residents are frequent fliers between the ages of 35 and 55, and local aviation companies have already capitalized on similar data from airlines. For example, Cathay Pacific teamed with the Hong Kong Aviation Club to offer 30 minutes of Cessna flight training in exchange for 35,000 “Asiamiles.”
The battle for business passengers was one of attrition even before SARS, pitting the reserves of major Cathay Pacific Airways against regional airline Dragonair. Until recently the two did not compete and even cross-fed passengers. Cathay owns nearly 19 percent of Dragonair, and Cathay’s parent, Swire Pacific, owns a further 7.71 percent. Dragonair held its select short-haul routes while Cathay courted high-end, long-haul passengers.
Then last year Dragonair took on Cathay’s “golden route” of Hong Kong to Taipei. Cathay rebutted with an application for new service to three Chinese mainland cities once exclusive to Dragonair–Shanghai, Beijing and Xiamen, which enjoy load factors of up to 66 percent and represent as much as 50 percent of Dragonair’s total revenue. In April, the licensing authority awarded the routes to Cathay so Dragonair fired off a 47-page challenge, with a new hearing pending this fall. With the gloves now off, both carriers have since jockeyed for more of each other’s business throughout Southeast Asia.
At the depths of the passenger drop fed by SARS, Dragonair canceled flights and reduced ticket prices to lure passengers, but still carried fewer than 500 people per day. By April, Dragonair had recovered to only transporting 4,000 people per day, down from a monthly total of 297,000 (for an average of 9,900 a day) in April last year. In June the company asked 2,800 of its employees to take four weeks of unpaid leave. Dragonair postponed the planned June delivery of two Airbus A321s to at least December and two A320s to at least 2005. Cathay suffered with similar percentages but larger numbers, losing $3 million daily via a 75-percent reduction in passengers. It also asked employees to take unpaid leave.
By July both carriers had rebounded to nearly 60 percent of scheduled flights, with plans to return to 90 percent last month and full volume by early next month, but the episode left each with full-year losses. One decision straining Cathay is a promotion to distribute 10,000 free tickets as part of a “welcome day” set for last month to entice scared tourists.
Despite losses, Dragonair may emerge stronger from a diversion taken at the peak of SARS. In partnership with DHL Worldwide Express, Dragonair began overnight cargo delivery to Shanghai. In April, Dragonair took on 46 percent more cargo than the previous year with 21,720 tons, even as its passenger volume fell by three-quarters.
Meanwhile, despite the idle corridors at Chek Lap Kok, the airport was chosen as “2003 Airport of the Year” for the third consecutive contest in a survey by SkyTrax Research. While passenger loads dwindled, cargo tonnage continued to mushroom at CLK and volume is expected to pass Memphis International (the FedEx main hub) as the world’s highest within five years.
The first rotary-wing aircraft in Hong Kong was a Cierva C-30A Autogiro, which arrived in 1934 and was written off two years later due to an accident. Helicopters served the Royal Air Force (its auxiliary is now part of the GFS) since 1958 at Shek Kong Airfield several miles inland at “the bowl” beyond mountains north of CLK and the former Kai Tak. In 1967 Royal Air Force Whirlwind helicopters were employed for internal security, followed by the Wessex until Chinese takeover in 1997. Shek Kong is now a People’s Liberation Army base, which in a fragile deal allows general aviation flights on weekends.
While public-use airports in Hong Kong went silent earlier this year, as did airport support services such as restaurants, limited-access facilities built loyalty from fear. The private Hong Kong Aviation Club on the grounds of the abandoned Kai Tak Airport served crowds of diners while city restaurants closed. “There’s trust here. We all know each other and the background of the kitchen staff,” said past club president Hogan Loh. The aviation club shares property with the air cadet headquarters, which required all cadets to wash hands both upon entering and leaving with Dettol medicated wash, and to clean all hangar and work areas with diluted bleach. Officers were issued face masks for optional use.
Likewise, the opulent Peninsula Hotel on Salisbury Road in Kowloon has seen new interest in its China Clipper lounge. The Peninsula helipad and reception room were built in part to honor Myrtle, a Sikorsky S-42B formerly operated by Pan American that was sunk at its moorings off Kai Tak in December 1941 during a surprise attack by Japanese fighters. The Peninsula has stood since 1928 and last year commemorated its 75th anniversary. During last year’s celebration, it launched a HK$1,928 (about $247 per person) package called Fly and Dine, combining a 12-minute helicopter ride in a Heliservices AS 355N with a seat at one of the hotel’s renowned restaurants.
Chairman Kadoorie’s remaining Heliservices fleet of two Llamas operate from across Victoria Harbor near the Hong Kong convention center for sightseeing, charter and photographic and private survey flights. With nearby Kai Tak now defunct, helicopters have become the main flight activity of the neighborhood. The demand has been limited only by Hong Kong’s frequent, subtropical gusts, especially during typhoon season from May to October. The pad’s crosswind limitation is 28 knots, “which can be tough to meet,” said duty controller Leigh.