Business Aviation Market Intelligence

HKBAC: Marching towards its 25th Year 

HKBAC: Marching towards its 25th Year 

For a lot of people, the age of 25 is when things start to change. There is a greater sense of urgency that wasn’t present in one’s late teenage years or early 20s; there’s an arguable need to think bigger and make a few key changes that will aid in growth years down the road. 

The same could be said for the Hong Kong Business Aviation Centre (HKBAC), the city’s only Fixed-base Operator (FBO) located at Hong Kong International Airport, which will be celebrating its 25th anniversary in 2023. It, too, is aiming for greater things. For one, the HKBAC started its US$50 million expansion project in October, 2022, which will see the FBO expand its existing facility by five times and double the size of its existing parking lot.

The decision coincided with Hong Kong finally scrapping its mandatory hotel quarantine, a move that reignited some hope in both the city’s business and general aviation sector, providing both industries with the opportunity to recover.

A long-term solution 

All was in full swing in the city prior to the pandemic – Hong Kong International Airport handled about 71.5 million passengers and 4.8 million tonnes of cargo in 2019, according to official airport data, but only a small number of these were business aircraft. 

This, however, is not due to a lack of demand, but the difficulty that comes with getting a runway slot, as well as a shortage of landing permits and parking spaces at the airport. 

The Civil Aviation Department and the Airport Authority Hong Kong designed a joint application system in September 2016 to ensure that there would be a number of daily slots available for business aviation users, and allocated a daily average of over 20 slots to general aviation or business aviation aircraft. 

But the increase in slot availability couldn’t address the root of the problem. Hong Kong needed a long-term solution to keep up with market demand whilst also driving development within the local aviation sector. 

To solve the shortage of runway slots, a US$18.2 billion expansion at Hong Kong International Airport began in 2016 and is expected to be completed in 2024. One of the first stages was completed earlier in 2022, which saw the airport open its much needed third runway. 

Unparalleled advantages 

HKBAC is the first international FBO in Asia that has a co-location Customs, Immigration and Quarantine (CIQ) arrangement, making it more convenient for passengers by shortening the arrival procedure. 

HKBAC aims to be a world-class FBO facility through its expansion plans, which also include building a new all-weather canopy to shield private jets from various weather conditions. 

New facilities also include a new CIQ Hall for passengers arriving or departing, a more spacious VVIP lounge and suites, an airside facility for transit passengers, a helicopter support facility, and a covered passenger and visitor car park, which comes with electric charging stations and an enhanced crew lounge.  

HKBAC will also leverage Hong Kong’s strategic location in Asia. As Lam Sai-hung, Secretary for Transport and Logistics pointed out during a groundbreaking ceremony held by the HKBAC on October 18, 2022 to announce the Expansion Project,  “Hong Kong is blessed to be located in the heart of Asia. From Hong Kong International Airport, we can reach most major Asian cities within four hours of flight, and cover half of the world’s population within five hours. 

With a robust economy both in Hong Kong and in the Greater Bay Area, as well as Hong Kong’s status as a premier international financial and trading center, Hong Kong is a particularly fertile ground for business aviation development, and our continued success in business aviation is exemplified by nothing better than the HKBAC,” Lam added.  

Hong Kong’s large pool of ultra-high-net-worth individuals (UHNWIs), a large number of whom prefer to travel via business jets, may also aid in the recovery of the city’s business aviation sector and general aviation industry at large. According to World Ultra Wealth Report 2021, a study by wealth intelligence solutions provider Wealth-X, Hong Kong has the second-most UHNWIs in the world, with 9,530, just behind New York’s 11,475 in 2020.  

HKBAC was also named the “Best Asian FBO” in the 2022 Professional Pilot Magazine PRASE Survey 15 consecutive years in a row, making it the only FBO in Asia to win the award. The annual survey itself is a tabulation of customer opinions of aviation ground services. Executives in charge of flight departments, aviation managers, chief pilots, chief executive officers, and other qualified subscribers are polled once a year in order to determine the PRASE Winners List. 

Aiming for the future 

With nearly 100 aircraft based in Hong Kong at its peak in 2017, the HKBAC has seen a drastic fall in the number and movements of aircraft as a result of COVID-19 related travel restrictions and border closures since 2020. The number of business travelers in Hong Kong is expected to pick up in light of easing restrictions, but a more pronounced recovery of the industry – which relies on the mainland China market – will depend on when the mainland will drop all restrictions and open up to the rest of the world.

HKBAC is also exploring greener initiatives, including the use of sustainable aviation fuel (SAF) by working closely with Airport Authority Hong Kong (AAHK), which has been working with fuel suppliers to procure SAF for trial flights in 2022.

HKBAC has the technical and operational capacity to support this emerging change and will ensure we can fulfill our customer’s needs once available. In addition, we are working with our fuel suppliers to provide options for carbon offsetting programs which can allow our customers to uplift fuel and offset their carbon emissions prior to SAF being fully available in HKIA,” according to HKBAC.

With Hong Kong starting to dial back its COVID-19 restrictions, and the airport finally opening its third runway in 2022, the FBO has many reasons to celebrate its 25th anniversary in 2023. And with work already underway to increase the size of its footprint, the HKBAC is future-proofing its facilities to ensure that it will be ready for the next 25 years and beyond.