Aviation Policy – Green Paper
Open Skies Agreement with the US
In the case of Hong Kong, having an open skies agreement with the US, can help the city to improve their transportation system, both for the travelers and business sector.
This can be done by Hong Kong by signing an agreement with the US to open its sky further that focuses on allowing an unlimited number of US airlines in order to operate in the territory and then allow the US to have the freedom to set the ticket prices and vice versa (Bnet, 2005). On the other hand, the city would demand the rights to enter the US domestic markets or cabotage in return for the concessions on open skies (Outsourced Logistics, 2005). This is because under the open skies policy, the US airlines would enjoy unfettered access to the regional markets that feed the city, on the other hand, the Hong Kong airlines would remain banned from the likewise competing on American turf (Outsourced Logistics, 2005). The said situation shows unfairness and imbalance. In addition, the passengers and cargo markets are not independent to each other, thus the liberalization of the air cargo service will have the impacts on the different services towards the passengers. As a result, if Hong Kong unilaterally opened its fifth freedom cargo rights, the foreign carriers will enter the market that will lead to the decline in the prices as well as increase in the volume of the cargo services. On the other hand, the local carriers will lose a vital amount of business to the foreign airlines under a great disparity in the market share of the domestic carriers and foreign mega-carriers. It will affect the performance of the home carriers and it is important to consider that the performance of the home carriers is important in the entire aviation industry of the city. Due to the fact that the domestic market in the US is still close for access of foreign carriers, Cathay Pacific and Dragonair would reduce their ability to build up a strong hub-and-spoke system for the city (Ying, 2003, p. 89).
Importance of US Open Skies Agreement to Hong Kong
There are some critics who are claiming that open skies with US would help Hong Kong to maintain its position as one of the most important financial and aviation hub in the world. One of the main benefits of the agreement is that it would create positive impact on the users of the freight services (Ying, 2003, p. 89). This is due to the fact that open skies agreements are vital to the efficient movement of high value cargo in the Hong Kong’s economy, and its connection to the global economy (BNET, 2005). In addition, it has a great impact over the passengers market, particularly those leisure travelers who are availing economy-class ticket, because open skies agreement can help to lower the air fare due to the presence of intense competition. Thus, the intense competition can help improvement, development and innovation for different airline companies in terms of their service offerings to their customers.
Fifth Freedom Rights and Level of Relaxation
On the other hand, it is important to consider the different aspects that will be included in the actions of the city regarding the open city. Primarily, it is important to consider the level of relaxation. The US is considered as one of the most famous country who has totally abolished the influence of the Chicago convention in their aviation policy. In Hong Kong, it will be important to maintain some point where in its aviation policy will offer some control on level of relaxation. Thus, the power or control of the government in the aviation system of the city will not be totally removed, but will just be minimized. More importantly, it is vital for the government of the city to maintain high standards of aviation safety and security support each other in order to sustain peace and order within the city as well as the US. When the fifth freedom is granted to the US, Hong Kong will allow aircraft of the carriers from the US to transport from Los Angeles through Hong Kong and transport the passengers from Hong Kong to the third Asian country like Bangkok. On the other hand, US carriers will use another aircraft in order to transport the passengers from Hong Kong, together with the passengers from Los Angeles to Bangkok (Ying, 2003, p. 40).
Organizations to be Consulted
In order to come up with the decision regarding the open skies agreement, it is important to focus on the organizations that will be affected by the decision, primarily, the Cathay Pacific Airways. Cathay Pacific is considered as the home carrier of Hong Kong, and it has been serving and growing with the city for about 60 years (Cathay Pacific, n.d.). This is due to the fact that the home-carrier plays an important role in the improvement of the entire aviation system of the city. Only the strong home-carrier can help to expand the trunk routes and extend the network efficiently for the city. Furthermore, a dominant home-carrier, with its own headquarters that are located in the home base, has a much stronger linkage as well as multiplier effect in the local economy compare to foreign carriers. Above all, a strong home-carrier can help to maintain a stable supply of air transport services for the hub, thus will help to prevent any disruption of services because of different political and other types of crisis situations (Law & Yeung, n.d.). In addition, the government must also communicate with the different local and international environmental organizations in order to prevent any health hazardous aspects in the plan.
In addition to that, the Hong Kong government must also be consulted, together with the different economic departments or government organizations, primarily the Hong Kong Development Council. This will help the city to study the different possibilities and future problems that can arise due to the agreement. In addition to that, it can also help the city to decide, whether the action will be beneficial both for the US and the city. Aside from that, the tourism board must also be included in the consultation process in order to connect the action with the growing number of visitors in the city.
In order to come up with the agreement, it will take a month, due to that each and every organization that have mentioned will have to study and research the impact of the agreement to their performance, thus the whole city. In addition to that, after individual research, the government of the city, will present and connect all the individual idea, and then consider the points that will be given by the US government.
The Need for Third Runway
Open skies means unlimited number of aircraft that would travel in the city, thus it will mean more air traffic demand to be served. Clearly, the city is having a capacity problem. And the congestion problems are being felt at the current capacity of 54 movements per hour in spite of having two wide-spaced parallel runways. That’s why it will be important to have third runway in order to support the future demands or needs of the aviation system of the city. However, there are different aspects that must be considered such as policies and actions that will guarantees and cover noise control, night flying, environmental works, highway improvements, public transportation, community relations, social policy and the ultimate capacity of the airport (Law, Fung, Law, Tse & Chan, 2007).
Based on the timing, it can be said that the concern of the public regarding the issues of environment and politics are the key factors that determine the actual duration of the project. In terms of environmental factors, it focuses on the noise and the air pollution that will be released by the airplanes. These are hazardous to the environment and later on to the health of the people. That is why it will be important to set a standard that will delimit the airplanes that will enter the city, it will be important to make sure that only less-pollutant in terms of noise and air can enter and use the runway of the city.
References
Cathay Pacific and Hong Kong. Cathay Pacific. Retrieved November 20, 2008, from http://www.cathaypacific.com/cpa/en_INTL/aboutus/commuity cxadhk
Controversy in Hong Kong US Open Skies Talks (2005, April 25). Outsourced Logistics, Retrieved November 27, 2008, from http://outsourced-logistics.com/logistics_services/outlog_story_7120/
Kim, A. (2005, April 20). Mineta Makes Big Push for Open Skies in Hong Kong. Aviation Week. Retrieved November 20, 2008, from http://www.aviationw eek.com/aw/generic/story_generic.jsp?channel=aviationdaily&id=news/HKOS04205.xml&headline=Mineta%20Makes%20Big%20Push%20For%20Open%20Skies%20In%20Hong%20Kong
Law, C. K., Fung, M., Law, J., Tse, D. & Chan, K. Y. (2007, November 28). HKIA’s Third Runway: The Key for Enhancing Hong Kong’s Aviation Position. The Chinese University of Hong Kong. Retrieved November 20, 2008, from http://www.baf.cuhk.edu.hk/research/aprc/activities/files/Fina l%20Runway%2029Nov.pdf.
Law, C. K. & Raymond, Y. Research Update: The Reality of “Open Skies” and Its Relevance for Hong Kong. Hong Kong Policy Institute. Retrieved November 20, 2008, from http://www.hkpri.org.hk/bulletin/15/rupdate.html
Mineta, N. (2005, April 19). US Official Urges Hong Kong to Liberalize Aviation Market. Washington File. Retrieved November 20, 2008, from htt p://news.findlaw.com/wash/s/20050419/20050419135710.html
US Urges Hong Kong to Open Skies (2005, June 20). Bnet. Retrieved November 20, 2008, from http://findarticles.com/p/articles/mi_m0CWU/is_/ai_n27853 148
Ying, M. (2003, June). A Study on the Impacts of Liberalization of the Fifth Freedom Rights on Hong Kong’s Aviation Industry. Hong Kong Polytechnic University, Retrieved November 27, 2008, from http://online.lgt.polyu.edu.hk/ fyp/docum ents/bsc_03/PO_186_03.pdf
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