Overview 

Aircraft, Engines, and Airport/Ground Support Equipment Market in Hong Kong

Year	2006	2007	2008 (estimated)
Total Market Size	1,513	1,979	1,550
Total Local Production	0	0	0
Total Exports	1,917	2,271	1,850
Total Imports	3,430	4,250	3,400
Imports from the U.S.	509	946	750

All figures are in US$ millions.  The above statistics are unofficial estimates, extracted from Hong Kong Census and Statistics Department and other sources.

Hong Kong’s market for aircraft and aircraft parts has grown significantly in the last few years due to the increase in aircraft movement, passenger numbers, and cargo volume.  Even amid the global economic downturn, Hong Kong International Airport (HKIA), the world’s busiest cargo airport, still saw overall growth rates of 1.6% and 1% in passengers and air traffic movements respectively in 2008.  In the same time period, air cargo throughput recorded a decline of 3%.  In total, HKIA handled 48.5 million passengers and 3.6 million tons of air cargo, and 301,000 total aircraft movements in 2008.

While the market environment for the global aviation industry will remain challenging in 2009, the long-term industry outlook for Hong Kong is still very promising.  Hong Kong is an international air traffic hub, with extensive flight connections to major destinations worldwide.  Many travelers to Asia use Hong Kong as a first stop to other points in the region.  Similarly, many mainland China tourists and business travelers make flight connections in Hong Kong for overseas itineraries.  In terms of air cargo, high-value goods manufactured in southern China are shipped out of Hong Kong, taking advantage of its reliable, transparent and secure trade and logistics systems.

Hong Kong relies entirely on imports of aircraft, aircraft engines, and aviation equipment to meet its needs, as there are no aircraft, engine, equipment or components manufacturers in Hong Kong.  Maintenance Repair Overhaul (MRO) and business aviation have been the two major growth areas for Hong Kong in the last few years.

The growth of MRO is attributable to the increase in air traffic, the emergence of low cost airlines, and Hong Kong Aircraft Engineering Company’s (HAECO – Hong Kong’s primary aeronautical engineering and maintenance services company) new maintenance contracts signed with major airlines in recent years.  Through joint venture partnerships, HAECO has expanded into different cities in China and overseas.  U.S. aircraft parts and engine suppliers should note these partnership arrangements.

Fueled by an increasing number of high net-worth individuals and business magnates in Hong Kong and China in the last decade, the business aviation market also saw a remarkable annual growth rate of more than 20%.  In late 2008, Honeywell forecasted global delivery of 17,000 new business aircraft from 2008 through 2018. The Asia Pacific region is a new frontier with exceptional potential for private jet usage in the region.  Among major Asia Pacific cities, Hong Kong has the fastest-growing business aviation terminal in Asia.  A third business jet hangar is under construction at Hong Kong International Airport. 

Macau’s gaming sector has also stimulated the city’s long-term air traffic growth, including a sizable increase in business aviation.  However, from January to November 2008, the Macau International Airport handled 4.7 million passengers and 46,404 aircraft movements, representing a drop of 5.7% and 4.9% compared to the same period in 2007.  While Macau’s aviation industry will likely face challenges brought about by the financial and economic crisis in 2009, the future remains promising due to the expected growth of business jet traffic, helicopter traffic, air cargo trade and an increasing number of airlines flying into Macau.

Best Products/Services

Business jets and related services
Training for air traffic controllers and maintenance personnel
Consumable aircraft parts and expendable items
Air traffic control use simulators

Opportunitites

There are less than ten major aircraft components & parts distributors and trading companies in Hong Kong.  Most of these distributors also sell to the MRO market and airlines in China and other Asian countries.  U.S. aviation industry manufacturers should consider working with Hong Kong based distributors to access markets in China and Asia.

Resources

Trade Shows:

Asian Aerospace 2009
Date: September 7-10, 2009
Venue: AsiaWorld-Expo, Hong Kong
Website: www.asianaerospace.com

Airshow China 2010
Date: November 16-21, 2010
Venue: Zhuhai Airport
Web site: http://www.airshow.com.cn/en/index.html

Industry Contacts:

HK Business Aviation Center
www.hkbac.com

HK Airport Authority
http://www.hongkongairport.com/eng/business/airport-authority/introduction.html

Macau Airport Authority
http://www.macau-airport.gov.mo/en/index.php

Asian Business Aviation Association:
http://www.asbaa.org/intro_en.php

For more information about this industry sector, please contact U.S. Commercial Service:

Ms. Olevia Yim, Sr. Commercial Specialist
Email: olevia.yim@N0SPAM.mail.doc.gov
Tel: (852) 2521-1467; Fax: (852) 2845-9800