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Mr. CHEN Xiaoning Guangdong Airport Management Corporation (GAMC)

Implementing the Strategy of Hub Airport to Develop the Logistic Business in Baiyun Airport. Mr. CHEN Xiaoning Guangdong Airport Management Corporation (GAMC) . Outline Position and target of the cargo hub Advantages of Baiyun Airport in developing logistics

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Mr. CHEN Xiaoning Guangdong Airport Management Corporation (GAMC)

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  1. Implementing the Strategy of Hub Airport to Develop the Logistic Business in Baiyun Airport Mr. CHEN Xiaoning Guangdong Airport Management Corporation (GAMC)

  2. Outline • Position and target of the cargo hub • Advantages of Baiyun Airport in developing logistics • Measures to push the logistics development

  3. Strategic goal of ‘The Eleventh Five-Year Development Plan and 2020 Long-term Prospect of Baiyun Airport ’: Baiyun Airport becomes a comprehensive aviation hub of Asia-Pacific Region. Compared with that in 2003 before relocation, the PAX traffic was doubled and reached 30.96 million in 2007. It was ranked No. 30 among the international airports.The cargo throughput climbed to 700, 000 tons, the average increase is over 40% in the last three years. In 2007, there are 53 operating international routes. PAX/yr(10000 ppl) Cargo/yr(10000 tons)

  4. In the first two months of 2008, the passenger throughput was 21.5% more than which of 2007, meanwhile the cargo throughput increased to 116% of 2007. Our hub strategy is being implemented with steady steps.

  5. 1、Position and target of the Baiyun Airport cargo hub A、Strategy Position By establishing a completed, efficient and rapid platform of logistics operation and information, assuredly improve the service and the magnet to oversea logistics, Baiyun Airport will finally act as a cargo hub of Asia- Pacific Region.

  6. 1、Position and target of the Baiyun Airport cargo hub B、Target Phase I:In 2010, a preliminary cargo hub with 1.7 million tons cargo, the rate of on-carriage is expected to exceed 30%, and the proportion of international and regional cargo is expected to exceed 50%, entering top 15 of global cargo hubs. Phase II:In 2015, further developed as a well-founded cargo hub with 3 million tons cargo, the rate of on-carriage will reach 50% or so. Phase III:In 2020, a mature cargo hub with 4 million tons cargo, entering top 10 among the global airports.

  7. 2、10 advantages of Baiyun in developing cargo business A、FedEx Asia Pacific Hub will be put into use by the end of this year. FedEx Asia Pacific Hub will begin its trial operation from November 5 this year, and scheduled to operate officially since December 27 this year. As one of the three largest global hubs of FedEx, it will be the core of the express mail connecting each continents for the FedEx. 150 cargo flights will be scheduled to connect major cities around the world. Meanwhile , the cargo route network in Baiyun airport will be completed basically.

  8. 2、10 advantages of Baiyun in developing cargo business B、Having strong support for developing airport industrial park from government According to the feature of FedEx Asia Pacific Hub, we are planning to build a comprehensive Free Trade Zone on the north of the FedEx Asia Pacific Hub, comprising of processing, logistics, free trade, international distribution and in transit in order to link industry and logistics seamlessly to improve and integrate the service of Baiyun airport and the capability of concentrating and spoke. Industry Area, logistics service area, Business area, R&D area, life service Area, feature reservation

  9. 2、10 advantages of Baiyun in developing cargo business C、Location Advantage Guangzhou is located in the center of Asia Pacific region, and it’ s also the only comprehensive airport hub in south, southwest and middle south of China. It has competitive advantages to develop international cargo hub. It takes no more than 4 hours to reach the big cities in Asia and 5 hours to reach the countries and regions, which account for half of the world population. It takes less than 18 hours to get to major cities around world if departing from Guangzhou. With the implementation of Free Trade Zone Strategy of China – ASEAN and the expansion of economy cooperation, Guangzhou , as the gateway between China and ASEAN, will have larger space to develop commercial logistics.

  10. 2、10 advantages of Baiyun in developing cargo business D、Strong regional economy and continuous upgrading of industry structure In 2007, Guangdong’s GDP has reached 3 trillion, accounting for one- eighth of the whole nation, and foreign trade took up one-third of the of the whole nation. The continuous optimizing industry structure in Pearl River Delta region will bring more demands for air cargo and provide larger space for air cargo development. Four industries that are closely related to cargo logistics (electronic appliance, pharmaceutical, automobiles and textiles) will develop rapidly in the next few years, which will build a firm foundation for the development of air cargo and airport economy.

  11. 2、10 advantages of Baiyun in developing cargo business • E、Further improved cargo infrastructure and well developed situation • Two domestic cargo terminals • Customs supervisory area • Post transit centre • International neutral cargo terminal: with 10 freighter slots, covering 80,000 square meters, including a first class warehouse of 40,000 square meters, through which 520,000 tons of international cargo capacity will be added annually. Another second-class warehouse covering 40,000 square meters can meet the needs of all the large freight forwarders. Baiyun airprot has a big developing potential in the future. Currently, it covers 18 square kilometers , 88 square kilometers for non-construction, 152 square kilometers for controlled planning area with smooth land and optimum developing condition. 5 runways and 3 terminal are planned to be constructed in the long run. The throughput of passengers will reach 10 milion, and the throughput of cargo and post will exceed 6 million tons.

  12. 2、10 advantages of Baiyun in developing cargo business F、Strong competitiveness of based airlines and well developed routes. Baiyun Airport serves for based airlines, such as China Southern, Shenzhen Airlines and Hainan Airlines, and more than 20 domestic and 30 foreign airlines. On December 15, 2007, China Southern joined Skyteam. Meanwhile, Baiyun Airport has become the core hub for the Skyteam members in China. China Southern has also confirmed its cargo development strategy focusing on Baiyun Airport.

  13. 2、10 advantages of Baiyun in developing cargo business F、 Strong competitiveness of based airlines and well developed routes. Baiyun Airport has got 53 international and regional routes, and more than 120 domestic routes. International and domestic transit network has come into shape. With the FedEx Asia Pacific hub putting into operation, the international routes will reach around 70 by the end of this year. By 2010, the international and regional routes will reach 100 or in Baiyun Airports before the Asian Games takes place.

  14. 2、10 advantages of Baiyun in developing cargo business G、Establishing Strategic partnership with united inspection Bureau to build airport hub. On March 20,2007, Baiyun Airport signed ‘Strategic Cooperation’ with airport customs, frontier and Inspection and Quarantine to simplify the customs procedure, improve the efficiency and cooperate to building Baiyun Airport Hub. On August 20, Baiyun Airport signed the ‘Strategic Cooperation Memo’ with Guangzhou Customs and Huangpu Customs to fully implement the policy of convenient customs in general Pearl Delta Region. The United Inspection Bureau has taken new measures to support the development of Baiyun Airport, such as fast pass customs system between Guangdong and Hong Kong, Baiyun Airprot nonlocal cargo station in Dongguan of, ect.

  15. 2、10 advantages of Baiyun in developing cargo business H、Ideal Ground Transportation Facilities Local government attaches great importance to the interaction between Baiyun Airport and the transportation system around the airport. Authorities are trying to set a transportation hub including road, railway, subway and highway. Till 2012, there will be 12 highways connecting Baiyun Airport which only cost people 2 hours from PAN-Pearl river delta to Baiyun Airport. From the long-term plan, authorities will construct a Baiyun Railway Station.

  16. 2、10 advantages of Baiyun in developing cargo business I、Subsidiary to the cargo airlines To increase the international cargo airlines to Guangzhou, the Government has drawn the regulation called “Management for the subsidiaries to the cargo airline in Guangzhou Baiyun”, which is of great financial support to the international cargo airline. This policy will be in effect in the near future.

  17. 2、10 advantages of Baiyun in developing cargo business J、Policy support to the logistics development In order to support the construction of the Guangzhou air hub, the CAAC and Guangzhou Provincial Government have together formed a team named “ A team to promote the construction of the Guangzhou Air Hub” in November 2007, supporting every detailed aspect of the construction. The first meeting among the team was held in April which aimed to meet the challenge facing BaiyunAirport and this meeting further promoted the development of the aviation business at Baiyun Airport

  18. 3、Measures to push the logistics development Continue implementing the Baiyun Logistics project, popularizing 4 concepts of: -Baiyun Cargo Fast Track -Baiyun Cargo City Terminal -Baiyun Cargo Alliance -Baiyun Cargo Information Platform

  19. 3、Measures to push the logistics development A 、Implementing Baiyun Cargo, Promoting 4 concepts a、Baiyun Cargo Fast Track In May 2007, we signed a strategic partner contract with United Inspection organization and set up a team focusing on the Co-chair internal meeting and further improving the situation of the customs environment. On the 10th of August, 2007, “ effective international customs system ”between Guangzhou and Hongkong came into effect. The northwest of the U.S was the first place to launch the customs express truck from Hongkong to Guangzhou. Under the support of the customs, we will further popularize this business.

  20. 3、Measures to push the logistics development A 、Implementing Baiyun Cargo, Promoting 4 concepts b、 Baiyun Cargo City Terminal The first Cargo City Terminal of Baiyun airport was open to business in September, 2007 in Dongguan and currently it runs well. International cargo in Dongguan can be transmitted directly after the inspection and declare at the Dongguan customs, which is convenient for the freight forwarder and owner of cargos. After the arrival of international cargo at Baiyun Airport , you can go directly to Dongguan Cargo station for customs declare which actually reduce the cost than you did the customs declare in Hongkong.

  21. 3、Measures to push the logistics development A 、Implementing Baiyun Cargo, Promoting 4 concepts c、 Baiyun Cargo Alliance In 2007, we signed the strategic cooperation contract with the biggest logistics company in China that is FedEx and the most influential freight forwarders which are Coscos Logistics and Sinotrans Air Transportation Development Co., Ltd . We also helped our strategic partner to have a trial on the honest freight, air customs declare and the A customs service promise, which greatly improve the sales volume and efficiency of operations.

  22. 3、Measures to push the logistics development A 、Implementing Baiyun Cargo, Promoting 4 concepts d、 Baiyun Cargo Information Platform To perfect and upgrade the existent system and synchronize the data of city cargo terminal and airport. Establish a new information system in the neutral cargo terminal and connect it with the customs, airlines and agencies.

  23. 3、Measures to push the logistics development B 、Taking advantage of the FedEx Asia- PacificHub to speed up developing In order to better use the influence of the FedEx Asia- Pacific Hub in upgrading our logistics industry and promoting the growth of economy, referring the economy development models of Incheon airport, Memphis airport and Subic Bay airport, we shall take the advantage of the FedEx Asia- Pacific Hub and establish an assorted industrial park with the local government guided by the nation’s free- trade zone policies. The research of this industrial park has been finished by the Development Research Center of the State Council. The industrial park has been brought into the city planning. The park locates to the northeast of the FedEx Hub. The park area is 20 square kilometers, with a 6.6 square kilometers’ phase 1.

  24. 3、Measures to push the logistics development C 、Expanding the airport with steady steps To ensure that the construction of neutral cargo terminal and FedEx Asia- Pacific Hub is on schedule and with high-quality. The third runway, which will serve in conjunction with the FedEx hub, will be constructed at the end of this year and come into service in 2010. At the west of the airport, near the fourth runway, developable space has been obligated to meet the future demands of the airlines.

  25. 3、Measures to push the logistics development D 、 Introducing ST Engineering joint-venture project This project will set up 2 double wide-body aircraft garages in the near future and 3 more in the far future. As the starting project of the airport industry park, it will bring a lot of enterprises engaging in aircraft parts manufacturing and maintenance.

  26. Thank you! 2008-3-26

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