Aviation Management Assignment: Impact of Hong Kong Airport to Pro-Democracy Protests of 2019-2020

Question

Task: Background
In June 2019, a series of anti-government,pro-democracy protests began in Hong Kong. These were initially peaceful and came about because of proposals to introduce legislation allowing extradition to mainland China. The protests attracted hundreds of thousands of people. By September 2019, the protests became more violent with confrontations escalating between protesters and police. The impact was felt by local business, tourism and the aviation sector in Hong Kong. Both the leading flag carrier, Cathay Pacific, and Hong Kong International airport, the main gateway into and out of the territory, were affected by the protests.

Evaluate the impact and response of either Cathay Pacific or Hong Kong International Airport to the events surrounding the Hong Kong pro-democracy protests of 2019-2020 by answering the following tasks in this aviation management assignment:

A. Indicate which of the two aviation organisations has been chosen and provide a brief justification for your choice
B. Carry out a definitional analysis of the term ‘democracy’ using 3 appropriate sources
C. Based on the given data sets, determine the nature of current trends in the aviation sector
D. Analyse the performance of the organisation chosen over the last 3 years (2018 to 2020) using figures relating to passenger numbers, revenue, costs, profitability and customer satisfaction
E. Determine the effectiveness of the chosen organisation’s recovery from the Hong Kong pro-democracy protests

Answer

A Chosen organization
Indicate which aviation organizations have been chosen and provide a brief justification for your choice

Hong Kong Airport
The aviation organization taken into consideration for the aviation management assignmentis the Hong Kong Airport. It is one of the leading international airports established on the island of Chek Lap Kok. The approximate elevation of the airport is 8.53metres. It has two runaways. There are three categories of transportation that can be availed from the airport. These are the modes of tram, train and bus. The Hong Kong Airport is accommodated over a space of 1255 hectares. The airlines that are available in the Hong Kong airport are- El Al Airlines, Air Seoul, Mandarin Airlines, United Airlines, Bangkok Airways, Indigo Airlines, EVA Airlines and Air India Express. The airport has been chosen for the study due to the active participation of the protestors in a pro- democracy protest march. Thousands of protestors gathered near the bus terminal of the airport in solidarity for the pro-democracy protests. They were thrashed by the police rally. A cloud of chaos gathered amidst the protestors and police leading to tear gas explosion, water cannon expulsion and lives warning shots.

B Definitional analysis
Carry out a definitional analysis of the term ‘democracy’ using 3 appropriate sources

Source 1: Wan Chan, D.S. and Pun, N., 2020. Economic power of the politically powerless in the 2019 Hong Kong pro-democracy movement. Critical Asian Studies, 52(1), pp.33-43.

Source 2: Repucci, S., 2020. A leaderless struggle for democracy. Highlights from Freedom House Annual Report on Political Rights and Civil Liberties: FREEDOM IN THE WORLD 2020.

Source 3: Hartley, K. and Jarvis, D.S., 2020. Policymaking in a low-trust state: Legitimacy, state capacity, and responses to COVID-19 in Hong Kong. Policy and Society, 39(3), pp.403-423.

And finally, construct own definition of ‘democracy’
The pro- democracy protest in Hong Kong opened a new vision for the political alignment of Hong Kong. It led to a gradual increase in the democratic power of the supporters. It mainly worked on the universal suffrage of the Chief Legislative and executive council. The democratic rights are fulfilled under the realms of basic laws of “One Country, Two Systems”. Thousands of protestors gathered near the bus terminal of the airport in solidarity for the pro-democracy protests. They were thrashed by the police rally. A cloud of chaos gathered amidst the protestors and police leading to tear gas explosion, water cannon expulsion and lives warning shots.

C Current trends in aviation
Based on the given data sets, determine the nature of current trends in the aviation sector.

You have three sets of data to consider, each represented by a table. These are given below:

Table 1: Key operational results for Hong Kong International airport, 2016 to 2020.

Table 2: Traffic results for Cathay Pacific, 2018 to 2020.

Table 3: Airline industry net profit ($bn), by region, 2018-20

Consider each set of data and comment on the trends depicted
Table 1: As per table 1, there had been a statistical analysis of key operational results of Hong Kong Airport. It ranged between the years of 2016 and 2020. It is found that the passenger number increased from 70,513,000 to over 80,000,000 in the period of four years. Other than this, the aircraft movement showed gradual increase in its number from the year of 2016 to 2018. In the year of 2019, a slight decrease was observed followed by a sharp decline in the year of 2020. The ratio of cargo handles increased with the years gradually ranging from 4,521,000(Hong Kong’s aviation sector projected to be Asia’s worst hit, 2021).

Table 3: As per table 3, there had been statistical analysis of the net profit of the airlines in the recent years. Countries like North America, Europe, and Asia, Pacific regions, Latin America and other middle countries have suffered a huge loss in recent years. The highest loss is suffered by the countries of North America(Airline industry revenue worldwide 2019 | Statista, 2021).

D Performance of the organisation
Analyse the performance of the organisation chosen over the last 3 years

Hongkong airport is a very modern one equipped with a tight security and all the possible facilities that would make flying for the passengers easier and more convenient. The airport is very long, with an underground rail system to help passengers get around. All terminals have excellent facilities and many amenities to provide comfort for the people. There are wide glass windows that overlook the peaks of Lantau Island, which can be breath-taking at times. And passengers can admire the planes of all brands parked right outside those windows.

Passenger numbers: -
The numbers of passengers are vital to an airport's sustainability. This number is linked to other aspects of airport organizational effectiveness and maintenance, such as resource realisation, improved check-in procedures, and the creation of hold baggage networks and even how much profit can be estimated annually(About Us - Hong Kong International Airport, 2021).Passengers (or cargo) of Hongkong Airport are counted as entering or leaving at airports. A passenger (or freight shipment) who connects (changes to a separate flight number) is counted twice: once as arriving and once as departing. The Hong Kong airport's passenger traffic was projected to be 121.5 million in the last three years. Hong Kong International Airport, one of the world's busiest passenger and freight hubs, serves over 90 airlines on domestic and international routes.

The organization handled 43.768 million passengers last year, a 40.4 percent decrease from the previous year. However, the downturn was much narrower for its rivals, such as Hartsfield-Jackson Atlanta International Airport, which saw a 61.2 percent drop to 42.918 million passengers last year after retaining the title of the world's busiest for over two decades.

The existence of Hong Kong airport would have no meaning without its passengers, and their desires and needs affect how the organization is designed and handled.

Flight movement:
A take-off, landing, or simulated approach by an aircraft is known as a flight movement of an airport.

Airport management and ownership trends vary across region to region, resulting in major differences in flight movement, airport design, service, and maintenance decisions. The Hong Kong airport is one of the busiest airports of the world with a wide chain of flights having not only passengers but also cargo on board, taking off every twentyminutes. The organisation has two runways in operation and 419.975 air traffic movements since the last three years while simultaneously taking charge of the operation of shipping millions of tons of cargo and airmail.

The cargo handled at Hong Kong International Airport (HKG/VHHH) in Hong Kong was 5,120,811 metric tons and which accounted for 42 percent, or HK$3,550 billion, of Hong Kong's total external trade value, making it the busiest airport in terms of cargo shipment

Since the passenger number is very dense for the Hong Kong Airport, the flight movement is always evolving and never at rest.

The Hong Kong airport serves as a hub for many airlines, including China Airlines and China Eastern Airlines. Singapore Airlines and Ethiopian Airlines also use Hong Kong as a layover destination. The organization also has collaborated with Hong Kong Association of Freight Forwarding and Logistics Ltd. (HAFFA) on the subject of cargo handling operations and facilities.

Customer satisfaction
The performance is analysed by surveys and other data collection methods. A huge sum of the performance of the Hong Kong Airport depends on how much the customers are satisfied with the services. The data was collected from the passengers and the performance was justified on the basis of their views. This explains what needs and services passengers want and what the airport authority is providing. Studies show passengers are mostly concerned with security and safety. The customer satisfaction is measured when they are happy with the products, services of the airlines(Hong Kong International Airport (HKG/VHHH) - Airport Technology, 2021). The online ratings also check the performance of the Hong Kong Airport. The cleanliness and pleasant environment, renovations and improved service quality can greatly influence passenger’s satisfaction. Also, the dissatisfiers claim to face strict security check ins, bewildered signs and poor dining which creates a bad impression for Hong Kong Airport's performance. The airport facilities such as resting facilities, scheduled flight timings, handling luggage,employee services, airport cleanliness, information and commercial facilities handling, time accesses are also the main reasons for customer satisfaction. Studies show that strategic questions show the importance of customer satisfaction. Examining more aspects like the culture, art and technologies can be helpful for showing better results. The satisfaction factor can change the oil price and other aspects of the airline supply. Increasing the number of routes and number of flights can show better results. The Hong Kong Airport has invested a lot more capital since so many other airline agencies are in competition. Availability of flights in areas for the customers can be satisfying and it can bring good results later. Also change in the prices and increasing offers during special times and events can be helpful for customer satisfaction.

Revenue
The revenue system also affects the performance of the Hong Kong Airport. A statistical chart for 2019 shows Hong Kong revenue rose to four point seven billion Hong Kong dollars. Though the passenger numbers and flight movements were high, the revenue system collapsed during March 2019.

Figure 1: Revenue of the Hong Kong Airport
(Source:Airport Authority Hong Kong’s annual retail & advertising revenues fall -17.6% - The MoodieDavitt Report, 2021)

Costs
Hong Kong Airport has the busiest freight. In 2019, it was analysed that the Hong Kong Airport costs grew up to 6.2 percent, including the aeronautical costs of 55.8 percent and 39.9 non- aeronautical. The airport's costs depend on security and high-quality experiences of passengers. The costs greatly vary on flight cancellations, delays etc. The aggregate of airline costs and delays cost are added to the cost factors. Announcing that the next flight will be reasonable, can benefit the performance of the airport. The system operational costs maintain punctuality. The aircraft delay cost, opportunity costs are counted. Almost 13.55 dollars per passenger is needed to operate the cost. Analysing airport cost structure is calculated based on welfare economics. Services are offered with costs and also commercial activities. The airport charge structure is important because it affects the operating cost.

Profitability
The Hong Kong International airport witnessed a fall in their profit in the year 2018. The Hong Kong International Airport suffered a total fall of 9.6% profit among the total profit of 36.7% which resulted in their total profitability of the year to be 991 million dollars in total for the fiscal year of 2018 that ended in the year 2019. Although the airport made a good amount of profit in the business year of 2018 but according to the sources, the result of profitability for the airport was not up to the mark.

In the year of 2019, the Hongkong international airport witnessed a tremendous hike in its revenue as well as its profit which resulted in 5.89 billion dollars from the advertisement revenue, 4.72 billion dollars from the airport charges, 2.51 billion dollars from the services franchise, 1.51 billion dollars from the security charges and the balance from the rest. The year witnessed a good rise in their profits that resulted in a profitability of 5.88 billion dollars in the fiscal year of 2019-2020. The year of 2020 was a major downfall for the profitability of the Hong Kong International airport. The covid-19 pandemic brought down the downfall of the profit margins of the airport which fell by 17.6% and the profitability of the airport sank to 748 million US dollars(Coronavirus is one crisis Hong Kong’s airport cannot survive unscathed, 2021). This tremendously affected the profit margin of the airport as the people were unsafe for travelling also there was a life risk.

Figure 2: Profitability margin of the Hong Kong International Airport 2019
(Source: Hong Kong: profit of International Airport by sector 2019 | Statista, 2021)

Figure 3: Profit margin of Hong Kong Airport of three years
(Source: Self-made)

E Recovery of the organisation from the protests
Data search and their findings
The aircraft movement showed gradual increase in its number from the year of 2016 to 2018. The ratio of cargo handles increased with the years gradually ranging from 4,521,000. With the pandemic, the passenger number sharply declined to 4.6% from the range of 35.4 % (Can Hong Kong's democracy movement survive the walkout?, 2021). Accordingtodata sources, the airlines of North America suffered huge losses in the year of 2020 owing to the pandemic crisis.

Recovered from pro-democracy protests, Retail Sales Slump
It is found that the private properties of Hong Kong hold about 65% of the city’s GDP (Impact on Economy 2021). The customer as well as the retail section is quite aware and cautious of the global outlook of the economy. The consumers had been drained of their resources by the protestors. In the present scenario, they had been quite aware of the expenditure to recover the losses.

Figure 4: Impact on Economy
(Source: Impact on Economy 2021)

Recovery of Stock Market
With the progress of the protestors and their clash with the police, they demanded withdrawal of the bills, investigations of brutal harassment by the police, violent attacks. The riots affected the stock market very badly. It drained the business shares and added economic misbalances in the city. As per the investors, it imposed threats on the rally of the business employees. The civil unrest has been taken into consideration and recovery is in process to get back to normalcy and profitability.

Transport Disputes
The pro- democracy protests in Hong- Kong instilled fear among the mass to go out. There had also been transportation irregularities that affected the job, education, school, College and other work processes. People feared the Hong Kong Airport lest there would be a violent attack. Many airlines were suspended and the global air system was on hold. The clash between the police and the mob had ceased and was on the way to recovery.

Conclusion
The following study had discussed the role of Hong Kong Airport in the pro-democracy protest. It discussed the power of democracy in Hong Kong. Several sources listed from different authors were also taken into consideration. The nature of the current scenario of the aviation industry of Hong Kong has also been discussed. Further, the ways of recovery of the daily life necessities from pro- democracy were discussed. It concluded with the discussion of the organizational structure of Hong Kong Airport and its significance in term of political alignment, sovereign power and democratic rights.

References
Airport-technology.com. 2021. Hong Kong International Airport (HKG/VHHH) - Airport Technology. [online] Available at: [Accessed 22 April 2021].

BBC News. 2021. Can Hong Kong's democracy movement survive the walkout?. [online] Available at: [Accessed 22 April 2021].

Hartley, K. and Jarvis, D.S., 2020. Policymaking in a low-trust state: Legitimacy, state capacity, and responses to COVID-19 in Hong Kong. Policy and Society, 39(3), pp.403-423.

Hong Kong International Airport. 2021. About Us - Hong Kong International Airport. [online] Available at: [Accessed 22 April 2021]. Impact on Economy 2021. [online] Available at: [Accessed 22 April 2021].

Repucci, S., 2020.A leaderless struggle for democracy. Highlights from Freedom House Annual Report on Political Rights and Civil Liberties: FREEDOM IN THE WORLD 2020.

South China Morning Post. 2021. Hong Kong’s aviation sector projected to be Asia’s worst hit. [online] Available at: [Accessed 22 April 2021].

South China Morning Post. 2021. Coronavirus is one crisis Hong Kong’s airport cannot survive unscathed. [online] Available at: [Accessed 22 April 2021].

Statista. 2021. Airline industry revenue worldwide 2019 | Statista. [online] Available at: [Accessed 22 April 2021].

Statista. 2021. Hong Kong: profit of International Airport by sector 2019 | Statista. [online] Aviation management assignmentAvailable at: [Accessed 22 April 2021].

The MoodieDavitt Report. 2021. Airport Authority Hong Kong’s annual retail & advertising revenues fall -17.6% - The MoodieDavitt Report. [online] Available at: [Accessed 22 April 2021].

Wan Chan, D.S. and Pun, N., 2020. Economic power of the politically powerless in the 2019 Hong Kong pro-democracy movement.Critical Asian Studies, 52(1), pp.33-43.