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On the lookout for opportunities in 2002

by Stanley Hui
Mr. Stanley Hui Hon-Chung took over at the helm of Dragonair as Chief Executive Officer in February 1997. After a brief stint with the Hong Kong Government after graduation, Mr Hui joined Cathay Pacific Airways as a Management Trainee in early 1975. He spent a number of years in CX offices overseas in the 70s and 80s, returning to Hong Kong from Malaysia in 1986. He was appointed Manager International Affairs at CX head office, looking after traffic rights and representing in government consultations with various countries in regard to Air Services Agreements. It was at this time
that he got closely involved with the development of air services between Hong Kong and the Mainland, which led to his being seconded in 1990 to Dragonair as General Manager-Planning and International Affairs. In 1992-1994, he was the Swire Group's Chief Representative in Beijing, and in 1994 was appointed COO of Air Hong Kong, the Hong Kong based all-cargo airline.

It was certainly a year of surprises. The fall-off in industry demand as we entered 2001 was unexpected. Along with continuing high oil prices, it led to a tough operating environment for the first half of the year.

The slowdown continued into the summer and was then exacerbated by the tragic events of September 11 in the US, with the effects rippling into many areas and industries around the world. Airlines rushed to find ways to offset the additional cost as insurance premiums surged. But the year had a final surprise in store: an unexpected partial recovery in the fourth quarter, made more surprising as it followed the 911 terrorists attack on the US.

Looking back, it was a story of negative growth in most markets for 2001, as the economic slowdown began to bite--with some economies, including that of the US, going into recession--and the fallout from the bust in the technology industry continued.

But there were bright spots, and Dragonair was fortunate that they were in its major market. Demand in China continued to hold up well, as the economy headed towards an annual GDP growth of 7% for the year. These factors helped cushion Dragonair from the general economic climate, resulting in year-on-year growth in the amount of freight we carried.

In the fourth quarter of the year, we took delivery of our second purchased freighter and raised frequencies to Europe and the Middle East to five times a week. These were not only signs of the relative strength of our cargo business but a signal of our long-term commitment and optimism about the future.

Although difficult to predict after the surprises of 2001, it looks as if economies will begin picking up again after the second half of the year, which will obviously help boost the cargo industry.

For Dragonair, China's entry to the World Trade Organisation at the end of 2001 is another positive sign for the future. As the country embarks on the wider opening up its markets, we believe China will realise its potential as an economic powerhouse. China will be a magnet for investment and trade, leading to increased opportunities for cargo players with the expertise and knowledge of its markets.

In 2002, therefore, we will continue to look for opportunities that fit in with our long-term growth goals.