Insight: Thank you for taking the time to talk with me today. I know you are very busy now preparing for the opening of the new Airport terminal and our readers and we very much appreciate your agreeing to talk with www.business-in-asia.com First, the Airport terminal is obviously much larger than the old terminal. Exactly how large is the new terminal and how does it compare to the old terminal and to other airport terminals in China?

Mr. Fang: Essentially, to date, there have been three stages to the development of Beijing Capital International Airport. The original site for the airport was chosen in 1954 and following construction opened as the capital’s first airport in December 1957. The original airport which served Beijing’s requirements during the early years had a 10,000 square meter terminal and a 2,500 meter runway with approximately 84,000 sq. meters of apron space. This was the first period. By the 1970s, it became obvious that the airport needed to grow to fully serve the nation. In January 1980, a 600,000 sq. meter new terminal building was built. This new terminal was designed to serve 60 flights daily and 1500 passengers at peak hours. Work was also done to improve the runways, support facility and air traffic control systems. This terminal served the capital and the nation well over the next nearly two decades. The decade from the founding of the Beijing Capital International Airport Administration till 1997 saw the greatest growth to date in airport operations – passenger traffic rose from 4.65 million to over 16.91 million passengers. Mail and Air freight growth rocketed to just under 500,000 tons a year by the end of 1997. By this time, however, it was extremely apparent to all that economic growth spurred by China’s modernization demanded a new airport. Therefore in 1992-3, planning started on a new airport and in 1995 construction work actually commenced. The new terminal which is scheduled to officially open on October 1 of this year will include a 336,000 sq. meter passenger terminal and 16 other supporting facilities including a 464,000 sq. meter terminal apron, multi-story car park, a cargo station and other facilities. The opening of the new terminal and the renovation of the old terminal will commence the third state of development for Beijing’s Capital International Airport, the nations largest airport.

Insight: How long has it been since your started construction and what exactly is the total cost of the new facility? Did the government provide all of these funds or did some of the funds come from the departure tax or other revenue sources?

Mr. Fang: Work on the 17 new airport facilities, which include the new passenger terminal, which is the most noticeable improvement, started on October 16, 1995. As I noted, we are already testing the new terminal by accommodating incoming and departing flights on a test basis although the airport will officially open on October 1 in recognition of the 50^th anniversary of independence of the People’s Republic of China. This means that in less than four years; we have completed all of these projects, an immense improvement for Beijing and for China. Total cost of all of the construction is just over one Billion U.S. dollars (8 Billion RMB). This is an immense amount in a developing country such as China although relatively modest compared to what airport upgrades cost internationally. Less than one-third of the required funding came from passenger fees. The remainder was financed by the State.

Insight: When exactly will the new terminal open? Will the new terminal open all at one time or will services be gradually phased in?

Mr. Fang: The new passenger terminal is complete at this time and we have had two tests of the facilities using incoming or outgoing flights. The official opening of the new airport will be October 1. Our plan is to gradually phase in services in the new facility. All services will not necessarily be available immediately but will be offered as systems prove themselves and in a manner convenient to passengers and provision of all services.

Insight: Because of the delays and complications experienced in the opening of the Hong Kong and Malaysian airports, many Asian travelers are skeptical when they hear about firm dates for opening a major airport. Did you study the openings of the Hong Kong and Kuala Lumpur airports and did you learn lessons from the challenges they experienced that you applied here in Beijing? Also, could you give us an example of such a change?

Mr. Fang: We have been examining and learning from the openings of new airports long before last year and by using not only the Asian experience with this but also by looking to airport openings in Europe and in the Americas. Airport officials and myself visited Denver in the U.S. to observe the opening there and have constantly studied reports and management studies on new airport projects. We have attempted to apply the lessons learned from these past terminal openings to help assure the public of the smoothest transition here in Beijing. For example, a large part of the problem in the Hong Kong airport was with the computer system. We studied the problems experienced there and invited Hong Kong officials to visit here to allow us to learn from their experience. An additional lesson we drew from the opening of the Hong Kong Airport was not to open too soon and to fully practice with all systems. As a result, even though we could conceivably open now, we have used the time to exercise the systems to make sure that any problems are resolved before the public becomes inconvenienced. I meet daily with immigration, customs, baggage handling, food service and others ensuring that each system is tested and that all parties are working together to resolve any remaining issues. Baggage transfer systems also have been shown to have caused a large portion of the problems in Hong Kong and Kuala Lumpur, we have therefore spent much time testing our new baggage systems including live tests with flights so as to ensure that they operate as expected when the new facility is opened.

Insight: Is. Beijing, the country’s largest airport? How does it compare to other airports both internationally and in China? 

Mr. Fang: Beijing is the largest airport in China in terms of passengers. In terms of world airports, Beijing Capital International Airport is the only Chinese airport that is in the top 50 airports in terms of passenger loads. In 1997, Beijing handled 141,185 airplane movements, just under 17 million passengers and 458,000 tones of airfreight. With the addition of the new passenger terminal and renovation of the old facility, we will be able to sustain future growth that would more than double the 1997 figure and still achieve first rate service to all of our passengers and airlines.

Insight: On an average day, how many departures and arrivals do you usually expect at Beijing Capital International Airport? With the opening of the new airport, will there be any increase in the number of flights utilizing Beijing Capital International Airport?

Mr. Fang: In 1997, Beijing Capital International Airport served 16,907,054 passengers, among which 11,629,400 were on domestic routes, 5,278,554 were on international routes and routes to and from Hong Kong and Macau. On average, 46,323 passengers arrive or depart the airport every day on just under 400 flights to or from about 140 plus destinations at home and abroad. Over two-thirds of our passengers are domestic and just over a quarter are international with the difference being travelers to Hong Kong and Macau. Because of the drop in passenger loads experienced by most airlines in the Asia Pacific region as a result of the Asian Financial Crisis, passenger arrivals and departures in 1998 were not as great as had been predicted. We have however seen a recovery in passenger loads as the Asian economies have started to return to growth. We anticipate that 1999 and 2000 passenger arrivals and departures will exceed our 1997 figures and that passenger loads will nearly double over the next 5-7 years.

Insight: You mentioned renovation plans for the current terminal. What exactly are the plans for the current terminal?

Mr. Fang: Our plan is to gradually renovate the current terminal and to use is for shorter-range flights. Longer-range flights would use the new terminal.

Insight: With the opening of the new airport, obviously Beijing will now have a much larger and more modern facility. In addition to more space for passengers, what new services and facilities will be available at the new airport?

Mr. Fang: As I mentioned earlier, the new passenger terminal is just one of the 17 improvements completed over the past four years. The new facility will have more apron space, a modern automated baggage handling system which uses the best available luggage handling systems, some of them from the U.S. and European countries, plus many other advances. The biggest changes may, however, be less visible. First, the new airport will have more controls over doors and access to improve passenger security. Further in a very significant change, we will be updating and modernizing our management systems. More work will be done under contract and not directly by Airport staff. Concession services, cleaning, and many other services will be awarded of the basis on open and competitive bidding so as to reduce cost, limit overhead and improve services to passengers. In essence, Beijing Capital International Airport will operate very similarly in terms of management to other major international airports.

Insight: Mr. Fang, again we thank you for the time you have taken to talk with us today. We wish you the best success in the opening of the new terminal and thank you and the many people at the Beijing Capital International Airport who will be helping make travel smoother and more enjoyable for the people of China but also for many of our readers as well.