Taiwan hopes its central Asia-Pacific location will make it a top air hub
Singapore, Bangkok and Hong Kong have traditionally been Asia's most prominent hubs, and now Taipei is striving to compete more fiercely, although making inroads will be tough.
“Taiwan's geographic location is such that it has the shortest distance to all major cities in the Asia-Pacific region, making Taiwan's Taoyuan International Airport an important hub in the region,” said thelast month in announcing the new membership of Taiwan's EVA Air.
The island's geographic advantage must be part of a sensible strategy, however. Having the shortest distance to all major cities in the region is useful to businesses in Taiwan, but it does not necessarily benefit business travelers from outside the region who need a place to transit.
CEO Christoph Franz says it is understandable that Taiwan is promoting itself as an Asia-Pacific air hub, but he notes that “Taiwan is quite far west, so it is not ideally located for people coming from Europe. Singapore's advantage is that it is close to Indonesia and Australia. Hong Kong is also better located than Taiwan.”
A lot of traffic from Taiwan passes through Hong Kong, which makesa formidable competitor for Taiwanese carriers. Samuel Lin, president of Taipei Taoyuan International Airport Corp., says Cathay is the third-largest airline at the airport.
Despite the recent inclusion of EVA Air, only seven of Star's 28 members operate to Taipei:, Shenzhen Airlines, , , , International and (SIA). Instead, Star carriers tend to connect with EVA in Hong Kong and Bangkok. Many of EVA's flights to Europe are routed via Bangkok for historical reasons—political relations between China and Taiwan only started to improve in 2008 when Taiwan's new Kuomintang Party government came to power. The Kuomintang government adheres to the “One China” policy. Prior to that, Taiwanese carriers were barred from Chinese airspace, making it necessary to reach destinations west of Taipei by flying over Thailand.
Lin says TransAsia has virtually no transit traffic through Taoyuan Airport but that ofand EVA Air averages 27% each. The airport's overall transit-traffic average is 10%, which the airport is keen to increase. One bonus in this area is the transit traffic it receives from Singapore-based Jetstar Asia and Scoot, which use fifth-freedom rights to transit through Taipei to destinations in Japan.
Star Alliance CEO Mark Schwab, says the transit traffic EVA routes though Taipei mostly consists of passengers from Southeast Asia travelling to North America. He says the airport operator has been working to make Taoyuan more attractive for transferring passengers and assist airlines to reduce connection times.
A complication to transfers at Taoyuan is that many airlines in the same alliance are located in different terminals. The airport is working on plans to build a third, larger terminal to which EVA and China Airlines are lobbying to move along with their respective alliance partners. EVA says it “has a strong will to migrate our ground service from Terminal 2 to Terminal 3. Terminal 2 is not enough. Construction of Terminal 3 is going to be become an increasingly important and urgent issue in the future.”
Lin says the new terminal will be designed to accommodate alliances and cater to transit traffic, whereas the first two terminals were originally designed for point-to-point traffic. He says Phase 1 of the new terminal, scheduled to open in 2018, will be able to accommodate 15 million passengers a year, and that the terminal capacity will increase to 43 million passengers when a new concourse and more parking bays are added in the second phase.
Terminal 3's preliminary design is due to be completed this year, and by early next year the airport authority plans to conduct an international competition for the detailed design. “We hope that by the end of 2014 or no later than 2015's first quarter, we will begin construction,” Lin says.
Taiwan would be well-located as a transit point for passengers from mainland Chinese planning to travel to the U.S., but the Chinese authorities still prohibit their citizens from transiting through Taipei, even though Taiwanese authorities allow Taiwanese nationals to transit through mainland China with no restrictions.has been particularly aggressive in its pricing in an effort to attract Taiwanese to transfer at Guangzhou Baiyun International Airport on their way to Europe.
EVA President Austin Cheng says he hopes that Chinese and Taiwanese authorities can reach an agreement whereby mainland Chinese will be permitted to transit easily through Taipei, which would give a huge boost to Taoyuan's ambition to be a major international air hub.
|Region||More than 1 Million Passengers (%)||100,000-1 Million Passengers (%)||10,000-100,000 Passengers (%)||Fewer than 10,000 Passengers (%)|
|Source: AmadeusThe relatively small number of high-density routes in Europe and North America indicates there is a particular need for hubs. Asia is less dependent on feeder services because of the many large local markets.|