HACTL – Coronavirus Response

Wilson Kwong, Chief Executive, HACTL

It’s difficult to talk about our current situation without resorting to over-used expressions such as “unprecedented”, “uncharted waters”, “industry-changing” and “crisis”. Because COVID-19 is all of those things, and much more. But we all know that. So the important questions now are: how do we respond? And what does the future hold?

Being located in Hong Kong, Hactl was relatively close to the city where this nightmare pandemic was first identified. This meant we were among the first to witness its fast spread, and to realise that over-reaction was impossible, and delay in response was unacceptable.

So, within hours, we had started implementing a raft of measures to protect our staff, and visitors to our giant terminal. These included temperature scanning of all visitors and staff at entrances; implementing home working for non-frontline workers; using video conference for internal and external meetings; banning business travel; quarantining staff who had been to the mainland; restricting dine-in services in the canteen; closing staff recreational facilities; and issuing face masks and sanitiser to all Hactl staff. We also rearranged duty rosters and rolled out work-from-home policy to minimise the number of workers on the premises at any one time.

Our motives were both in the cause of staff welfare, and also business continuity. Hactl is unusual among handlers in the vast volumes it processes daily, but also inasmuch as its operations are mission-critical to the efficient operation of the airport as a whole. While this subsequently became less important, with the eventual decimation of passenger flights, it certainly was business as usual in the early days of the virus.

The measures proved effective. We have, of course, had a number of staff self-isolating where they have been to higher-risk areas – but the numbers have been limited, and have had no impact on our ability to maintain full service. We continue with our initial measures, and are adding to them even now, in a constant effort to safeguard our staff and our business.

On a business level, the early days were gloomy: the Chinese New Year holidays were extended, and several areas of China went into lockdown. Ocean carriers predicted a collapse in demand, so blanked sailings and kept their vessels in other parts of the world. In our own industry, every new day brought news of more and more customer carriers cutting their passenger frequencies through Hong Kong.

So, when China’s factories eventually started to return to work, it was quickly clear that there was a shortage of both ocean and belly-hold airfreight capacity. Forwarders and logistics providers needed to restore their customers’ supply chains as quickly as possible, and did it in the only way possible – by chartering freighters. So March saw a positive growth in freighter operations. Our overall volumes remained down on 2019, but this burst of maindeck operations certainly brought welcome relief. Our SuperLink China Direct RFS system has also been running well above normal levels, as it played its part in re-connecting mainland China with the world via Hong Kong.

But, what of the future? While China may now be showing early signs of recovery, other parts of the world are only now going into full lockdown: with workers forced to stay at home, concerns over their future employment, and consumers cutting back on non-essential spending (bad news for an air cargo industry whose mainstay traffic is luxury, discretionary, big-ticket commodities).

It’s therefore far too early to attempt to make any precise predictions about how this all ends. It seems likely we will be looking at a new normal in many areas of our lives, and a greatly-changed aviation sector. Amid such huge change and uncertainty, and all the discomfort that brings, I find it helpful to remind myself of a few key truths about our business sector:

– Airfreight has always been an essential pipeline for goods that are too urgent, too fragile or too valuable for other modes of transportation. Our markets may be diminished for some time, but they will never disappear, and will eventually return to higher volumes. In the meantime, the pandemic will continue to drive demand for transportation of medical supplies and PPE which will mostly use airfreight

– Airfreight has long been under-valued. Its biggest enemy has been the overcapacity that came with passenger travel booms, and the deployment of ever-larger aircraft with large belly holds. If, as a result of this crisis in aviation we see a rationalisation in passenger travel, services and capacity, the current higher cargo rates we are seeing may persist – restoring the importance of cargo to passenger airlines, and facilitating renewed investment in cargo infrastructure

– Its causes may be different, but this is just another recession. And all recessions eventually come to an end as human nature fights back

– Staying positive has never been more difficult, and never more important. With so many challenges facing us all, none of us needs to become our own worst enemy, by creating imaginary obstacles! Previous aviation recessions have clearly shown how the worst of problems still creates opportunities. While some carriers and other businesses retrenched, others stepped up to grab increased market share, expanding their fleets and services. While nobody would downplay the seriousness of the current crisis, the businesses that will emerge most successfully are those who are already planning for the post-pandemic world, and identifying opportunities. The key is staying positive.

So, Hactl continues to invest even as I speak. We continue to re-examine every aspect of what we do, in search of better ways of working, and better ways of serving our customers. And, although we are taking sensible steps to control costs and protect our business, we also continue to think about potential new markets, and ways to leverage and monetise our skills and experience.

We meanwhile remain eternally grateful to our customers for their loyalty throughout this period, and to our own staff for the enormous dedication they show every day. We see past this horrendous situation, and hope that we will continue to work with our many friends in the air cargo industry towards a brighter future and unforeseen new opportunities.