New Guangzhou airport opens

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Baiyun International airport is set to rival the nearby Hong Kong International Airport and local reports suggest it will offer competitive duty-free pricing

The new Guangzhou Baiyun International airport has received its operating licence from the General Administration of Civil Aviation of China and begins flights today after several delays. The Rmb19.8bn ($2.39bn) project began in August 2000 and the new airport will be one of China's three largest gateways as well as the new base for China Southern, the country's largest airline.

The old airport, which has been closed, operated 83 domestic and 25 international routes daily and in 2003 handled 142,000 take-offs and landings with a total of 15m passengers. The new passenger terminal structure is composed of one main terminal and two connected terminals and is expected  to handle more than 25m passengers annually until 2010.

After initial confusion over prospects for an open international tender for duty-free, it seems that state monopoly China Duty Free Group (CDFG) will operate the duty-free shop. A local newspaper in Shenzhen reported yesterday that after check-in "there is a tax-free cosmetics shop selling top brands such as Dior, Lancôme, Chanel, and a duty-free cigarette and wine shop".

It added that the airport authority said the prices of goods in the new airport will be lower than those in the old Baiyun airport. "Meanwhile, most of the goods in the new airport are famous brands, which are sold at the same price globally, so consumers will not be overcharged, authorities say."

The new airport poses the biggest threat yet to nearby Hong Kong International Airport. Hong Kong's Chinese language Economic Journal reported this week that air-ticket prices from the new airport will be much lower than Hong Kong, prompting concern that long-haul travellers to the Pearl River Delta region might eventually opt for landing in Guangzhou instead of Hong Kong.

The new airport is in the heart of the region given first access to the Solo Travel Scheme, which has allowed 100m Chinese to leave the country outside a tour group since July 1 2003. The scheme has attracted 2.6m mainland Chinese to Hong Kong already, accounting for 28% of the total number of mainlanders travelling to the city during the period. Each tourist spent an average of HK$6,100 ($782) per trip.