Can Regional Runways Fill Shanghai’s Need for a Third Airport?

Yicai Global 第一财经
5 min readMar 28, 2017


Shanghai has a population of more than 20 million and has become the fifth city in the world capable of handling more than 100 million annual air passengers, after London, New York, Tokyo and Atlanta. The city has two airports in Pudong and Hongqiao. Both London and New York have more than two airports. Does Shanghai need to build a third airport if it is to further enhance its position as a global transportation hub?

It took Shanghai 20 years to increase the air passenger throughput from 10 million to 100 million. In 1995, it only had one airport, one terminal and one runway, and the passenger throughput topped 10 million for the first time in history. In 1999, Shanghai became the first city with two international airports in China following the launch of Pudong International Airport (first phase). In 2010, the launch of the second runway and terminal №2 at Hongqiao airport marked the birth of Asia’s largest integrated transport hub integrating civil aviation, high-speed rail, motorway and mass rail transit services. Today, the two airports in Shanghai have become world-class hubs with four terminals, five cargo sections and six runways.

The latest financial data of Shanghai International Airport Co. [SHG:600009], the operator of Shanghai’s both airports, shows its net profit is projected to be CNY2.792 billion (USD404 billion) in 2016, up 10.28 percent from the year earlier. The company performed better than expected and its earnings have increased steadily, it stated.

In terms of market positioning, the Hongqiao airport will continue to establish itself as a ‘boutique’ airport. Boasting greater development potential, the Pudong airport, on the other hand, will further scale up its operations as an international hub airport.

Given the high density airports in the Yangtze River Delta, local airports must collaborate with each other to maximize profitability in the region. The feasibility of building a third airport in Shanghai depends on whether the two existing airports can meet future market demand.

Discussions about if one more airport is needed in Shanghai are based on the premise that the existing ones are not enough to cope with the demand for air travel at a certain point in the future. It is impossible to build any more runways in Hongqiao airport. A second terminal area will be built in Pudong airport as the airport authority is expanding it by building the world’s largest satellite terminal complex to further improve capacity and services, which will boost the punctuality rate and ensure faster transfer services, said Li Derun, president of the airport authority, last December.

The H-shaped new satellite terminals at the Pudong airport, S1 and S2, will connect with the existing terminals 1 and 2 via underground subways. The terminal, which will have 83 departure gates and 120 new parking stands for airplanes, is scheduled to be completed by 2019. “The city’s two airports will be able to handle 120 million passengers and 5.2 million tons of cargo annually by 2020,” Li said.

This means, in the next five to 10 years, the total capacity in Shanghai will be increased primarily by enhancing air traffic control and airspace allocation techniques. Airlines can also adapt to market demand by replacing existing aircrafts with bigger types.

At present, peak-time rush-hour traffic at Pudong airport has already reached 76 departures and arrivals per hour, but many smaller cities in China want to have flights to Shanghai. However, their applications have been turned down by the national Civil Aviation Administration of China (CAAC) on the ground that more flights may affect normal operations of existing ones at Shanghai’s airports. Therefore, the third airport should be used mainly for connecting Shanghai (Yangtze River Delta) with other Chinese cities.

Where Should the Third Airport be Built?

Of all the airports in nearby cities, Ningbo, Wuxi, Nantong and Jiaxing airports are suitable candidates to function as Shanghai’s third airport.

Of these, Ningbo airport will launch a new terminal (second terminal) in 2019, but it is 300 kilometers away from Shanghai, with the Hangzhou Bay standing between the two cities. The proposed Shanghai-Ningbo Cross-Sea Channel may eliminate the obstacle, but there are still uncertainties surrounding the project, meaning that the Ningbo airport cannot be a viable option for substituting Shanghai’s third airport during the 13th “Five-Year Plan” period (2016–2020).

Sunan Shuofang airport in Wuxi had a throughput of 5.55 million passengers in 2016, and currently has flights to 52 cities. However, it is designed for civil and military use, and thus there‘re’ some limitations on business development. Furthermore, the airport lacks rail transit services, which limits the airport’s market reach in the region.

Nantong is some 150 kilometers away from Shanghai. The local government plans to make the Nantong airport “an important component of the multi-airport international airline hub network of Shanghai.” A high-speed rail is being built to connect the two cities, which will cut down the travel time between them to less than one hour after the railway is launched in late December 2021. On the flip side though, the Nantong airport is slightly far away from the railway station, making the high-speed rail less relevant for any possible justification. On the other hand, this new railway connect Pudong airport.

The airport in Jiaxing is still under construction. It is the nearest airport from Hongqiao. The distance between the two airports is 80 kilometers, or 100 kilometers by car, and it only takes 27 minutes from Jiaxing to Hongqiao by the high-speed rail. The ticket is about RMB38. Once completed, the Jiaxing airport will be able to cover certain parts of Shanghai using the existing high-speed rail network. The main downside of it as a possible candidate for Shanghai’s third airport is that it is also a semi-civil and semi-military facility, and it is unclear when the airport will start operation.

The Yangtze River Delta is economically developed and wealthier than most other regions in China. The feasibility of building a third airport in Shanghai and its market positioning is open to debate. All airports in the neighboring cities will see different development opportunities as the regional transport market continues to grow. To the extent to which they can seize those opportunities, they will be able to offer sustainable alternatives to function as Shanghai’s third airport.

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