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exported and re-exported by air, totalled 694 000 tonnes as compared with 611 000 tonnes in 1987. The value of airborne goods totalled $208,786 million. Viewed against Hong Kong's total trade in imports, exports and re-exports, imports by air made up about 20 per cent, exports by air about 28 per cent and re-exports by air about 16 per cent in value terms. The United States was the major market for exports and re-exports by air, accounting for 44 per cent and 21 per cent respectively.

An increase of 18 per cent in aircraft movements was recorded, bringing the annual total to 87 000. More than 80 per cent of the aircraft calling at Hong Kong were wide-bodied.

The

year saw the introduction of scheduled air services to Hong Kong by Lauda Air. This raised the number of scheduled airlines serving Hong Kong to 38, which together operated about 720 direct round trip services weekly between Hong Kong and some 70 other cities. In addition, an average of 210 non-scheduled flights were operated each week. Throughout 1988, Cathay Pacific Airways continued to increase the frequency and capacity of its services to major cities. To cope with this increase, it acquired four L1011 and one B747-300, thereby increasing the number of such aircraft to 14 and six respectively. Cathay Pacific Airways also operates eight B747-200 and two B747 freighters, giving a fleet of 30 aircraft at the end of 1988.

Hong Kong Dragon Airlines limited commenced scheduled services to Kagoshima in May and Utapao in July. The airline continued to operate scheduled services to Phuket and non-scheduled services to a number of cities in Asia, mostly in China with its three B737 aircraft. In October the Company acquired its fourth aircraft by lease from a British operator. The scheduled services to Chiangmai were suspended in July.

Transcorp Airways (Hong Kong) Limited ceased trading on October 25.

AHK Air Hong Kong obtained an Air Operator's Certificate from the Civil Aviation Department in January and began non-scheduled cargo services from Hong Kong to Kathmandu and London with a B707 freighter in February. During the year, the airline operated non-scheduled cargo services between Hong Kong and a number of points world wide, the major points being Dhaka, Bangkok, Singapore and Sydney.

The Hong Kong/Switzerland Air Services Agreement, the second in a series of air services agreements which Hong Kong aims to conclude with other governments in the coming years, was signed in Hong Kong on January 26. The third agreement, the Hong Kong/Canada Air Services Agreement, was signed in Hong Kong on June 24 and entered into force. These agreements have been specifically designed with the relevant provisions of the Sino-British Joint Declaration on the future of Hong Kong in mind.

Following the implementation of the second stage of the relevant provisions of the Civil Aviation (Aircraft Noise) Ordinance on November 1, all subsonic jet aircraft that do not meet international noise standards are now prohibited from landing and taking off in Hong Kong.

At Hong Kong International Airport, progress was made on a number of on-going projects, and new works programmes were launched.

The Stage V extension of the Passenger Terminal Building which increased the capacity of the Passenger Terminal by almost half, was completed in December, in time to cope with the phenomenal 20 per cent growth in passenger throughput. The design capacity of the Stage IV terminal was 12 million per annum, already exceeded in 1987.

The 22-month-long project to provide paved shoulders along the full length of the runway to overcome problems of erosion of the grass areas adjacent to the runway by jet efflux, was completed at the end of March, enabling normal hours of runway operation to be resumed.

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