HK scraps Air Mail Centre rebuild plan amid global economic challenges

Hong Kong has abandoned a multi-billion-dollar plan to rebuild its Air Mail Centre, citing a sharp decline in mail volumes and global economic uncertainties, with authorities now exploring cost-effective alternatives to modernize postal services.

In 2021, Hong Kong’s Legislative Council approved over HK$4.6 billion to reconstruct the Air Mail Centre, with completion initially slated for late 2027. 

However, the Commerce and Economic Development Bureau announced on October 17 that the project has been terminated due to significant changes in the global economic landscape and a substantial drop in airmail demand. 

The decision follows challenges stemming from the lingering effects of the COVID-19 pandemic, heightened geopolitical tensions, and new trade policies. 

Notably, the 2022 Russia-Ukraine conflict disrupted Hong Kong Post’s e-commerce mail services to Russia, while a U.S.-initiated tariff trade war in early 2025 eliminated tax exemptions for small parcels sent through postal channels, further impacting the city’s postal operations.

The volume of airmail processed at the center has plummeted from 36,900 tonnes in 2019-20 to just 12,000 tonnes in 2024-25, a decline of nearly 25,000 tonnes in six years. 

Revised projections estimate mail volumes will reach only 14,000 tonnes by 2027-28, climbing gradually to 60,000 tonnes by 2046-47—almost 70 percent lower than originally forecasted. 

Given these figures, rebuilding the Air Mail Centre to handle significantly reduced volumes was deemed financially unsustainable, prompting the government to prioritize prudent use of public resources.

Authorities are now developing alternative strategies to enhance Hong Kong Post’s efficiency and capacity to meet future demands. These include refurbishing the existing Air Mail Centre to improve its equipment and operations, ensuring it can handle projected mail volumes cost-effectively while optimizing e-commerce delivery services. 

Additionally, Hong Kong Post plans to deepen collaboration with China Post to share resources, align facilities, and refine postal policies. This partnership aims to strengthen cross-border mail services and support the development of the Greater Bay Area’s postal industry, aligning with regional goals. 

By leveraging Hong Kong’s status as an international aviation hub, the collaboration seeks to tap into emerging e-commerce markets and address evolving global postal needs.