No joy for airlines seeking waivers, cuts in HK airport fees

No joy for airlines seeking waivers, cuts in HK airport fees

Cathay Pacific’s passenger numbers have fallen for the past three months. (South China Morning Post photo)
Cathay Pacific’s passenger numbers have fallen for the past three months. (South China Morning Post photo)

No news looks like bad news for airlines hoping for financial relief from the government or Hong Kong International Airport to cope with sharp declines in business after more than five months of unrest in the city.

It has been two months since a coalition of airlines wrote to the authorities pleading for help, including waivers of airport fees and charges.

"So far, we haven't heard back from the government," Ronald Lam Siu-por, Cathay Pacific's chief customer and commercial officer, told analysts at a closed-door meeting last Thursday.

Lam is chairman of the Board of Airline Representatives (BAR), which acts for more than 70 airlines flying to Hong Kong, and wrote the letter to the authorities saying many airlines had reduced or cut services as declining passenger numbers made many routes unprofitable.

On the group's wish list were adjustments to airport landing and parking fees, as well as lower rentals for offices and lounges.

But the Airport Authority Hong Kong (AAHK) has made clear that no relief measures are being planned for airlines.

Responding last Friday to queries, it indicated that it preferred finding ways to woo travellers to use Hong Kong's airport, including transit passengers who might go duty-free shopping there.

It said it collaborated with business partners in September and October to roll out two rounds of promotional activities, and more were in the pipeline for the coming months.

It did not provide details of the promotions, or the response to the first round.

In September alone, Hong Kong airport passenger traffic fell by 710,000 to 4.85 million, compared to 5.56 million in the same month last year. There were 802,000 fewer travellers using the airport in October, some 13% down compared with the same month last year.

There were 74.5 million travellers who used Hong Kong airport last year. This year's figure is likely to fall by 2 million, according to the airport operator's estimates.

A spokeswoman for the Transport and Housing Bureau indicated there are plans to woo travellers to Hong Kong, but did not give details of the initiatives.

Over the two months since Lam sent his letter, airline schedule data indicates that about 3 million seats to Hong Kong have been removed from sale.

According to flight schedule tracker Airline Route, around a dozen international carriers have cancelled or reduced services, including Air Canada, Emirates, United Airlines, All Nippon Airways, Singapore Airlines and Asiana Airlines.

On Friday, Airline Route said 10 mainland Chinese carriers have slashed services to Hong Kong since last month, including China Eastern which reduced Shanghai Pudong-Hong Kong flights from 56 to 32 a week until the end of March 2020.

The Cathay Pacific Group, the largest airline at Hong Kong International Airport, has seen passenger traffic fall for three consecutive months up to October.

Australia's Qantas last month blamed Hong Kong's unrest for denting its profits by HK$134.1 million.

Airport charges accounted for 27% of the Airport Authority's income in the 2018/19 financial year, its annual report showed.

Since 2016, landing charges have risen every year to help authorities pay for the HK$141.5 billion third runway expansion.

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