South China Morning Post, an established Hong Kong English-language news agency, has reported that the Board of Airlines Representative (BAR) of Hong Kong has asked the Hong Kong government to provide waivers for airport fees.

Amidst the prolonged protests in Hong Kong, this coalition of airlines, involving more than 70 airlines operating in and out of Hong Kong, is seeking waivers for airport landing and parking fees; as well as rates cut in other airport operating costs such as rentals for offices and lounges.

Passenger Traffic Slump In August

Hong Kong recorded the biggest monthly drop in August since June 2006 (financial crisis period) – down by 12.4% or at least 850,000 fewer travellers, mainly from China and Southeast Asia.

According to BAR Chairman, Ronald Lam Siu-por- an executive from Cathay Pacific, the decline in earnings has made Hong Kong flights no longer commercially viable. He is expecting further passenger traffic to decline in the remaining months of this year.

BAR, in a letter to the government, also further added that the aviation industry supported 330,000 jobs in Hong Kong and contributed 10.2 per cent of the city’s GDP.

Airport Cost – A Major Cost Component For The Airlines

The above chart (expressed in Hong Kong Dollars) shows the airport charges of key Asian airports gathered by RDC Aviation, with Tokyo showing the highest landing cost followed by Hong Kong. The cost of landing a B777-300ER cost an airline HK$110,732 ($14,122). This cost comprised of landing fee, parking fee and government and passenger related charges.

According to Cathay Pacific’s 2018 annual report, landing fees, parking fees and air traffic control fees account for 16% of Cathay Pacific’s operating costs.

Although the Hong Kong government has provided financial aid to the airlines twice between 2000 and 2009, the scale was not as big as what the airlines are requesting this time round.

H/T: South China Morning Post