Air China

Overseas flight fees at mainland airports leap for domestic carriers

PUBLISHED : Wednesday, 06 February, 2013, 12:00am
UPDATED : Wednesday, 06 February, 2013, 4:43am

Mainland airlines, which used to pay 40 per cent less in airport charges than foreign carriers, are facing increased fees for international and regional routes.

The change will put them on a par with their international rivals, although they will still pay lower fees for domestic routes.

The increase in charges will be on two fronts: the landing and parking fees levied on airlines and the security and luggage charges on passengers.

The charges account for 6 per cent of the total revenue for Beijing Capital International Airport, which was likely to be the biggest winner from the change in charges, a Barclays report said yesterday.

The report said: "We expect airport charges to account for 10 to 15 per cent of airlines' operating cost in 2013 before the fee rise."

Air China and China Eastern Airlines were more vulnerable to the change as one-third of their revenue came from international passengers and cargo flights, it said.

But some analysts said the impact on mainland carriers would be limited as the airport development fee levied on airlines was likely to be waived after the rise in charges.

Shares in mainland carriers fell as much as 5 per cent yesterday, against a 2.3 per cent drop in Hang Seng Index. China Southern Airlines closed 4.3 per cent lower at HK$4.48, Air China lost 3.1 per cent to HK$6.59 and China Eastern Airlines shed 3.1 per cent to HK$3.49. Beijing Airport eased 0.15 per cent to HK$6.61.

The Civil Aviation Administration of China said flights to Hong Kong, Macau and international destinations operated by domestic carriers would face the same charge as foreign carriers from April, Beijing Airport said in a filing with the stock exchange.

Security charges on mainland passenger and cargo flights destined for a foreign city, Hong Kong or Macau will also be aligned with those of foreign carriers.

Mainland carriers carried 319 million passengers last year, an increase of 9.2 per cent from 2011, of which 295.7 million were domestic passengers.