A senior representative of Hong Kong-based airlines has criticised plans to sharply raise charges at the new Chek Lap Kok airport, saying the move may force carriers to relocate to other regional hubs.
Airport Authority official Chern Heed is said to have indicated two weeks ago that a range of fees, including landing charges, would be doubled from the present levels at Kai Tak. Airline executives have voiced concerns about the move but have been reluctant to publicly criticise it.
Deputy chairman of the Board of Airline Representatives Gilbert Chow, who is also in charge of airline industry negotiations on the new airport, said such a move was 'a very ominous sign for local airlines'.
He said the move could seriously affect the bottom lines of many carriers, particularly in light of sharply declining passenger yields and margins on many routes out of Asian hubs.
Return on investment for Hong Kong-based operators stood at between 2 per cent and 9 per cent, which could be eroded very quickly by a rise in airport charges, he said.
Mr Chow said the increased costs could not be fully absorbed by the carriers, adding it was likely some or all of this increase would be passed on to consumers in higher air fares.
He said other regional hubs such as Macau, Singapore, Bangkok, Kuala Lumpur, Shenzhen, Zhuhai and Guangzhou were possible alternatives if Chek Lap Kok charges were too high.