Kevin Sinclair in his article on Monday, 'Airport charges a threat to tourism', argued one side of the case in the complex issue of airport charges - that of the airlines.
If anyone could prove to me that reducing airport charges by, say, 30 per cent would result in a commensurate increase in the number of arriving passengers, I would cut the charges today. We are in the business of running an airport, and more passengers means more business for all, not just the airlines.
Unfortunately, linking airport charges with passenger demand is just one of several fallacies that keep surfacing in this debate. Passengers fly to destinations because of their need or desire to do so. They do not think: 'Gosh, I'd better not fly to Heathrow or Tokyo or Hong Kong because the airport landing fees are a bit high.' Contrary to claims by the airlines, routes are not chosen according to airport charges. Airlines fly to markets, based on passenger demand.
So what do airlines look for at airports? When the British Airports Authority, one of the world's largest airport operators, surveyed 30 leading international airlines, they found the following criteria, in descending order of importance, were some of their most pressing concerns: passenger demand; profitability; ability to obtain take-off slots; range of airlines; quality of ground handling; discount offers; handling charges; landing fees; efficiency of baggage handling; security checks; check-in facilities; ease and speed of transfer; runway delays; passenger comfort; congestion level; first/business class lounges.
Landing fees are an average concern. It could be argued that costs affect yield, and that airport charges are a cost. But they are not nearly as significant as Mr Sinclair and others believe. According to the International Civil Aviation Organisation, airport charges constitute only 4.3 per cent of airlines' operating costs. Compare this with ticketing, sales and promotions (15.7 per cent) and fuel (11.2 per cent).
On a given flight, the airport charges at Chek Lap Kok make up a little over two per cent (half of 4.3 per cent) of the cost. So, even if we halved our airport charges, it would only mean a one per cent saving for each airline, but a 50 per cent reduction in our revenue. It is doubtful that a one per cent saving would sway an airline's decision.