Hong Kong Airport hikes fees on top of new passenger levy amid stalled traffic

Passengers from HK may end up paying higher airfares on top of the planned additional levy

PUBLISHED : Tuesday, 14 June, 2016, 10:08pm
UPDATED : Wednesday, 15 June, 2016, 2:09pm

Aircraft landing and parking fees in Hong Kong will go up from September as the city’s Airport Authority seeks more funding options for its proposed Third Runway. The double-digit hike is expected to worsen passenger traffic at the Hong Kong International Airport as passengers already face an extra levy of up to HK$180 per flight from August.

The government said on its website on Tuesday afternoon that it would gazette the new schedule of charges proposed by the Airport Authority on Friday and the same would be effective from September 1. The Airport Authority proposes to roughly restore aircraft landing and parking charges to the level before 2000, according to the notice. The fees were reduced by 15 per cent due to the then Asian financial crisis.

A Transport and Housing Bureau spokesman quoted in the notice said the fee hike is aimed at increasing the proportion of aeronautical revenue of the Airport Authority and to help fund the Third Runway.

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The parking fees would rise immediately, while the landing fee would rise gradually over three years. The spokesman said none of the three trade organisations consulted – the International Air Transport Association, the Board of Airline Representatives Hong Kong and the Hong Kong Business Aviation Centre – raised any objections.

Sources said the Airport Authority was seeking to raise the fee by up to 20 per cent.

Currently the landing charge for aircraft heavier than 20 tonnes is HK$2,210 plus HK$63 for each additional tonne, according to government documents, meaning the biggest Airbus A380 double-decker costs around HK$37,175 to touch down.

Passengers are likely going to end up paying higher airfares as airlines would seek to pass on the burden. They are already going to be charged a new airport construction fee from August 1 onwards on top of the departure tax of HK$120 as part of the scheme to finance the Third Runway.

Hong Kong International Airport reported a mere 0.2 per cent growth in passenger flight movement in April compared with the same month last year. Growth in passenger numbers slowed further from 4.8 per cent in March to 1.4 per cent in April.

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A local airline executive who declined to be named said, “Increased charges would affect traffic volume in the short term and hit airline profits. Passengers make choices based on the total price, some transit passengers may choose to reroute via other hubs. Airlines may be forced to swallow the difference in order to compete.”

Traffic at Hong Kong International Airport has stalled in recent months because of declining tourist interest in Hong Kong and because the airport simply has no room to add more flights, said industry sources.

According to the Hong Kong Tourism Board, visitor numbers dropped 2.1 per cent in April, with passenger flows from the mainland dropping by as much as 4 per cent.

The announcement also said that airport charges represent roughly 4 per cent of global airlines’ operating costs, and the fee increase therefore “is expected to have an immaterial impact on the operation of airlines.” Air bridge and terminal building charges will remain unchanged, it said.