Hong Kong airport landing charges to soar by up to 27 per cent

Higher fares likely despite falling traffic numbers as more details out on how Airport Authority plans to fund $141.5 billion Third Runway

PUBLISHED : Friday, 17 June, 2016, 9:16pm
UPDATED : Saturday, 18 June, 2016, 12:32am

Aircraft landing at Hong Kong International Airport could be paying up to 27 per cent more in landing fees within three years, after a new charging scheme aimed at funding the Third Runway comes into force from September.

According to a new scheme of charges gazetted on Friday, the rise in landing fees — calculated using a formula based on aircraft weight — will be spread over three years from September 1.

A rise of around 17 per cent in parking fees will take immediate effect from then.

The fee rise is part of the Airport Authority’s plan to fund the HK$141.5 billion Third Runway without government funding.

Departing passengers will also start paying an airport construction fee of between HK$70 and HK$180 per flight from August 1, which is expected to provide HK$26 billion of the funds needed.

A narrow-bodied Airbus A320, which now pays around HK$5,864 every time it touches down, would pay HK$6,686 from September, HK$7,176 from next September, and HK$7,442 from September 2018, according to the new scheme.

The A380 double-decker, the world’s largest airliner with a maximum take-off weight of 575 tonnes, would be charged HK$44,220 to land in Hong Kong after September 2018, up from HK$37,175 now.

Analysts say the added passenger levy and aircraft charges, which airlines are expected to shift to their customers, could put further pressure on slowing passenger traffic growth at Hong Kong International Airport.

The fee rise would inevitably erode airline profit. But the Third Runway is essential for Hong Kong.
Li Dianchun, commercial director at Hong Kong Airlines

Passenger throughput at the airport grew just 1.2 per cent in April, while Cathay Pacific Airways and Dragonair have already reported traffic drops for two consecutive months in April and May.

Total visitor number to the city have declined 8.8 per cent so far this year to April, according to the latest statistics from the Hong Kong Tourism Board.

Li Dianchun, commercial director at Hong Kong Airlines, said: “The fee rise would inevitably erode airline profit.

“But the Third Runway is essential for Hong Kong.”

He said the rise in landing and parking fees would not hurt traffic as much as the passenger levy would, and that there is not much room for airlines to transfer the cost to customers.

“At the end of the day, airlines can only command prices allowed by the market. In a weak market environment like ours, there is no need to worry about a price hike.”

A spokesman for the Transport and Housing Bureau denied the fee increases would hurt Hong Kong’s competitiveness as a transportation hub, as it’s a small proportion of airline’s operating costs.

“The 3RS project will enable HKIA to cater for its long-term air traffic demand for maintaining Hong Kong’s competitiveness as a global and regional aviation hub,” he said.

The airport’s competitiveness, he added, is influenced by a myriad of factors, including its network and connectivity, passenger service and operational efficiency.