As the anti-government protests in the territory continue, businesses are struggling to keep up with the falling demand and economic difficulties. On August 15, 2019, the Hong Kong government announced preparing for the reasonably assumed “economic headwinds” and are issuing a package of “measures to aid enterprises”. However, the package does not include airlines that are flying to Hong Kong.
The combination of falling passenger numbers flying to Hong Kong and expensive airport fees continue to weigh down on airlines, so the Board of Airline Representatives (BAR) of Hong Kong has asked to suspend various airport expenses, including landing and parking fees, according to a letter seen by the South China Morning Post. The BAR represents over 70 airlines that land and depart from the autonomous region.
Ronald Lam Siu-por, the chairman of the BAR, has indicated that due to the falling passenger demand, flying to Hong Kong is no longer commercially viable. “In view of the situation, the BAR urges the Hong Kong government to consider issuing short-term relief measures” to help carriers navigate the turbulent financial conditions.
Hong Kong International Airport (HKG) saw 5.9 million passengers crossing its terminals in August 2019, a drop of 12.4% compared to August 2018, when 6.8 million travelers embarked on or finished their journey in HKG, according to the airport’s official statistics. Freighter tonnage has seen an even bigger drop-off, as the airport handled 15.9% fewer tons of cargo in August 2019 compared to the same period in 2018 – 129 tons versus 154 tons, respectively.
Cathay Pacific Group, which is based in the region, has been heavily affected by the protests. Not only Cathay’s passenger numbers have fallen heavily and the airline had to cut capacity after an “incredibly challenging” month of August, but reportedly the Chinese government also wanted to see switches made at the executive table of the airline group. Changes include new CEO, CCO and a fresh face at the chairman’s seat.
If the request were to be accepted by the local government, it would not be the first time that the Hong Kongese authorities provide some breathing space for the aviation industry. During financial crises of 2000-2004 and 2009, airlines were relieved by airport fee reductions of 15% and 10%, respectively, according to SCMP.