The Board of Hong Kong's Airport Authority (AA) has
created a relief package of HK$450 million to assist airlines and
other operators whose business at Hong Kong International Airport (HKIA)
has been adversely affected by the global economic downturn. The relief
package comprises $200 million worth of reductions in charges and $250
million interest-free, deferred payments, starting April 2009.
Airlines operating at HKIA are being offered a 10% reduction in both
landing and parking charges till the end of 2009, amounting to savings
of about HK$200 million. Also, to alleviate cash flow issues during the
recession, 50% of rental payments for airline lounges, office premises,
counters and storage can be deferred for up to one year and repaid by
interest-free installments from April 2010 onward. If all business
partners apply to defer 50% of their rental payments, the total amount
will reach approximately $250 million.
The majority of retailers
and caterers at HKIA pay the AA a licence fee according to a mechanism
that allows fee adjustments based on airport passenger volume. According
to the mechanism, licensees pay less as passenger throughput declines.
The average licence fee has dropped by about 4% over the last few
Stanley Hui Hon-chung, Chief Executive Officer of the
Airport Authority, said that HKIA has been suffering from the flagging
HKIA's traffic volumes started declining in August
2008, with the first quarter of 2009 showing year-on-year decreases in
passenger throughput, cargo volume and aircraft movements of 7.1%, 22.8%
and 6.6%, respectively.
In response, the AA began implementing a
series of cost control measures - including headcount freezes - in the last
quarter of 2008.
Mr Hui said, "The operating environment
facing the global aviation industry is expected to remain challenging
for the rest of 2009. We intend to ride out the recession with our
business partners by introducing relief measures that are reasonable,
responsive and within our means."
"The reduction of both landing
and parking fees will help airlines at HKIA reduce operating costs,"
explained Mr Hui. "Meanwhile, the ability to defer rental payments will
help our business partners deal with liquidity issues in a troubled
operating environment. We hope the relief measures will help airlines
better able to maintain their flight schedules at HKIA in support of our
efforts to maintain HKIA as a regional and international aviation
In 2000, the Airport Authority reduced
both landing and parking charges at HKIA by 15%. The reduction has
remained effective since then.
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