Airlines Ask Hong Kong To Waive Airport Fees

Filed Under: Cathay Pacific

Hong Kong has seen a huge drop in visitors after months of protests, which have increasingly impacted the airport and airlines as well. Not only has the number of inbound travelers dropped, but given the disruptions the airport has seen, the number of connecting travelers has dropped in some cases as well.

How Much Has Demand In Hong Kong Dropped?

Hong Kong has seen a massive drop in visitors, including those traveling through the airport:

  • In August Hong Kong Airport saw a 12% drop in travelers overall
  • In August Hong Kong Airport saw a 38% decrease in O&D passengers (those arriving and departing there, rather than those connecting)
  • For the first 10 days of September Hong Kong saw a 90% drop in tour groups from China, following a 63% drop in August

Keep in mind that August was still a peak summer month, so it’s pretty likely that numbers will look even worse for the rest of the year.

Hong Kong

Some Airlines Have Cut Capacity

We’ve seen some airlines adjust capacity as a result of this. For example, Cathay Pacific has cut frequencies on some popular routes, while United has discontinued their Chicago to Hong Kong flight, and downgraded their flights from Newark and San Francisco to Hong Kong.

I expect we’ll continue to see airlines adjust capacity as a result of this situation.

United has already cut their Chicago to Hong Kong flight

Airlines Want Relief From The Airport

As reported by SCMP, In hopes of making flights to Hong Kong sustainable, the Board of Airline Representatives of Hong Kong has urged the airport to slash fees.

The organization represents over 70 airlines flying to Hong Kong, and they propose cutting the cost for airlines flying to & from Hong Kong, and even cutting the cost of rental fees for offices and lounge space at the airport, in an effort to provide some relief to airlines.

While some relief measures have been taken overall in Hong Kong, there hasn’t been anything specific for airlines yet. Aviation supports 330,000 jobs in Hong Kong and contributes over 10% to the city’s GDP.

Per the letter:

“In view of the situation, the BAR urges the Hong Kong government to consider issuing short-term relief measures that can help airlines survive this extremely difficult time.

It would definitely help if the government could temporarily waive these operating expenses so that airlines operating in Hong Kong can remain commercially viable.”

Hong Kong is known for having among the highest airport fees in the region. It’s noted that about 16% of Cathay Pacific’s operating costs are made up of airport and air traffic control fees, so this is a significant amount.

Hong Kong is also known for having among the highest fees in the region. On average, a Boeing 777-300ER flying to the airport would rack up over 110,000 HKD in fees, which is about 14,000 USD. This includes landing, parking, and passenger fees.

Airlines want Hong Kong Airport to cut their fees

Bottom Line

It’s a rough time in Hong Kong, and airlines are suffering. United President Scott Kirby has called the financial performance of Hong Kong flights “terrible” at this point, and I suspect they’re not alone right now in feeling that way.

It will be interesting to see if the airport is willing to waive some fees. In fairness, this wouldn’t be the first time they’ve done so, as they offered similar relief during the SARS crisis and financial crisis.

Given that Hong Kong has among the highest airport fees out there, it doesn’t seem unreasonable that airlines would want some short-term relief.

Comments
  1. At least reduce them to keep the airlines flying there; the cost structure of flights must be totally sideways for just about everyone flying there.

  2. Wow 10% of the HK’s economy is through the airport. That is significantly big. How does Changi in Singapore compare in terms of GDP %.. Hong Kong must be freling yhe oinch and notice of award availability being increased there as of late due to the situation?

  3. Ripple effects from dumb kids doing dumb stuff and asking people like Trump for help. Hah, he should be the last person to ask for help.

    First they came for the police station, and I did not speak out because I was busy burning it.

    Then they came for the airports, and I did not speak out because I was not working I am still in school.

    Then they came for the airlines, and I did not speak out because I was not flying anywhere (on my parents money).

    Then they came for me and there was no one left to speak for me. So I ask Trump to come grab me by the p***y.

  4. Given the situation, would you be dissuaded to buy a ticket on Cathay Pacific that connected through Hong Kong?

    I see that fares to Asian destinations from the US for this Fall are (not surprisingly) pretty good via Cathay right now.

    I guess the risk would be Cathay further cutting flights, and be at risk of having to make new flight plans…

  5. I’m curious whether those airport fees is just a cash cow for HKG or whether they really do need those fees to maintain the airport and pay their staff fair wages.

  6. Flying to HK on Wednesday – Cathay in PE. Looked at the seat map and it’s me and one other person in there. No chance of an OP up this time hah!

  7. This article makes perfect sense. And of all the airlines flying into Hong Kong, American only has 2 daily flights. Instead of having ‘terrible performing routes’ have they thought about changing the aircraft, to the 787???

    Just for the record, even without a codeshare partner in Hong Kong, United still has more capacity to HK than American. Business people are still traveling to HK to meet with investors from NY

  8. Only last week, I made a daytrip to HKG (from BKK) on CX in J, mainly to experience the lounges. Both my flights were full in J and almost full in Y. The city, however, was more quiet than usual. But it was perfectly peaceful on a Monday.

    Hongkongers may be protesting, but they’re also working, and in Hong Kong, work comes first. From Monday morning until Friday afternoon, nobody will be bothered by anything out of the ordinary. Weekends are a different thing.

    I would certainly not avoid HKG on a weekday, neither as a destination nor as a transfer airport.

  9. 300,000 people and 10% GDP? Ben, sanity check this…. basic math. The entire tourism, travel and hospitality sector maybe. Maybe.

  10. @Ryan: That’s still a result of the Vietnam mistake fare.
    @Oliver: 330,000 people is like 4.5% of the population; seems reasonable to me. Maybe you’re the one who needs to learn “basic math”? (I’m not saying the 10% GDP figure is or isn’t accurate, because I didn’t check it myself; I’m just disagreeing with you and claiming that the 10% GDP figure does in fact pass a sanity check.)

  11. Just how will waiving airport fees lure more pax who don’t want to fly there?

    Suppose airlines just waved their margins instead
    or their fares altogether specially in Y class, not sure % will go as high as before

  12. @Eskimo — “Then they came for me and there was no one left to speak for me. So I ask Trump to come grab me by the p***y.”

    Sincere advice — do NOT give up your daytime job! Your TOTALLY PATHETIC attempt at “humor” kinda SUCKS! WHY must you inflict your LAME personal anti-Trump politics onto this forum?

  13. I don’t have much sympathy for CX and the others. They have not done enough to stimulate demand by significantly lowering the prices, especially in F and J. It’s a classic supply and demand situation, something the US carriers learned after 9/11. Nobody wanted to fly then but low and behold they came out of the woodwork when the carriers lowered their fares.

  14. Bruh. Do some action. Shift capacity to the rest of the Pearl River Delta. Teach HKA a lesson they will forever be memorized upon in their fiscal reports.

  15. Eskimo must have been educated in a Chicago public school where they failed to teach him Weinstein and Clinton were the original puz*y grabbers and cigar inserters!

  16. @x Bruh why on earth would anyone fly to Guangdong other than for business? Singapore a much better option keep the fees out of the hands of the CCP. Also spread connecting traffic through Taipei, Seoul, Tokyo, Bangkok and others all with better airlines than any of the mainland China carriers. Win win as pooh bear likes to say.

  17. @danial from Finland you are seriously in need of a life if you flew to HKG to experience the lounges. Also Greta Thunberg called and left a message for you it said “Thanks for help killing the planet for about the stupidest reason a person could have!”

  18. @BillC
    Too bad this isn’t humor nor this is anti-Trump. Millions paid the price of letting Nazi rise to power when many could have prevented. A lot of stuff can be done to stop juveniles creating anarchy. Neither does Trump, a person know to stir conflict and ignores one-China, is the right person to help make peace with China.

    @John
    Yep, wisdoms from the state school education. The same state education system behind UC Berkeley, UT Austin, UVA, U Mich, etc. To a certain extent, places like West Point should also fall under your understanding of ‘state school education’.

    One can only assume that the reason you don’t know this is either because you got bad home schooling or you never received proper education.

    @Dave
    I can’t say what Chicago Schools teach or who are the first grabbers (I assume it’s Adam?), but I do see that HK juvies hold signs asking for Trump not Clinton not Weinstein.

  19. Hong Kong is reportedly the most profitable airport in the world. Like most monopolies/oligopolies in Hong Kong, they know how to extract value.

    If the airlines get relief in the bad times will they agree to additional charges when times are good?

    My last few flights have been full or nearly full, especially upfront. I think the lower passenger numbers are mostly low fare, back of the plane seats.

    Come visit Hong Kong. The protests are very localized, locations announced in advance, and only happening on weekends. So a great time to enjoy.

    The biggest reduction in tourists is from mainland China, likely to continue over the national day holidays next week. As a resident, I don’t miss them. I’m sure the luxury retailers are hurting, but we could do with many fewer watch and jewelry stores, which have been squeezing out retailers that locals use.

  20. @Dave — “Greta Thunberg called and left a message for you it said ‘Thanks for help killing the planet for about the stupidest reason a person could have!’ ”

    ROFLMAO!

    So now we have adults who are actually so naive/gullible as to be played by “Greta,” who has, herself, been brainwashed to become an unfortunate victim of *child abuse* and exploitation by those Demented “Climate Doomsday” wackos that spread Fear, Uncertainty, and Doubt (F.U.D.) about the future of Earth, for their own *nefarious* purposes that have *nothing* to do with the actual future of Earth or its “Climate”!

    Has everyone totally forgotten *how* to think for themselves and actually look at the *Real* Science behind this Greatest Hoax upon Mankind, called Anthropogenic Global Warming (AGW)? Upon *what* evidence are all of the *totally misguided* beliefs about AGW based, with its “threat” upon Mankind? Do *not* believe that *debunked* excuse about “97% of scientists say that AGW is real, so it *must* be true”! That is a statistical *Game* and *Lie* meant to brainwash our grossly UN-educated public into supporting their F.U.D. agenda, which *intentionally* conflates Pollution/Weather/Climate in order to *confuse* the public!

    Even NASA last year finally confessed that the AGW Agenda was based on really *Bad* “science” and meant *nothing* meaningful, since *all* of their Climate Models were *totally* flawed at its core foundations! We have a saying in the Systems Modeling profession about this:

    Garbage In ==> Garbage Out!

    And that’s what we’ve been getting since forever with the AGW Hoax based upon all that Garbage!

    Unfortunately all of this F.U.D. has pervaded and adversely influenced the global airline industries, due to Political Correctness, rather than relying on *sane* reasoning about *real* Science!

  21. For the past few years I’ve been flying SFO-HKG (and back again) on a bi-weekly basis on United in Polaris.

    I haven’t seen a noticeable decrease in the amount of passengers in Polaris since the protests began this summer. Nor have I seen a decline in the ticket prices.

    Similar to the protests in Greece about a decade ago the violence here has been mainly concentrated to a few small parts of the city. Also similar to the Greek protests the media flees peaceful marches when they hear that something is on fire in a different district.

  22. @Eskimo — “Too bad this isn’t humor nor this is anti-Trump. Millions paid the price of letting Nazi rise to power when many could have prevented. A lot of stuff can be done to stop juveniles creating anarchy. Neither does Trump, a person know to stir conflict and ignores one-China, is the right person to help make peace with China.”

    So your attempt to associate Trump with Nazis (as implied in your post above) is *not* anti-Trump? How about you enumerate specifically *what* Trump has actually *done* to “stir conflict” in Hong Kong, anyway?

    Are you even aware of what Joshua Wong requested in his meeting with the USA Congress?

    He put forth the following propositions to the USA Congress —

    #1. Pass the Hong Kong Human Rights and Democracy Act
    #2. Add a human-rights clause related to the Hong Kong protests into trade negotiations between the US and China
    #3. Stop exporting riot weapons to Hong Kong’s police force

    On top of everything, he even chided Trump for *not* sufficiently supporting the HK protest activities, and “bending” too much towards China’s position, to the detriment of HK’s future prospects for continued liberties and freedoms!

    So … clarify *further* what you meant in your post about Trump stirring conflict and ignoring China’s position, regarding the HK protests?

  23. I flew EWR-HKG (UA 179) on a 777-300ER in early September and noticed that the load was quite low. J was perhaps half full at check in and maybe two-thirds at most after upgrades were processed. The back of the plane was also sparsely populated, with many, if not most, passengers able to spread out in the proverbial “poor man’s business class” configuration. The city itself also seemed quieter than usual and there was little vehicular traffic for a Friday night or Saturday morning.

    On a side note, I don’t know how I ever chose to sit in the second J cabin in the past. 777 or 787, the second cabin is ridiculously loud and the floor/seat shakes horribly. I don’t know if a larger footwell (if selecting a bulkhead seat) would compensate for this discomfort unless one were quite tall.

  24. I have no fear of transiting at HKG. I just bought my biz trip on CX from JFK to TPE via HKG for about US$4300 for traveling in mid-October. I do think HKG should give airlines some temporary relief on charges. HKG is a cash cow only if the cows are healthy!

  25. Eskimo, why bother listing colleges you never had a slight hope of attending? You’re so off-topic 95% of the time.

    Same with the HK situation. Don’t opinionate beyond your mental capacity. It’s embarrassing to read. Even National Enquirer magazine is too sophisticated for you.

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