Qantas has revealed plans to close one of its four overseas lounge locations.
Qantas closes Hong Kong lounge
In 2014, Qantas opened a beautiful lounge at Hong Kong International Airport. The lounge had seating for roughly 300 people, and spanned about 2,000 square meters (over 21,000 square feet).
The lounge was closed around the start of the pandemic, given strict travel restrictions in both Hong Kong and Australia. It has now been decided that this lounge closure will be permanent. As reported by Executive Traveller, the Qantas lounge Hong Kong won’t be reopening. Qantas customers will instead be directed to the lounges of oneworld partner Cathay Pacific, as the Hong Kong-based airline has quite a lounge footprint at the airport.
The economics of airport lounges
I’m not surprised to see the Qantas lounge Hong Kong closed, and for that matter I never fully understood the purpose of the lounge in the first place. At outstations, airlines generally have two choices — they can operate their own lounge, or they can use a partner airline or contract lounge.
Generally there are a few considerations when deciding whether to open a lounge:
- Does the airline care about offering its “own” experience on the ground? Emirates is known for operating lounges at outstations even with limited service, because the airline cares about offering a consistent experience
- Is it cheaper to operate a lounge or send passengers elsewhere? Obviously the fixed costs of operating a lounge are high, but the alternative is paying for each passenger who accesses a partner lounge, and that can add up at a busy outstation
- How much revenue can be recouped through admitting others? Airlines take different approaches to this, but in some cases an airline can operate a lounge at a profit by participating in something like Priority Pass
In the case of the Qantas lounge Hong Kong, a few things come to mind:
- All Qantas premium cabin passengers and eligible elite members could also access Cathay Pacific lounges, given that both airlines belong to oneworld, and those lounges were largely superior; so it’s not like Qantas operating its own lounge was materially improving the passenger experience
- While Qantas had some agreements to sell access to its lounges, it certainly wasn’t going all the way in maximizing revenue, in the sense that the lounge didn’t partner with Priority Pass
- In other words, the lounge wasn’t a huge differentiator for the airline, and probably cost the airline a lot of money; with questions surrounding whether Hong Kong will ever see a full recovery in demand, I can see the motivation for closing this lounge
The way I view it, the only real loss with this change is the overall decrease in oneworld lounge capacity at the airport. Even though I rarely visited this lounge, I was happy others decided to visit the lounge, as it kept other oneworld lounges emptier.
The Qantas lounge Hong Kong will be closing permanently, and Qantas passengers will instead be directed to Cathay Pacific lounges (which they’ve had access to all along). Ultimately this decision probably makes sense — unfortunately on some level it reflects that Hong Kong may never fully recover to what it was several years ago, or at least if it does, it’ll be a very long time.
What do you make of Qantas closing its Hong Kong lounge?