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HK cuts fees to entice airlines
HONG KONG, China (CNN) -- Hong Kong is seeking to revive its SARS-scarred travel sector by halving landing fees for airlines over the next six months. The decision, announced Sunday by the Hong Kong Airport Authority, follows lobbying from various pressure groups, including the International Air Transport Association (IATA). It also comes after the World Health Organization (WHO) on Friday lifted a warning against non-essential travel to Hong Kong and the southern China province of Guangdong, thought to be the source of the deadly SARS virus. Hong Kong is one of the world's busiest airports and was ranked third globally behind Dubai and Singapore for overall passenger satisfaction in a survey released by IATA last week. But IATA has also been critical of what it said was insufficient action by Hong Kong to help airlines cut costs as the flu-like SARS disease has taken its toll on passenger traffic. IATA said Friday that preliminary figures for April showed an 18.5 percent drop in global passenger traffic from a year earlier, with Asia-Pacific carriers hardest hit as their revenue passenger kilometers (RPKs) plunged 44.8 percent. After China announced a 20 percent cut in landing and air navigation service charges to offshore airlines on May 16, IATA said it was time for the HKAA and the Hong Kong government to "respond meaningfully to the aviation crisis in their back yard". IATA dismissed Hong Kong's April announcement that it would defer payment of landing charges for up to 10 months as a "placebo" that did not constitute relief. On Sunday, the HKAA said it would discount aircraft landing fees by up to 50 percent over the next six months. The typical landing fee for a Boeing 747 is HK$25,825 (about $3310). "We are setting the goal of recovering 80 percent of our traffic by December of this year," HKAA chairman Victor Fung told Reuters in an interview. Referring to SARS, Fung said: "You might say that in the health area, we have had the equivalent of a 9/11". The SARS outbreak has killed almost 700 people around the world since March, including about 260 in Hong Kong. Passenger numbers at Hong Kong's Chek Lap Kok international airport fell 30 percent in April from a year earlier, forcing Cathay Pacific and other Asia Pacific airlines to cut services, staff numbers and their financial outlook. Traffic plunged even further this month, with numbers down to just 20 percent of normal levels last week as the SARS crisis worsened in Taiwan, Hong Kong's busiest route. Hong Kong, which handled more than 33 million passengers last year, now joins airports in China, Taiwan, Macau, Singapore, Malaysia, Thailand, Indonesia and the Philippines as announcing what IATA calls "meaningful reductions" in airport landing charges. The Hong Kong airport authority offered a relief package to airlines last month amounting to HK$363 million ($47 million), but many carriers complained that it was not enough, Reuters reported. According to Reuters, Hong Kong's latest move involves a 10 percent reduction in landing fees for every 10 percentage point increase in load factors that airlines manage to raise, up to a maximum of a 50 percent reduction. Airlines that reinstate flights will also get reductions of up to 50 percent in landing fees if the resumed flights are less than 20 percent full. The SARS situation in Taiwan, where at least 65 people have died, continues to worry the airline industry. The Association of Asia Pacific Airlines director general Richard Stirland said that while the lifting of the WHO advisory on Hong Kong and Guangzhou was "fantastic news", there would be no all-round improvement until the Taiwan situation improved. He said the Taiwan route was the single most important one for Hong Kong.
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