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Hong Kong has seen a significant drop in the number of visitors after months of protests that have also had more and more impact on the airport and the airlines. Not only has the number of incoming passengers decreased, but given the disruption at the airport, the number of connecting passengers has also decreased in some cases.
What is the demand in Hong Kong dropped?
Hong Kong has seen a massive drop in the number of visitors, including those passing through the airport:
- In August, Hong Kong Airport recorded a 12% drop in total passenger numbers
- In August, Hong Kong Airport recorded a 38% decrease in the number of O & D passengers (those who arrive and depart there, rather than those who connect)
- In the first 10 days of September, Hong Kong recorded a 90% drop in the number of tour groups from China, after a 63% drop in August.
Do not forget that the month of August is always the best month of summer, so it is highly likely that the numbers look even worse for the rest of the year.
Hong Kong
Some airlines have reduced their capacity
We have seen some airlines adjust capacity as a result of this. For example, Cathay Pacific reduced frequencies on some popular routes, while United discontinued its Chicago-Hong Kong flight and downgraded flights from Newark and San Francisco to Hong Kong.
I think we will continue to see airlines adjust their capacity as a result of this situation.
United has already cut his flight from Chicago to Hong Kong
Airlines want a relief from the airport
As stated by SCMP, in the hope of making flights to Hong Kong viable, the Hong Kong Airlines Council has asked the airport to reduce its charges.
The organization represents more than 70 airlines serving Hong Kong and proposes to reduce the cost of airlines serving Hong Kong, and even reduce the costs of renting offices and lounge areas at the airport, in order to provide respite to the airlines.
Although some relief measures have been taken in Hong Kong, there is still nothing specific for airlines. Aviation supports 330,000 jobs in Hong Kong and contributes more than 10 percent of the city's GDP.
By the letter:
"Given the situation, the Bar is urging the Hong Kong government to consider putting in place short-term relief measures that can help airlines survive in this extremely difficult period.
It would certainly be useful for the government to temporarily waive these operating expenses so that airlines operating in Hong Kong can remain commercially viable. "
Hong Kong is known to have some of the highest airport taxes in the region. It should be noted that approximately 16% of Cathay Pacific's operating costs consist of airport and air traffic control charges. It is therefore a considerable amount.
Hong Kong is also known for its highest rates in the region. On average, a Boeing 777-300ER serving the airport would pay more than HK $ 110,000, or about $ 14,000. This includes the costs of landing, parking and passengers.
Airlines want Hong Kong airport to reduce fares
Bottom line
This is a difficult time in Hong Kong and the airlines are suffering. US President Scott Kirby has described the financial results of the Hong Kong flights as "terrible," and I guess they are not the only ones to feel that way.
It will be interesting to see if the airport is willing to waive some fees. In all honesty, this would not be the first time they would, because they offered the same relief during the SARS crisis and the financial crisis.
Given that Hong Kong has some of the highest airport fees in the world, it does not seem unreasonable for airlines to want short-term relief.
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