COVID-19 FALL OUT: AIRPORT OFFERS AIRLINES US$593M STIMULUS, BUYS 500,000 TICKETS FOR FUTURE USE
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HONGKONG INTERNATIONAL AIRPORT
The Airport Authority Hong Kong, AAHK, an agency of government that manages the Hong Kong International Airport, has concluded plans to purchase 500,000 airlines’ tickets as well as buying back airport services equipment and the reduction of landing and parking fees, thus bringing the total stimulus package of the airport’s support to USD593,548,388. {HK$4.6 billion} as a means to cushion the lull experienced by the airlines and the drought in passenger traffic at the airport.
While the government of Honk Kong, in furtherance to her strategy of providing succour to aviation businesses, had also announced the provision of USD17.77billion {HK$137.5 billion} package to shield Hong Kong businesses from the devastating economic impact of COVID-19 which has literarily brought air transport to its knees.
The Chief Executive Officer, Airport Authority Hong Kong, AAHK, Carrie Fred Lam JP, said the aviation sector had been particularly hard hit and added that “Hong Kong International Airport is almost closed.”
The Chief Executive lamented that passenger traffic had collapsed and acknowledged that the “severity of the situation” faced by 75,000 employees in the airport community requires urgent and drastic attention.
Management of Hong Kong International Airport said it will expend HK$2billion for the purchase of 500,000 tickets and expend another HK$2.6billion to buy back airport services and equipment for the exclusive benefits of its airline customers.
From the total industry package of HK$137.5billion by the Hong Kong government, monthly subsidy to offset part of the workers’ salaries had been provided in the palliative as a means of making returning to business less burdensome for the entire aviation value chain.
The Hong Kong government just last month promised an extra HK$1 billion of relief for the industry through waivers on aeronautical fees, as well as reductions on landing charges and other support.
Singapore’s support for the aviation industry includes a wage offset scheme of up to 75% for the first S$4,600 (106,000 baht) of monthly wages, as well as S$350 million in rebates and lower aeronautical charges for airlines
The Transport and Housing Secretary, Mr Frank Chan Fan, said the stimulus measures for the aviation sector were designed “to provide cash flow to airlines during this very difficult time and to save the tickets for the future for when Hong Kong is going to re-launch to try and attract travellers coming to Hong Kong … when the pandemic is over.”
The Government also announced stimulus package for Aviation support firms – running services such as check-in, baggage handling, cargo and fuelling – as any of the firms with 100 workers or more on its payroll would be credited with HK$3 million, while those with fewer than 100 staff will be in line for HK$1 million
A spokeswoman for Cathay Pacific, Hong Kong’s flag carrier, said: “We welcome the Hong Kong SAR [Special Administrative Region] government’s latest announcement of relief measures to help businesses, including airlines, during this challenging time.”
A workers union leader, David Walker, chairman, Hong Kong Airline Service Providers Association, welcomed the support but noted that “While these measures will bring much-needed financial support to our industry, cash outflow for airport businesses will continue to remain high and we still face very challenging and uncertain times ahead.”
However, the management of AAHK, confirmed that it was seeking a loan, to help finance the latest relief package announced and lamented that the airport management was grappling with “a significant shortfall” in funds following the collapse in air and passenger traffic hitting them from aeronautical to retail and advertising revenue.
Despite the unprecedented drop in passenger and aircraft traffic, the airport management is progressing with the airport’s modernization and expansion project which includes the construction of the third runway with a total cost of USD18.25billion {HK$141.5 billion}.
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