"The rebate applies to the end of December and we are now asking the Airport Authority to extend it into next year, which would be welcomed by all airlines using Hong Kong International Airport," said chief operating officer John Slosar.

The authority introduced a relief package in April to help airlines using Chek Lap Kok. The concessions comprised a 10 percent cut in landing and parking fees, which will cost the authority HK$200 million, and an interest-free deferral of rental payments.

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The authority is studying a request by the industry group, the Board of Airline Representatives, to extend the discounts.

Cathay's landing, parking and route costs declined 8.3 percent to HK$5 billion for the first half of the year, accounting for 17.05 percent of its total operating expenses.

"The concessions did help Cathay but it can only save a very insignificant amount from a 10 percent discount in landing and parking fees," Quam analyst Allen Wong Kin-sing said.

Slosar said: "If we face a situation where costs like oil are rising as our revenues remain flat, we will surely see the squeeze on our margins continue." Brent spot doubled to US$80 (HK$624) a barrel from US$40 in January.

Hong Kong's largest airline had one of its strongest weeks last week on improving cargo business and more premium traffic, Slosar said.

"Looking ahead, December bookings are marginally ahead of 2008 in economy class but remain flat in the front end. January and February are still looking slow but that may be because of the current trend for late bookings," he said.

Demand for cargo business is very strong with a "big backlog" in Hong Kong.

"This is expected to last until mid-December but will then back off," Slosar said.

Qantas also requested the Airport Authority extend the concessions for one more year, said Freddy Li, the Australian carrier's regional general manager for Greater China and Korea.

"We have discussions with the authority from time to time in the hope of reducing operational costs," Li said.

Qantas reduced its flights to Hong Kong last year as it sought airports that charge lower fees.

Airports in Singapore, Bangkok and Kuala Lumpur have similar concessions on parking and landing fees, Li said.