Cathay gets backing for air cargo concessions

Top News | 12 Dec 2019

Reuters and Avery Chen

The Airport Authority says it will subsidize airline plans to discount charges paid by freight forwarders on air cargo as it seeks to bolster the world's biggest air freight airport by volume.

With passenger demand to the airport plunging by 13 percent in October after months of protests in the city and the cargo market weak all year, airlines have been seeking concessions from the government.

Cathay Pacific Airways said yesterday that the company's four airlines - Cathay Pacific, Cathay Dragon, AHK Air Hong Kong and HK Express - will cut terminal charges on general cargo and special cargo by 30 HK cents per kilogram - a discount of 18 percent to 20 percent from current levels, from April 1 next year.

The Airport Authority said it will contribute 20 percent of the concession amount, with Cathay being the first carrier to approach it about the scheme.

The authority said the concession will also help offset the cost impact of a gradual increase in air cargo screening requirements starting early next year, ahead of the implementation of new global security regulations.

The authority said it will review the concession scheme in a year.

Ronald Lam, chief customer and commercial officer at Cathay Pacific, said the terminal charge concession aims to reinforce the competitiveness of Hong Kong International Airport.

It will also help cargo customers to mitigate the cost of new International Civil Aviation Organization security regulations that will begin to take effect from the start of next year, the carrier said.

Cissy Chan Ching-sze, the commercial executive director of the authority, said the new initiative will help maintain the cost efficiency of the industry, strengthen cargo volume growth and ultimately reinforce the HKIA's competitiveness.

Other airlines are welcome to join the scheme to offer their terminal charge concession on a voluntary basis.

Passenger numbers at the airport fell 13 percent while flight numbers fell 6.1 percent in October due to a drop in visitors to Hong Kong amid the protests, the authority said.

Data from the Tourism Board showed that visitor numbers plunged 43.7 percent year-on-year to 3.31 million in October.

The HKIA's cargo throughput dropped 5.5 percent year-on-year to 428,000 tonnes in October. For the first 10 months of this year, cargo throughput fell 7 percent year-on-year to 3.9 million tonnes due to global trade uncertainty amid the prolonged Sino-US trade war.

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