Hong Kong airport to discount cargo throughput, but no incentives announced for passenger airline operations

December 13th 2019

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The rickety tram that winds its way across Hong Kong Island is wrapped in a red advertisement from Airport Authority Hong Kong (AAHK). But AAHK is not using the “ding ding”, as it is locally nicknamed, to promote travel after protests have dented inbound and outbound demand, causing passenger traffic to fall.

Instead, the ad encourages passengers to do more luxury shopping at the airport. Airlines are dismayed the airport has not offered any discounts or incentive program for the rebuilding of passenger traffic. Other areas of Hong Kong’s economy have been targeted, including small travel agencies. In August, the Hong Kong government announced a wide-ranging stimulus but said details of an airport offering would be worked out later.

The passenger offering has not eventuated, but AAHK is helping boost cargo demand. AAHK will contribute 20% of a rate reduction airlines offer freight forwarders. But the “Terminal Charge Concession Scheme” will not come into effect until April 1. A statement said this was being done “to reinforce Hong Kong International Airport (HKIA)’s competitiveness and its global status as the leading air cargo hub”.

The first airline to take advantage of the incentive offer was Cathay Pacifi Airways, which announced a HK$0.30 (US$0.038) discount per kilogram of general and special cargo, representing an 18%-20% discount on current rates.

Both AAHK and Cathay Pacific said the scheme would mitigate the cost impact of next year’s increase in air cargo screening mandated by the International Civil Aviation Organisation. The charge is intended to stimulate cargo demand, but unlike leisure traffic, air cargo is not price dependent. New iPhones from Zhengzhou and seafood in Okinawa need to be moved by air.