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Hong Kong Airport staying the course
June 26th 2020
Airport Authority Hong Kong (AAHK) CEO, Fred Lam, said this week he was confident air travel would return once the impact of the coronavirus pandemic had subsided. Read More »
Writing in the AAHK annual report, published this week, Lam said the airport operator was pressing ahead with its long-term vision, including ongoing work on the third runway, due to be operational in 2022, and refurbishment of Terminal 2 slated for completion in 2024.
"The present downturn is unprecedented, but we are confident that when the disease subsides, air passenger demand will rebound," Lam said in the annual report.
"For this reason, we are maintaining our long-term development plans to meet future demands."
Passenger traffic during AAHK's most recent fiscal year, which ended on March 31, 2020, fell 18.9% to 60.9 million, compared with the prior corresponding period. Cargo throughput was down 7.3%, at 4.7 million tonnes, while the number of aircraft movements slipped 12% to 377,420.
The declines, which have continued since March, were felt on the bottom line, with net profit for fiscal 2020 falling by 29.7%, to HK$5.9 billion (US$761 million), from HK$8.3 billion a year ago. Revenue was down 12.1% at HK$17.1 billion.
On top of anti-government protests in Hong Kong and global geopolitical tensions that impacted passenger and cargo demand through most of 2019, the Special Administrative Region has been rocked by the coronavirus pandemic especially as it has no domestic network.
The authority has offered airline and tenants support through waiving aircraft parking and landing charges, as well as rent reductions for shops and restaurants in the terminal.
AAHK also has pledged to purchase 500,000 tickets from the four Hong Kong-based carriers to be used as giveaways to global visitors and Hong Kong residents as part of its future business recovery program, alongside other initiatives to attract passengers and stimulate business when the pandemic subsided.
It has shored up its balance sheet, announcing this week HK$35 billion (US$4.5 billion) in fresh funding from 21 banks through a HK$17.5 billion term loan and a HK$17.5 billion revolving credit facility.
While there had been some easing of travel restrictions, with Hong Kong International Airport now able to accept transit passengers, Lam said that as of May 2020, it was "still difficult to tell when passenger demand would recover materially".
"In 2019/20, HKIA faced the most difficult year in its history," Lam said.
"I would like to express my deep gratitude to the airport community and our business partners for their perseverance and support during this crisis.
"As trying as it was, the past year would only be a temporary setback. HKIA is a leading international hub and I am confident that our traffic levels will recover. I look forward to working with the airport community to revitalise our city’s economy and take HKIA to new heights."
AAHK chairman, Jack So, said the airport was "staying the course".
"The business reduction caused by COVID-19 has not distracted us from our long-term vision," So said in the annual report.
"The pandemic will pass, hopefully soon. We will continue to enhance HKIA’s infrastructure and facilities to drive the future development of the airport and contribute to Hong Kong’s economic growth."
