IATA Applauds China's Reduction in Airport Charges & Urges Action in Hong Kong

The International Air Transport Association (IATA) has said it welcomes the the Civil Aviation Authority of China's (CAAC) announcement of a 20% reduction in landing and air navigation service charges to foreign airlines.

As airlines operating in the Asia Pacific region reduce costs to weather the massive impact that the SARS crisis continues to weigh upon their businesses, the list of airports joining the airlines in cost cutting measures grows.

"The wisdom of the need to reduce costs has been accepted by airports throughout Asia including mainland China. It is now time for the Hong Kong Airport Authority (HKAA) and the Government of Hong Kong (GHK) to respond meaningfully to the aviation crisis in their back yard. Reducing charges at Hong Kong International Airport (HKIA) is a necessary investment to protect Hong Kong's future as a transportation hub. The HKAA and the GHK must act now in the long-term interest of the Hong Kong economy," said IATA Director General and CEO Giovanni Bisignani.

IATA stated that to date, airports in China, Chinese Taipei, Singapore, Malaysia, Macau SAR, Thailand, Indonesia and the Philippines have announced meaningful reductions in airport landing charges.

"Without relief in charges, the recovery of the aviation sector will be delayed compared with more progressive hubs like Singapore. The HKAA and the GHK need to get their act together quickly or risk greater than necessary long-term damage as a result of SARS. Airlines are reducing their costs by re-negotiating their contracts with their suppliers. Likewise it is time for the HKAA to re-negotiate its onerous fixed-charge HK$654 million annual contract with the Hong Kong Civil Aviation Department for air navigation services. This is not a time for finger-pointing. Decisive action is needed. The region is full of good examples of what governments and the private sector can do. Hong Kong need not look any further than the CAAC for good guidance," concluded Bisignani.

Summary of Major International Airport Charge Reductions

- Mainland China, 20% reduction in landing charges

- Singapore, 30% rebate in landing charges

- Chinese Taipei, 15% reduction in landing charges

- Malaysia, 50% reduction in landing charges

- Indonesia, 20-25% reduction in landing charges

- Philippines, 10% reduction in landing charges

- Macau, 30% reduction in landing charges

In April Hong Kong announced a deferral of payment of landing charges for up to 10 months. IATA characterized this as a "placebo for a serious illness." stating that deferring payment does not constitute relief; it means that industry will be hit by higher costs in the recovery phase.