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LCQ9: Hong Kong International Airport fees

     Following is a question by Hon Frankie Yick and a written reply by the Acting Secretary for Transport and Housing, Mr Yau Shing-mu, in the Legislative Council today (December 18):


     Some members of the business sector have relayed to me that the rapid development of airports in the Pearl River Delta (PRD) region in recent years will have much impact on Hong Kong's position as an aviation hub. They have also pointed out that the fee levels of the services and facilities provided by the Hong Kong International Airport (HKIA) (eg landing, parking and terminal building charges, as well as the rentals for offices, restaurants and retail shops) rank first among the airports in the PRD region, thus increasing operating costs and burdens for the freight industry. In this connection, will the Government inform this Council:

(a) whether it knows how the fees charged by HKIA (including landing, parking and terminal building charges) compare to those charged by the various airports in the PRD region in the past three years;

(b) given the view that the monopolisation of the security service in HKIA by the Aviation Security Company Limited (AVSECO) under the Airport Authority (AA) has led to an incessant surge in security service charges in recent years, and it is learnt that AVSECO has requested for an increase of more than 25% for the charges on a two-year service contract, whether the authorities know the criteria based on which the company determines its charges; and

(c) given the view that HKIA is a major infrastructure in Hong Kong and AA should not operate the airport solely on commercial principles which aim at maximising profits from its services, whether the authorities will, in the light of the fact that HKIA is an infrastructure with the purpose of supporting Hong Kong's overall economic development, request AA to review if the existing fee levels for its various services are value-for-money and if they are competitive in the PRD region, as well as to study the feasibility of lowering all the relevant charges, so as to promote the sustainable development of Hong Kong's economy; if they will, of the details; if not, the reasons for that?



     My reply to the various parts of the question raised by Hon Frankie Yick is as follows:

(a) and (c) The Airport Authority (AA) is committed to strengthening Hong Kong International Airport (HKIA)'s position as an international and regional aviation hub, thereby driving the sustained economic growth of Hong Kong.

     In accordance with the Airport Authority Ordinance (Cap 483), AA shall conduct its business and determine charges levied by the HKIA according to prudent commercial principles and shall, as far as practicable, ensure that, taking one year with another, its revenue is at least sufficient to meet its expenditure. On this premise, AA follows the principles of "user pays", fairness and transparency when formulating standard of airport charges. Maximising its profits is not AA's foremost consideration.

     In August 2012, AA commissioned a consultancy firm, LeighFisher (Remark 1), to study and compare the level of airport charges in 55 international airports across the globe, including the HKIA and three other international airports in the Pearl River Delta (PRD) region, namely the Guangzhou Baiyun International Airport, the Shenzhen Bao'an International Airport and the Macao International Airport.

     The consultant found that HKIA's charges were far lower than its worldwide counterparts as well as those in the PRD region. On a descending list of overall airport charges (Remark 2) (tax excluded), HKIA's overall airport charges ranked 54th among 55 international airports, whereas both the Guangzhou Baiyun and the Shenzhen Bao'an International Airports ranked 22nd, and Macao International Airport 47th. Such findings showed that HKIA's charges were very competitive, hence there is no need to consider lowering airport charges.

(b) Under the Hong Kong Aviation Security Programme, AA is required to provide aviation security services at the HKIA to protect aircraft and passengers etc. from unlawful interference. Jointly owned by AA and the HKSAR Government, the Aviation Security Company Limited (AVSECO) is a subsidiary of AA operating on a cost-recovery and non-profit-making basis, in providing aviation security services at the HKIA.

     AVSECO indicated that their operating costs, including staff pay and rent etc. have been increasing since 2011, and it is therefore necessary for the company to adjust charges on aviation security services. We understand that AVSECO has been having active communications and discussions with operators at the HKIA recently on the adjustment of the charges on its aviation security services, with an aim of reaching a consensus on charge level. The Administration will continue to monitor the concerned discussion outcome.

Remark 1: Founded in 1946, LeighFisher is a global management consulting firm based in the United Kingdom. Its annual publication, Review of Airport Charges, is widely quoted and referenced in related studies worldwide.

Remark 2: Overall airport charges include landing charge, parking charge, terminal building charge, etc.

Ends/Wednesday, December 18, 2013
Issued at HKT 14:02


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