Airlines should not count on any cut in landing fees when Hong Kong's airport authority completes its operational review in June. That is the warning from the authority, which explains that lower-than-forecast traffic means fees must stay high to avoid a shortfall in predicted revenues for the city's Chep Lap Kok - opened only a year ago.

The contrary view, voiced by a growing chorus of airline, tourism and export officials, is that Chek Lap Kok's fees, the third highest in the world, will cause flights to be diverted to other cities in the region and threaten Hong Kong's competitiveness.

The airport authority responds that airlines fly wherever traffic demands and lowering charges would be tantamount to a taxpayer subsidy for airline shareholders. The authority also claims it is required by law to operate Chek Lap Kok under "prudent commercial principles".

Various proposals for reducing the airport's fees have been floated. Hong Kong's deputy secretary for economic services suggested that the airport can lower charges because they were based on overly-optimistic traffic forecasts. This seems contrary to the view expressed by the airport authority.

Another suggestion, offered by Jim Eckes, a Hong Kong-based aviation consultant, is to amortise the cost of constructing the airport over a longer period, perhaps 20 years rather than the current five. The most fundamental change, suggested by several legislators, is to amend the law that now requires the airport authority to operate at a profit. While this debate continues, Chek Lap Kok's second runway will open in May during peak hours and become fully operational in August.

Source: Airline Business