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Let spoiled airlines fund Hong Kong’s third runway, not the public purse

Tuesday, 22 July, 2014

Jake van der Kamp

An association representing 2,500 pilots in Hong Kong has voiced support for a third airport runway, saying air traffic congestion during peak hours is already forcing planes to wait 15 minutes or more to take off.

This third runway crowd is certainly getting mighty casual with our money in its demands that we lay out up to HK$200 billion to save airline customers the inconvenience of taking a flight at a not entirely suitable time.

These travellers must wait for 15 minutes if they travel at peak hours. What horror. How can they possibly put up with it? Surely Hong Kong is obliged to remedy this breach of human rights.

Don’t get me wrong. I am all in favour of a third runway if air passengers and cargo shippers are willing to pay for it. Any financier, given data that the airport authority has ready to hand, can work out in less than 10 minutes what this would amount to per traveller.

If airline customers are willing to pay it, well and good. We can call in the dredgers and start work tomorrow. If they are not willing to pay it, then here is the big question: Why should the Hong Kong public purse pay for something that the beneficiaries themselves say is not worth their while?

Just auction the landing slots at peak hours and we will soon find out what price airline passengers set on reducing a 15 minute wait. It will be a good deal less than HK$200 billion, however you cut it.

The airlines misuse our airport at present with flights of unsuitably small aircraft to unsuitably minor destinations in China. These should be served by other regional airports. We run 57 per cent more flights at Chek Lap Kok than we did at the old Kai Tak airport for the same number of passengers.

And here are some further examples of how casual the Airport Authority is with your money:

Did you know that these people have so far spent HK$694 million on consultancy for this third runway project although the go-ahead stage is not even in sight yet? It certainly was the fanciest all-singing, all-dancing consultation paper in Hong Kong’s history.

But what’s a hundred million here or there? Or a billion, which it will soon be at this rate. Loose change, that’s all, nothing really compared to what they expect us to spend if the project actually gets going.

And another example, courtesy of that sleuth of uncomfortable corporate facts, David Webb. Did you know that the airport’s landing and parking charges are now an average of 15 per cent less than they were in 1998?

It’s a fact – reduced from 1998. This same airport authority that wants to dig into our pockets for HK$200 billion is itself so in the pockets of the airlines that, while begging money from us, it substantially cut what it charges them.

Let’s put this into further perspective. It did so despite having on hand an independent study by a reputable British air traffic consultant, LeighFisher, that our airport’s charges were far lower than worldwide counterparts, the 54th lowest of 55 international airports covered.

You wonder how it happens. It’s our airport. We paid for it. But the people we hire to run it do so not in our interests but in the interests of corporations that have not put a cent into it. Why?

I imagine their excuse is that the airport is already profitable enough, with earnings for the last financial year of HK$6.45 billion representing a 15.1 per cent return on equity.

It’s notable, however, that this included income of HK$7.5 billion from shop rentals and other commercial revenue. The airport operations themselves ran at a loss or pretty close to it.

Oh, but you have to put the two together, say the airlines.

Nonsense. Shall shops in Causeway Bay be made to subsidise the Mass Transit Railway for bringing in their customers? Actually, I like that idea. We shall see if the airlines will join me in proposing it. They argue it for the airport. Why not for Causeway Bay?

The fact is, we spoiled them rotten and now they think it’s their right.

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