- Association head warns of impending collapse in the wake of airline struggles as pandemic cripples sector
- HASPA chairman says there is 'limited time to save people', as further job cuts could lead to another 2,000 employees losing livelihoods
Major businesses serving Hong Kong's airport have called on the government to follow Singapore's example in subsidising the wages of workers, warning that job losses in the sector amid the Covid-19 crisis could double to 4,000 in a fortnight.
Third-party firms, which offer services outsourced by airlines said they were facing catastrophic difficulties as the substantial reduction in flights meant little to no revenue from airlines, placing jobs at risk.
Like the carriers, the sector was left reeling from protests and is now grappling with the pandemic which has crippled air travel worldwide.
"What HASPA and the industry need is government support to continue," David Walker, chairman of Hong Kong Airline Service Providers Association (HASPA), said in an exclusive interview with the Post. "Businesses will be doing all they can to reduce those costs and labour is the last thing we would turn to, but we are at that point now at the airport."
"Cash is being burned down incredibly fast," Walker added. Some of the group's members are paid per flight. "We have really got limited time to save people."
More than two months into the city's struggle against the coronavirus, HASPA said its members were down to "the bare bones", and had switched to only essential spending, including freezing all investment, capital expenditure, as well as putting most staff on unpaid leave and scrapping overtime.
The association represents 18 companies and 24,000 workers at Hong Kong International Airport, including baggage handlers, check-in and passenger handlers, aircraft refuellers, maintenance staff, cleaners and in-flight caterers under major companies such as Cathay Pacific Catering, Asia Airfreight Terminal, Gate Gourmet Hong Kong and more.
As Covid-19 crisis deepens, battered airlines' recovery hopes vanish over horizon
Air traffic is down by around 90 per cent and the largest carriers such as Cathay Pacific, including its subsidiary Cathay Dragon, have cut flights in April and May by 94 per cent, with some airlines even reducing schedules until September.
"(An extra) 2,000 in the next few weeks is quite reasonable (in terms of job losses), given 24,000 people work across businesses where volume is down 90 per cent," Walker said. About 2,000 jobs have been cut in the sector since the public health crisis erupted.
Last week, Singapore announced a wage support scheme covering 75 per cent of salaries in the aviation industry for the first S$4,600 (HK$25,000) per employee. HASPA said Hong Kong " which like the Lion City, also has a top-rated global airport " needed to match its rival hub until normal business resumed.
The association said 70 per cent of expenses incurred by companies in its sector came from employee costs, which were fixed.
Pressure has been mounting on the government to do more. Along with the Airport Authority, the administration has rolled out a relief package of HK$2.6 billion in two tranches. Cathay Pacific said at the time it needed "significantly more" immediate help to match the scale of the crisis.
Industry players have said more widespread support would have a profound impact on the aviation industry, which supports 330,000 jobs in the city and contributes 10.2 per cent of Hong Kong's gross domestic product.
The airport services industry said the relief measures to date would save less than 5 per cent of its costs up to the end of June. HASPA added that less than 6,000 workers were needed at the moment to keep its members' services afloat.
HK$2.6 billion in government cash not enough, say Hong Kong airlines
The International Air Transport Association (IATA) has also warned of a "risk" over the aviation value chain collapsing around struggling airlines.
"Governments must help airlines (and) help the whole travel industry and aerospace industry because everybody is suffering," said IATA chief Alexandre de Juniac on Tuesday. The association warned a recovery could take longer than expected and stretch into 2021.
Last week, aviation services firm, John Menzies, cut 17,500 jobs " more than half of its jobs worldwide " because of the collapse of air travel. The Scottish firm has a presence at 200 airports in 37 countries and jurisdictions, including Macau but not Hong Kong.
For HASPA members, they fear losing skilled workers, amid difficulty recruiting such staff and putting them through a training process already considered lengthy.
The Airport Authority referred the media to a press release on March 23, declining to comment on the prospect of a third round of more substantial financial aid.
A Transport and Housing Bureau spokeswoman said: "We will continue to closely monitor the latest situation and review measures to support the industry in due course."
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