Airlines in Hong Kong extend cuts to passenger capacity into spring 2020, with air travel downturn to continue even if protests wane

South China Morning Post 發布於 2019年12月13日16:12 • Danny Lee danny.lee@scmp.com
  • Carriers slash capacity on commercial flights in first quarter of next year, which could mean millions fewer seats
  • Reduced availability on flights to run deep into 2020 even if anti-government unrest eases off in the new year
A flight leaves Hong Kong, but airlines in the city have already reduced passenger capacity on their services well into 2020. Photo: Felix Wong

The air industry's woes in Hong Kong look set to continue even if the protests subside as new data shows fresh cuts to passenger capacity in the first quarter of 2020.

Most airlines in the city have already pared back their flight schedules for as late as March, the figures from the Air International Air Transport Association (IATA) reveal, which could amount to millions of fewer seats going on sale.

The decision by carriers to reduce the availability of tickets for Hong Kong flights well into next year comes after the sector has been hammered by six months of ongoing anti-government protests.

August saw major disruption for passengers at Hong Kong airport after protesters succeeded in causing chaos on several occasions. Photo: Sam Tsang

Hong Kong received 2.3 million fewer passengers between August and October compared with the same period last year. Tourist arrivals in October alone plunged 43.7 per cent.

The new data from IATA, obtained by the Post, shows there are 10 per cent fewer seats up for sale in November and December year over year, which is more than double the level of earlier cuts highlighted in late October.

There is also a 6 to 8 per cent reduction in the number of seats offered from January to March next year, meaning airlines will suffer reduced sales deep into 2020 even if the anti-government demonstrations ease off in the new year.

Alexandre de Juniac, IATA director general and CEO, said Hong Kong International Airport " one of the biggest air transport hubs in Asia " had been "severely affected", which he said justified a speedy roll-out of concessions from the government for passenger airlines.

Speaking to the Post at an annual meeting with journalists in Geneva, he said Hong Kong would feel the "positive effect" of reductions in charges, which could include landing and parking fees.

Almost every airline flying out of HKIA has cut flights, including Emirates, Singapore Airlines, Qantas and United Airlines. Cathay Pacific cut its seat capacity by up to 7 per cent for November and December, and by 1.4 per cent in 2020.

Airlines in mainland China lead fresh cull of Hong Kong flights amid protests

New data from Cathay Pacific and the airport on their respective performance in November is due in the coming days, and is likely to show another sharp decline in passenger numbers.

According to a report of CAPA Centre for Aviation, an international research company on global aviation news, Hong Kong airport's seat capacity was down 12 per cent year over year for the week of December 2.

Hong Kong Airlines, beset by financial troubles, cut its seat capacity for the week of December 2 by 18.4 per cent, wiping out its growth for the past three years. The Cathay Pacific Group is also managing a decline of 3.8 per cent.

"Demand should begin to return to previous levels if the protests " or at least headline-grabbing violent incidents " subside. Traffic from mainland China could take longer to recover, however," the CAPA report concluded.

Luya You, a transportation analyst at Bocom International, said there was no end in sight for the "free fall" in arrivals.

"If the unrest extends significantly beyond the first quarter of 2020, for example, we believe airlines with substantial Hong Kong-based operations may even cut routes outright," You said.

No relief measures for airlines at Hong Kong airport despite protests

A report from Bocom concluded that transit passengers had saved Hong Kong from a larger collapse in air traffic.

"HKIA's position as one of the most connected hubs in the world provides some assurance to airlines, as key routes and transit volumes won't be diverted in the short term, in our view," You added.

You warned that although the drop of tourism arrivals is less than the reduction recorded during the three-month severe acute respiratory syndrome (Sars) health crisis in 2003, consecutive 30 to 40 per cent drops in tourism arrivals over many months could be more "devastating" than steeper 60 per cent falls over three months.

IATA said the government should be well aware of the "effect" that charge reductions for airlines had in the wake of Sars in encouraging passengers to return to Hong Kong with cheaper fares.

Ronald Lam Siu-por, chairman of the Board of Airline Representatives and Cathay Pacific chief customer and commercial officer, said: "We would definitely welcome relief measures by the Hong Kong government so that airlines operating in Hong Kong can maintain viability through this extremely difficult time … as a global aviation hub."

Hong Kong's airport authority, airlines to offer discounts on cargo charges

The Civil Aviation Department had earlier said it would not take back runway slots from airlines up to at least March 28, making it easier for carriers to suspend flights amid the drop in demand.

Flight schedules for the summer season from March 29 until late October are due to be unveiled soon, which could indicate the levels of confidence airlines have in the Hong Kong market over the longer term.

Mass demonstrations against the now-withdrawn extradition bill, which sparked a wave of unrest in June, have morphed into a broader anti-government movement, fuelled by allegations of police brutality and the campaign for more democracy.

Copyright (c) 2019. South China Morning Post Publishers Ltd. All rights reserved.

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