Cathay to cut terminal charges for Hong Kong export cargo

Reduction aimed primarily at mitigating the extra cost of the 100% cargo screening policy imposed by United Nations aviation regulator, ICAO.

Cathay Pacific is introducing an 18%-20% cut in terminal charges for Hong Kong export cargo from April 2020.

The concession, with a contribution from the Airport Authority of Hong Kong, comes during a global downturn in air cargo volumes, the US-China trade tariff dispute and concerns about political unrest in Hong Kong.

However, Cathay Pacific said that the initiative is aimed primarily at mitigating the extra cost of the 100% cargo screening policy imposed by United Nations aviation regulator ICAO, which rolls out next year.

Hong Kong is currently the world’s number one air cargo airport, handling 5.1m tonnes in 2018, but has not been immune from the decline in global airfreight.

The airport’s volumes fell by 7.0% in the first ten months of 2019 to 3.9m tonnes, while Cathay Pacific’s cargo arm saw its volumes down 6.6% to 1.6m tonnes in the same period.

Nelson Chin, general manager cargo commercial at Cathay Pacific, said that the reduction will “help boost the competitiveness of Hong Kong International Airport as a global cargo hub and support the cargo community with the cost Impact of the upcoming ICAO security regulations that will be rolled out progressively from the start of 2020”.

Export customers from Hong Kong will see a reduction of HK$0.3 per kg on the group’s four airlines: Cathay Pacific, Cathay Dragon, Air Hong Kong and HK Express. The reduction applies to both general and special cargo.

The Hongkong Association of Freight Forwarding and Logistics (HAFFA) welcomed the announcement, with chairman Brian Wu saying that the initiative “will help provide some relief from the numerous challenges currently faced by the logistics industry”.

Wu said that in order to maintain Hong Kong’s competitiveness as a whole “we hope to see all airlines follow this example.”

Wu added: “While the new terminal charge (TC) concession will help to alleviate some of the pressures on the industry, in view of the Hong Kong Airport’s freight throughput continues to wane and cargo volumes remained weak, we would urge Cathay Pacific and Airport Authority – and we hope the other airlines who follow their example – to maintain the concession for a longer period in order to help mitigate the high financial costs of compliance with the new ICAO security regulations and proactively reinforce the competitiveness of Hong Kong being the world’s busiest cargo airport.”

Cissy Chan, executive director, commercial of the Hong Kong Airport Authority (AA), commented:

“Over the years, the AA has been working closely with airlines and business partners to enhance air cargo facilities and services, making HKIA the leading global air cargo hub.

“The new initiative will help maintain the cost efficiency of the industry and strengthen our cargo volume growth, ultimately reinforcing HKIA’s competitiveness.”

Chan added: “Other airlines are welcome to join the scheme to offer their TC concession on a voluntary basis,” saying that the airport authority will “closely observe the market situation and review the scheme in a year’s time”.

Source: Lloyd’s