HK’s aviation sector receives US$258 million booster shot
As a fresh relief package pegged at HK$2 billion (US$258 million) to ease the liquidity pressure of airlines and aviation support services operators, Hong Kong’s Airport Authority (AA) will buy 500,000 flight tickets in advance from the four home-based airlines, Hong Kong Airlines, HK Express, Cathay Pacific, and Cathay Dragon.
Due to prolonged social unrest and the global pandemic, Hong Kong’s aviation industry has suffered a double blow. The number of visitor arrivals had already slumped to 199,000 in February 2020.
Whilst, the tickets will be given away to global visitors and Hong Kong residents in a future market recovery campaign to be launched when the pandemic is over, the purchase will inject liquidity into the airlines upfront.
The aviation support services operators at Hong Kong International Airport (HKIA) will also have the option to sell their ground services equipment (GSE) to the AA. The AA will pay cash upfront for the GSE to improve the cash flow of operators.
The operators will also enjoy a rent-free period for using the equipment after the sales. Operators providing services in ramp handling, maintenance, catering and into-plane fuel, and more may participate in the scheme on a voluntary basis.
“During this difficult time, the AA has been trying its best to support business partners. As an integral part of the aviation industry, the AA is also facing a significant shortfall in revenue because of the traffic plummet. The AA will go to the financial market in the next two months to raise the necessary funds to maintain its own liquidity for funding the airport operation and the committed capital projects. The loan will also be used to finance the new relief package,” a spokesperson from the AA said.
In addition, the CEO and executive directors of the AA will take a voluntary pay cut of 20 per cent for six months starting from this April.
“While we are taking active measures to address the cash flow issues of the AA, all six executive directors and I, on our own initiative, will take a pay cut, as our message to the entire airport community that we share the sufferings everyone is going through, and that we are all in it together,” said Fred Lam, CEO of the AA.
