News

Third runway at HKIA to be self-funded

18 Mar 2015 by Clement Huang

The development of a third runway at Hong Kong International Airport continues to gain traction after the project was green lit by the Executive Council of the Hong Kong SAR Government.

According to reports, the Airport Authority will self-finance the scheme, and has set aside a budget of HK$141.5 billion for the development of the new runway. Construction will begin early next year, with completion expected in 2023.

Perhaps the most significant change that could affect travellers flying in and out of the Hong Kong is that the finance plan will adopt a “user pays” principle that requires levying surcharges onto passengers and airlines.

According to Fred Lam Tin-fuk, chief executive of the Airport Authority, this would represent the “fairest” means for financing the project, as doing so through the government would mean having local taxpayers “footing the bill for overseas passengers".

As reported by the South China Morning Post, the plan is to have each departing traveller pay a sum of about HK$180 (US$23), as part of an “airport construction fee”. Lam did stress that the Airport Authority would also be looking into the possibility of “[increasing] internal funding or borrowing further, and reduce the charge on passengers."

Meanwhile, the authority will also reverse its 15 per cent cut in landing and parking fees, meaning that the fees imposed on carriers will revert back to their pre-2000 levels.

Cathay Pacific has issued a statement fully supporting the construction of the third runway. However, the airline’s chief executive Ivan Chu has joined the likes of the International Air Transport Association (IATA) and the Board of Airline Representatives (BAR) in stating that the project can be completely self-funded by the Airport Authority’s existing income streams.

“The Airport Authority enjoys the highest net profit of any airport in the world and benefits from strong cash flows, a healthy balance sheet, and growing income from retail and aeronautical streams,” said Chu.

“[It] is fully capable of financing the construction of the third runway through its own means without the need to impose additional financial burden on users. Charges must remain competitive to ensure continued growth for aviation, tourism and related industries”.

For more information, visit hongkongairport.com and cathaypacific.com

Clement Huang

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