Cathay Pacific jets in Hong Kong

Mandy Lo (The Standard) – Cathay Pacific Airways is in talks with the Hong Kong Airport Authority to extend concessions on parking and landing charges so as to “keep a very close eye on costs.”

“The rebate applies to the end of December and we are now asking the Airport Authority to extend it into next year, which would be welcomed by all airlines using Hong Kong International Airport,” said chief operating officer John Slosar.

The authority introduced a relief package in April to help airlines using Chek Lap Kok. The concessions comprised a 10 percent cut in landing and parking fees, which will cost the authority HK$200 million, and an interest-free deferral of rental payments.

The authority is studying a request by the industry group, the Board of Airline Representatives, to extend the discounts.

Cathay’s landing, parking and route costs declined 8.3 percent to HK$5 billion for the first half of the year, accounting for 17.05 percent of its total operating expenses.

“The concessions did help Cathay but it can only save a very insignificant amount from a 10 percent discount in landing and parking fees,” Quam analyst Allen Wong Kin-sing said.

Slosar said: “If we face a situation where costs like oil are rising as our revenues remain flat, we will surely see the squeeze on our margins continue.” Brent spot doubled to US$80 (HK$624) a barrel from US$40 in January.

Hong Kong’s largest airline had one of its strongest weeks last week on improving cargo business and more premium traffic, Slosar said.

“Looking ahead, December bookings are marginally ahead of 2008 in economy class but remain flat in the front end. January and February are still looking slow but that may be because of the current trend for late bookings,” he said.

Demand for cargo business is very strong with a “big backlog” in Hong Kong. – read more TheStandard.com…