HONG KONG: Passengers and airlines should not have to be taxed to pay for the construction of Chek Lap Kok’s third runway, a former Cathay Pacific chief executive has said, triggering fresh debate on the issue of airport funding.
Tony Tyler, the director general of the International Air Transport Association (IATA), said a 10 per cent increase in user charges could reduce passenger numbers by 80,000 and put 600 jobs at risk. The airport welcomed nearly 64 million passengers last year, supporting 64,000 jobs.
“We are not asking for anyone to foot the bill for our growth. Airlines would pay for the infrastructure – through increased volumes, not increased charges,” Tyler said.
IATA said the airport’s HK$7.8 billion pre-tax profit in the last financial year, and minimal debt of just 10 per cent of total capital, demonstrated its advantageous funding situation.
Tyler said he had already communicated IATA’s numbers and thoughts to the government and the Airport Authority. He said he looked forward to further discussions with both parties.
The Airport Authority would not comment on expansion funding while it was submitting its proposal to the government. The Transport and Housing Bureau said it was studying the Authority’s recommendations and also declined to comment.
Cathay Pacific boss Ivan Chu Kwok-leung backed Tyler, and urged the Airport Authority not to make passengers foot the bill for the runway, expected to be HK$136 billion.
Chau Kwong-wing from the University of Hong Kong’s Department of Real Estate and Construction, said: “If there is a real need to build the third runway due to anticipated demand, the investment risk is minimal. It would be reasonable for the government to take the risk so that it will be a win-win-win solution for the government, current and future users.”
Legco transport panel chairman Michael Tien Puk-sun said it wouldn’t be fair to tap government reserves because not everyone flies. “It really should be funded by air travellers,” said Tien, although he agreed taxpayers indirectly benefited from the airport’s economic contribution.
However Dr Law Cheung-kwok, from the Aviation Policy and Research Centre at Chinese University, said the cost of expansion to be shared by existing government airport dividends, the airport’s cash flow, loans and a passenger levy. He said the Airport Authority and the government had “supreme creditworthiness, and a very strong financial position to support borrowing and syndicated bonds”.
