As Asia Pacific airlines continue to be battered by a plunge in demand for air travel due to the Severe Acute Respiratory Syndrome (SARS) outbreak, governments have begun to offer emergency assistance.
But IATA and the Association of Asia Pacific Airlines (AAPA), which represents 17 airlines in the region, want more. They are calling on Hong Kong to offer more concessions to airport users, and other governments, such as Japan's, to follow others in cutting charges.
Taiwan was the first to announce a relief package in mid-April in the form of a 15% reduction in airport landing charges, and cuts to building and land rental charges. Singapore quickly followed suit, cutting landing charges at Changi airport by another 30% and airport rental charges by a further 10%. The cuts come in addition to a 15% discount on landing charges and a 15% reduction on rentals announced late last year. Malaysia then followed by cutting charges at Kuala Lumpur International Airport by 50% for one year.
Those moves were applauded by IATA and the AAPA, but the two groups were not so kind to Hong Kong when the territory unveiled its own concessions in April. The Hong Kong Airport Authority's package primarily covers special rates for long-term parking at Hong Kong International Airport, and the deferment of landing-fee and rental payments.
The AAPA says that "naturally, in the acute circumstances, any sort of concession is welcome, but a mere deferral of payment for 10 months is hardly significant". Director general Richard Stirland added that the package was "pathetically inadequate". IATA called Hong Kong's concessions "disappointing". Director general Giovanni Bisignani said that the package was one of "half measures" and "nowhere near the relief needed for the airlines".
The AAPA has said the SARS outbreak poses the gravest threat ever to airlines in the region. Although the virus has spread to countries outside the region, such as Canada, the airlines of Asia Pacific have been most affected by a sharp drop in demand within the region and for long-haul travel through affected hubs.
Some carriers in SARS-affected areas such as Hong Kong's Cathay Pacific Airways and Dragonair, and Singapore Airlines (SIA), are suffering particularly badly. Cathay has cut more than 40% of its services, Dragonair more than 50% and SIA nearly 30%. Several airlines have also deferred deliveries of aircraft on firm order with Airbus and Boeing.
While there are signs that some are starting to bring SARS under control, AAPA's Stirland notes: "The containment of the SARS epidemic by health authorities in South-East Asia is not the end of a crisis for the airlines, it is merely the end of the beginning. In May, member airlines of the association are cancelling over 1,150 flights per week, most of which are on the bread-and-butter routes in the Asia Pacific region."
It is also too early to say when there will be a recovery. "The airlines are bleeding cash on a daily basis; if the whole SARS episode went away tomorrow, it would be months before passenger demand picked up and the industry restored to its former health," says Stirland.
Japanese carriers have meanwhile requested government aid in the form of low-interest loans, while IATA is demanding that user charges be cut at Tokyo's Narita airport, which it says are the highest in the world. n
NICHOLAS IONIDES SINGAPORE
Source: Airline Business
