Hong Kong International Airport (HKIA) is to offer steep discounts on landing charges to airlines launching services to new destinations as it prepares to face intense competition from the new airport at Guangzhou in southern China.
The airport authority which operates HKIA says the New Destination Incentive Arrangement (NDIA) is due to take effect on 8 September and will be in place for two years. In the first year a 50% rebate will be given to an airline for flights operated to a new destination while a 25% rebate will be given in the second year.
"New destinations will increase the connectivity of HKIA's home market, the greater Pearl River Delta, to the world, and will further enhance Hong Kong's position as Asia's premier hub," says the airport authority. HKIA is facing fresh competition from new airports in the fast-growing Pearl River Delta region of China and in particular from Guangzhou, where a large new hub airport is due to open early in August.
It is also facing a challenge from nearby Macau airport, which is seeking to lure new business away from HKIA, with a particular focus on emerging low-cost airlines. Malaysia's AirAsia recently started flying to Macau and it says it picked the former Portuguese enclave over the former UK colony of Hong Kong as it offered a better incentives package. Both Macau and Hong Kong are Special Administrative Regions of China that operate with a high degree of autonomy.
Guangzhou's New Baiyun International airport is seen as the biggest threat to HKIA as it is aggressively seeking to market itself as an Asia-Pacific hub for international passenger and cargo operations. The new airport will replace the existing Baiyun International airport in central Guangzhou, which is one of China's largest cities and the base of China Southern Airlines, the country's largest carrier.
FedEx Express is considering setting up a hub operation in the city while more international passenger and cargo carriers have said they are considering adding services.
Source: Airline Business
