Asian airports showed that they could cut charges in the wake of the SARScrisis and airlines are hoping that the trend continues
The SARS outbreak may have been a disaster for the airlines of South-East Asia, but something positive did come out of the crisis. Many governments and airport operators showed their willingness, often for the first time, to help struggling carriers through the tough period by reducing fees. In April, after declaring SARS the region's worst-ever crisis, the Association of Asia Pacific Airlines (AAPA) began calling on airports, air traffic service providers and other industry suppliers to cut their fees. IATA added its voice to the pleas.
"Airports and air traffic management services can and must reduce their charges, rents and other burdens which they impose on the airlines regardless of the fluctuations of the market," said the AAPA as the crisis mounted. "The airline industry in Asia has for many years been at the heart of the Asian economic miracle. In this dire situation its distress must be recognised, its crushing burden shared by those who benefited in the past from its prosperity. Narrow, sectional interests must be put aside to surmount the crisis; long-term vision must be demonstrated by governments in assisting the airlines in their hour of need."
Taiwan leads the way
The calls seem to have worked. Taiwan in mid-April became the first to announce cuts to international airport user charges, by 15% through to the end of September. It also offered domestic airlines other concessions, such as reductions on building and land rentals.
It was followed closely by Singapore, which cut landing charges at Changi International Airport by 30%, through 31 December. This was in addition to a 15% discount announced late last year. Rental charges were also cut by a further 10% at Changi.
Soon after, Hong Kong unveiled a relief package for airport users that primarily covered special rates for long-term parking and the deferral of landing fee and rental payments at Hong Kong International Airport. But the airport was immediately attacked by the AAPA and IATA.
The AAPA described Hong Kong's relief package as "pathetically inadequate". Authorities later bowed to pressure and reduced landing charges by between 10% and 50%, depending on the airline's load factor.
Manila International Airport was another that cut landing charges during the SARS-induced downturn, by 10% between May and July, while Chinese authorities slashed airport landing fees and navigation charges by 20%, also between 1 May and 31 July.
Malaysia's government halved landing charges at Kuala Lumpur International Airport, for one year from late in April, while Seoul's Incheon International Airport cut its fees by 10%. Other airports to cut charges included those at Bangkok and Macau.
Narita finally follows suit
While those airports were quick to reduce charges, IATA put pressure on the operator of Tokyo's Narita International Airport to do its part, calling on it to "end its isolation and join its fellow Asian airports in responding positively to the industry's need to reduce costs". IATA continued to grumble that the eventual measures did not go far enough, but Japanese authorities did eventually unveil a concessions package that covered a 20% reduction in rental charges between June and August on office space, airline lounges and counter space.
For the most part, the concessions offered by airports during the SARS crisis were short-lived, leading airlines to continue their fight for charges to come down permanently. "The situation with regards to airport charges has been and remains unsatisfactory," says AAPA director general Richard Stirland. "The reductions of actual fees during the SARS crisis we of course welcomed, but what they highlighted was that what we were really looking for was not so much just a reduction in fees by them, but assurances that airports are looking at ways of keeping their costs down in the same way that airlines do. This means not cutting charges or cutting staff, but actually looking at working more productively, by doing things in a better way and relating their charges to growth in productivity by the airports."
Stirland adds: "When you've got a captive customer like the airlines and your costs go up, it's all too easy to pass the costs on to your customers."
Source: Airline Business
