If HNA is subsidised, why is it still in so much hot water? Certainly not a Too Big To Fail institution.

Goodness. If startup airlines can't be fringe-financed, that is an enormous barrier to entry.
Flag carriers will be entrenched because they will be the only ones who can get funding.


Legacy contracts?
CX/Swire mismangement?

how third runway subsides CX/KA?
and also, how the subsidy only target to.CX /KA but not other airlines?

From my point of view, third runway is funded by airport revenue and additional charged imposed to airlines and passenger.

$141.5b third runway funding is $47b AAHK surplus (read: HK residents' money that should've been returned to Consolidated Surplus), $26b construction levy (fair*) and $69b loans and bonds that AAHK have to service (fair*) https://www.scmp.com/news/hong-kong/...n-retail-bonds

The 47b taking from surplus is a subsidy by the HKSAR.

As for the beneficiary, who would benefit (be stopped from growing) if the third runway was not built? CX/KA's transit business more than O&D business.
Of course HX's transit business will suffer too but probably at least it'd be 2/3s smaller.

* one extreme argument during the Third Runway debate was if CX wanted the runway so badly it can build it itself; however I would admit this is perhaps a little infeasible for any air carrier except PG to do so I accept a governmetn authority doing it on a user-pays basis.

Where does the AAHK surplus come from? It is AAHK revenue and it comes from all airport user. Cx group undoubtedly is the biggest airport user and it shares the largest part of that.
AAHK will finance around half of them by debt and those bonds and loans finally need to be settled by AAhk future reveune and levy also. IF CX continue to be the dominant player in the future, CX will continue to contribute the largest part of funding in the future.

if third runway is not built, CX would be benefit in certain extent as CX group control arounf half of the existing slot. ( Therefore,BA oppose LHR third runway as BA think it is too expensive)

Prior passenger use was within existing capacity. As resident/taxpayer I don't see why this money is not Consolidated Surplus except for the fact AAHK hoarded it and HKSARG want to skirt around Legco appropriation so didn't distribute it.

That's another part I object to. I think it slots should be tendered rather than hogged.
If this results in surplus then distribute it back as a security fee offset/negative air passenger fee.

There are some common mechanisms for slot allocation. However, I do not see any of them will deprive the current user right except the user give up the slot.

And most importantly, third runway program is a subsidy of CX group or any other Airlines. Over half of the construction is funded by current users (the debt party is finally settled by future users) . It is right that third runway will create the room for CX and other airlines to grow. However, they are paying for that now.
How you see AAhk revenue will not affect that third runways is NOT a subsidy programs.

I can also argue that over half of the ME3/PRC3 costs are picked up by real passengers, too.

The way I see it is 1/3 of the new runway costs are picked up by the taxpayer and >50% (up to 70% because the incremental capacity is being used to service transit) of those costs will benefit CX/KA.

Oh, don't get me wrong - I totally agree with your above point. I just mean that when the parent company of HX is in such political and financial turmoil, it is hard to imagine them being a healthy, long term, and viable challenger to CX. I would love to see them sold to a more solid parent company - SHK? CK? - so they have a clear strategy and direction, and can slowly build towards the goal.

I do not see airport revenue can treat as taxpayer money
1)airport is not always gererating revenue and can suffer loss.
2) if airport revenue is tax payer money, reduction of airport charge to attract business (which is common now) will become using taxpayers money to subsidze airlines. Normal business behavior will become political issue.
3) Airport use this own reserve for own development is a normal business behavior.
CX maybe one of the potential beneficial but it does not mean subsidy.

i guess you can study the term- subsidy in the economic class again, that's it.

If the airport is a private operator (https://en.wikipedia.org/wiki/Sydney...rt_Corporation / https://en.wikipedia.org/wiki/Heathrow_Airport_Holdings ) then I'd agree. Not the case for AAHK.

Not really common around the world, even in the developed countries.
Hong kong airport used to offer some incentive programs in the past like landing charge reduction for new destination.
During SARS period, airport reduced the landing charge and rent.
Do you think it is kind of subsidy by taxpayer?
Or the increase of landing charge or rent but less than the inflation rate, do you think it is subsidy?

I was looking at Japanese airports too (thinking about Jetstar Japan and Airasia Japan), thinking they'd all be Govt controlled. But I was wrong http://www.kansai-airports.co.jp/en/...aiairports.pdf

It's the usage of Consolidated Surplus coupled with anti-competitive policies that makes it a subsidy.

I have no idea how Singapore funds its airport expansion, they could have funded it out of Singapore Consolidated Surplus or Temasek for all I care. But they let an Australian airline set up shop there.