CX should be happy
#16
Ambassador, Hong Kong and Macau
Join Date: May 2009
Location: HKG
Programs: Non-top tier Asia Miles member
Posts: 19,801
Flag carriers will be entrenched because they will be the only ones who can get funding.
Legacy contracts?
CX/Swire mismangement?
#17
Join Date: Oct 2016
Posts: 291
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.
#18
Ambassador, Hong Kong and Macau
Join Date: May 2009
Location: HKG
Programs: Non-top tier Asia Miles member
Posts: 19,801
$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.
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.
Last edited by percysmith; Sep 25, 2018 at 9:38 pm
#19
Join Date: Oct 2016
Posts: 291
$141.5b third runway funding is $47b AAHK surplus (read: HK residents' money), $26b construction levy (fair*) and $69b loans and bonds that AAHK have to service (fair*)
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 1/3 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.
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 1/3 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.
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)
#20
Suspended
Join Date: May 2006
Location: HKG
Programs: A3, TK *G; JL JGC; SPG,Hilton Gold
Posts: 9,952
Legacy contracts?
CX/Swire mismangement?
CX/Swire mismangement?
even then, cx’s hedging debicle may be connected to citic ie peking.
and, does cx treat staff the same way me3/china?
can pilots smoke in cockpit like me3/china
#21
Ambassador, Hong Kong and Macau
Join Date: May 2009
Location: HKG
Programs: Non-top tier Asia Miles member
Posts: 19,801
If this results in surplus then distribute it back as a security fee offset/negative air passenger fee.
Last edited by percysmith; Sep 25, 2018 at 10:02 pm
#22
Join Date: Oct 2016
Posts: 291
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.
Last edited by Aus106080; Sep 25, 2018 at 10:03 pm Reason: For amendment
#23
Ambassador, Hong Kong and Macau
Join Date: May 2009
Location: HKG
Programs: Non-top tier Asia Miles member
Posts: 19,801
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.
#24
Join Date: Jan 2011
Posts: 2,345
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.
#25
Join Date: Oct 2016
Posts: 291
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.
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.
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.
#26
Ambassador, Hong Kong and Macau
Join Date: May 2009
Location: HKG
Programs: Non-top tier Asia Miles member
Posts: 19,801
Last edited by percysmith; Sep 26, 2018 at 12:12 am
#27
Join Date: Oct 2016
Posts: 291
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.
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?
#28
Ambassador, Hong Kong and Macau
Join Date: May 2009
Location: HKG
Programs: Non-top tier Asia Miles member
Posts: 19,801
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.
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.
Last edited by percysmith; Sep 26, 2018 at 9:41 am
#29
Join Date: Nov 2017
Location: HKG
Programs: CX, BA
Posts: 69
IMO CX/KA and HKIA are largely influencing each other. When CX/KA does well, HKIA is benefited as a result of that, vice versa. I don’t see why the building of the third runway is subsidizing CX/KA. The third runway is not gonna be used exclusively by CX/KA.
On the subject of CX should be happy, Air Belgium ceases HKG route/TG scales down operation in HKG by giving slot to its smaller subsidiary and cancelling HKGICN route/HX cancelling the Australian route/SAA in financial trouble(?) according to FT/ BA closes HK crew base are more good news to CX.
On the subject of CX should be happy, Air Belgium ceases HKG route/TG scales down operation in HKG by giving slot to its smaller subsidiary and cancelling HKGICN route/HX cancelling the Australian route/SAA in financial trouble(?) according to FT/ BA closes HK crew base are more good news to CX.
#30
Suspended
Join Date: May 2006
Location: HKG
Programs: A3, TK *G; JL JGC; SPG,Hilton Gold
Posts: 9,952
is the argument still over who is state funded? swire is uk based.
hna is backed by a mysterious charity that has all the links w the province of hainan.
airchina is part-privatized from caac
ek and ey is toy money of the sheks.
hna is backed by a mysterious charity that has all the links w the province of hainan.
airchina is part-privatized from caac
ek and ey is toy money of the sheks.