Aviation sector bolstered

April 8, 2020

Secretary for Transport & Housing Frank Chan:

As for the aviation sector, we have to appreciate that in normal days in the past we have had 200,000 passengers coming in and flying out every day. And for the past week, the number is close to less than 2,000. If you take that as an indicator, then Hong Kong International Airport is down to 1% of its capacity in operation. Therefore, all the airlines, all supporting services companies, retail and dining outlets in the airport are the hardest hit. Of course we can help them with the Employment Support Scheme by providing salary subsidies through the companies to their working staff. 

In addition, we are also offering a subsidy or assistance of another kind. We are offering (assistance) to the repair and maintenance of airplanes. For example, for a big jet we will provide $1 million. While you may think that amount is huge, actually a large plane will require roughly about $60 million to maintain in a year. So $1 million is just peanuts. But that's the (kind of assistance) that we are trying to (offer) and help them as much as we can.

For companies with 100 people or more, we are going to offer them $3 million as assistance. For companies with less than 100 people, we are offering them $1 million.

But after all, all these are minimal I would say and we are looking forward to helping them in more ingenious ways. For example, the Airport Authority is planning to purchase 500,000 air tickets with a view to provide cash flow to the airlines during this very difficult time and to save the tickets for the  future when Hong Kong is going to relaunch, to try to attract travellers coming to Hong Kong and people going out for trips when the pandemic is over.

We are also offering, in a very innovative approach, to purchase supporting facilities in the airport. Because for supporting services companies in the airport, they are running out of cash and the provision of cash flow is very important. Therefore, by purchasing the equipment or hardware from these companies and providing them with cash flow would be very important. At the same time, this facility would still be used at the airport, if there is a need. By the time the airport picks up and resumes normal, these companies would have the right to buy it back.

The Airport Authority is also offering a rent-free period, so that these companies would be relieved for a certain period of time. So we are trying to do whatever we can and trying to help as much as we can.

(To watch the full press conference with sign language interpretation, click here.)

Secretary for Transport & Housing Frank Chan today said subsidies to support the aviation sector have been included in the Government’s $138 billion relief package.

Mr Chan noted that due to the shutdown of international traffic during the COVID-19 pandemic, Hong Kong International Airport was down to 1% of its capacity.

“We have to appreciate that in normal days in the past we have had 200,000 passengers coming in and flying out every day. And for the past week, the number is close to less than 2,000. If you take that as an indicator, then Hong Kong International Airport is down to 1% of its capacity in operation.

"Therefore, all the airlines, all supporting services companies, retail and dining outlets in the airport are the hardest hit. Of course we can help them with the Employment Support Scheme by providing salary subsidies through the companies to their working staff."

Mr Chan said the Government would provide financial relief that is expected to benefit 270 aircraft. A one-off subsidy of $1 million will be provided for every large aircraft registered in Hong Kong and $200,000 for small aircraft.

He added that another relief measure will help aviation support services and cargo facilities operators.

“In addition, we are also offering a subsidy or assistance of another kind. We are offering (assistance) to the repair and maintenance of airplanes. For example, for a big jet we will provide $1 million.

“While you may think that amount is huge, actually a large plane will require roughly about $60 million to maintain in a year. So $1 million is just peanuts. But that is the (kind of assistance) that we are trying to (offer) and help them as much as we can.

“For companies with 100 people or more, we are going to offer them $3 million as assistance. For companies with less than 100 people, we are offering them $1 million."

Mr Chan described innovative alternatives that the Government is working on to get the aviation sector the cash it needs.

”For example, the Airport Authority is planning to purchase 500,000 air tickets with a view to provide cash flow to the airlines during this very difficult time and to save the tickets for the future when Hong Kong is going to relaunch, to try to attract travellers coming to Hong Kong and people going out for trips when the pandemic is over.

“We are also offering, in a very innovative approach, to purchase supporting facilities in the airport. Because for supporting services companies in the airport, they are running out of cash and the provision of cash flow is very important.

“Therefore, by purchasing the equipment or hardware from these companies and providing them with cash flow would be very important. At the same time, this facility would still be used at the airport, if there is a need. By the time the airport picks up and resumes normal, these companies would have the right to buy it back.”

Mr Chan emphasised that the Airport Authority is also doing its part to support its tenants.

“The Airport Authority is also offering a rent-free period, so that these companies would be relieved for a certain period of time. So we are trying to do whatever we can and trying to help as much as we can.”