Airport Authority Hong Kong (AA) will provide a new round of relief package worth up to HKD2 billion (US$58 million) for the aviation industry, while AA’s top officers will take a voluntary pay cut to address the airport operator’s own cash flow issues.
The AA in a recent statement said the new relief package is meant to provide further support to airlines and aviation support services operators through helping to ease their liquidity pressure.
AA said it will offer to purchase around 500,000 air tickets in advance from the four home-based airlines, namely, Cathay Dragon, Cathay Pacific, Hong Kong Airlines, and HK Express.
The purchase will inject liquidity into the airlines upfront, while the tickets will be given away to global visitors and Hong Kong residents in the future market recovery campaign to be launched when the pandemic is over, it added.
Another relief measure provides an option for aviation support services operators at Hong Kong International Airport (HKIA) to sell their ground services equipment (GSE) to the AA.
The AA will buy the GSE from operators in cash and pay upfront to help improve their cash flow. Operators will also enjoy a rent-free period for using the equipment after the sales. Operators providing services in ramp handling, maintenance, catering and into-plane fuel, among others, may participate in the scheme on a voluntary basis.
“During this difficult time, the AA has been trying its best to support business partners. As an integral part of the aviation industry, the AA is also facing a significant shortfall in revenue because of the traffic plummet. The AA will go to the financial market in the next two months to raise the necessary funds, in order to maintain its own liquidity for funding the airport operation and the committed capital projects. The loan will also be used to finance the new relief package,” a spokesperson for the AA said.
The new package is put together by the AA as it joins forces with the government to support the stricken aviation industry further.
To date the AA has introduced altogether four rounds of relief measures amounting to a total of HKD4.6 billion for supporting the airport community.
As this developed, the AA’s chief executive officer and executive directors will take a voluntary pay cut of 20% for six months starting from April this year.
“The entire aviation industry is facing unprecedented difficulties because of the COVID-19 pandemic. The AA is also seriously impacted by a significant revenue shortfall because of the plummet in passenger traffic. While we are taking active measures to address the cash flow issues of the AA, all six Executive Directors and I, on our own initiative, will take a pay cut, as our message to the entire airport community that we share the sufferings everyone is going through, and that we are all in it together,” said Fred Lam, CEO of the AA.
This exercise does not include chairman Jack So as he has donated all his chairman’s remuneration to AA staff’s children scholarship since taking up his post.
Photo courtesy of HKIA
