Sunday, January 15, 2017

Businesses consider selling private jets due to lack of landing slots at Hong Kong International Airport: Companies still frustrated at being unable to use jets, despite government measures introduced last summer

A lack of landing slots for private jets at Hong Kong International Airport is harming business and has prompted at least two local companies to sell their aircraft, according to an industry veteran.

Despite government measures, introduced last summer, aimed at bolstering the business jet market by providing more take-off and landing slots, companies are still “frustrated” with being unable to use their jets when needed.

Industry veteran Jeffrey Lowe, formerly with aircraft makers Gulfstream and Bombardier, told the Post that two major global firms based out of Hong Kong have approached his company to assist in the sale of their private jets.

Lowe, the managing director of Hong Kong business jet consultancy Asian Sky Group, said problems stemmed from business jets being unable to secure parking rights, take-off or landing slots at Hong Kong International Airport (HKIA). With limited slots available, he said, demand exceeds supply, and priority is given to commercial passenger and cargo flights.

“The frustration level has gotten to the point where businesses feel they can’t make use of the jets anymore, not effectively,” Lowe said.

“When they can’t get slots, can’t get parking, they sell their aircraft,I don’t think it is too much of a stretch – this chairman with this business tool that he uses to grow his business and be competitive, is essentially leaving Hong Kong,” he said, speaking on behalf of his unnamed clients.

Last summer the government introduced measures to prop up the sector including giving more take-off and landing rights to business jets. The creation of a “one-stop shop” was introduced, making it easier and more attractive for operators to fly, land and park in Hong Kong – making aircraft book a runway slot in combination with a parking space and airport ground handling. If either one is not confirmed, a flight booking will be rejected, potentially wasting an unused slot.

The measures are said to have had little effect as the airport’s two runways reached their daily limit of the number of planes it can handle.

Hong Kong billionaire Michael Kadoorie, chairman of operator Metrojet, speaking to the Post last month at an industry gala, said the sector was “in a no man’s land” with slots at HKIA difficult to obtain and the mainland’s business jet sector “not at its best”.

“There are many challenges but if you’re telling me the people of Hong Kong haven’t met those challenges in every field, not just aviation, I would say you were wrong. They have met every challenge. It’s only a matter of time,” he said, predicting the industry’s fortunes would rebound.

The number of business jet flights slumped to 8,845 flights, down 14.7 per cent in the 12 months to November 2016, according to the Airport Authority, which runs HKIA.

The introduction of a new air traffic control system in Hong Kong, which led to a 7 per cent reduction in flights across commercial and business jets in November, added to the woes for the sector as the limited number of flight rights was squeezed further.

Simon Li Tin-chui, the head of the Civil Aviation Department (CAD) and a guest of honour at the gala, called for patience for the government-led measures to bear fruit.

In comments to the Post, he warned: “In a congested airport, this kind of challenge won’t go away.”

He also used the same phrase said by Kadoorie, a “matter of time”, expressing confidence the challenges faced by the business aviation community could be overcome.

“[Users] have to get used to working with the new system. I don’t hear any negative comments from them,” Li said, adding that the third runway – to be built by 2023 – would provide the necessary capacity for business jet users.

The CAD will meet with the business aviation industry in January to make further changes to boost the sector.

A spokeswoman from the CAD said feedback from the business aviation industry had been “generally positive.”


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