Monday, January 16, 2017

Jake's View: Private jet owners bemoan shortage of landing slots in Hong Hong - but I say let ‘em moan’; Tell me how big a contribution this kind of convenience brings to our gross domestic product and I might change my opinion

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

 by  Jake Van Der Kamp

There are a few things that the private jet lobby does not tell you about its business when it regularly bemoans the shortage of landing slots in Hong Kong.

The first is that you probably have the wrong impression of the business if you think private jets are owned by rich individuals for the exclusive use of themselves or a few occasional friends whom they might graciously take along for the ride.

They are instead mostly owned by companies formed to operate private jets as a commercial business and, even if owned by individuals, are usually made available by their owners through agents for commercial use when not immediately wanted.

Nor are they all that exclusive. Just search for private jets Hong Kong on whatever digital device you favor and you will find a long list of websites and phone numbers you can contact for a flight on a private jet. It will cost you more than a commercial flight but they are available to everyone.

They are also not so very exclusive once you get on board. You will commonly find yourself sharing the flight you booked with strangers going to the same place.

So what makes a flight on a private jet all that different from a commercial flight and why should our airport give these so-called private jets any special consideration that we do not offer a regular airline?

The private jet lobby, for instance, complains that its members cannot fly in and out whenever they want but must book landing and take-off slots. That’s exactly what we require commercial flights to do. The best times of day are in big demand. Why should private jets be allowed to jump the queue?

It’s a particularly appropriate question as our airport approaches saturation and we are looking at a bill of HK$135 billion for a third runway.

The departure tax to pay for this runway is now set at HK$180 a passenger and the average commercial flight on the runway carries 200 passengers, thus HK$36,000 per departing flight. That would be an appropriate passenger departure fee for private jets. They use just as much runway as commercial flights do.

The private jet lobby also does not tell you that until summer last year the available landing slots granted to private jets were mostly bought by landing slot speculators who then marked up their prices on resale to the actual users.

I grant you this gave the users some flexibility in arrival and departure times. All they had to do was call up the speculator and pay him the price for the slots they wanted.

But the airport authority took a dim view of others making money out of the airport this way. It resolved to grant private operators more slots but required that each be tied to a parking space and could only be used for the specific flight for which it was booked.

This got rid of the speculators. Unfortunately, it also got rid of the flexibility. Personally I think it was a bad move. The airport should itself have taken up the role of the speculator by auctioning these landing slots.

It is an idea I have long favored. It will bring the airport both more income and flexibility in apportioning slots. But it should apply to both private and commercial flights.

The fact is that the real trip on which private jet flights are marketed is the ego trip. It’s a vanity thing. You cannot fly non-stop to Europe and America on them and you can already get commercial flights almost every hour to major destinations in Asia.

Get an upgrade on a commercial flight and you get as much convenience in scheduling and service as on a private jet. You also get a much less bumpy ride.

Where private jets come in handy is getting to more remote resorts or yacht harbours without three changes of flight and long times spent in the waiting lounge.

And now will someone please tell me just how big a contribution this kind of convenience brings to our gross domestic product?

Let ‘em moan.

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