Monday, December 31, 2018

Impact of high airport tax

Dear Tan,

in 1998, Hong Kong opens it’s new airport after 6 years in construction.

The size of the airport is comparable to ours. Unfortunately, Changi T5 will take more than a decade to build and with only an additional runway to the current.

When we decided to rise the airport tax, many airlines have rise their fares. Given that the oil price is now at a higher level and the factor of poor economic factor, many airlines would have chosen to fly elsewhere.

We have always view Bangkok as a main competitive airport, but Bangkok is of a cheaper city and of richer culture to visit than of ours.

Even if the authorities impose a tourist tax. It would not affect their tourism industry as badly as ours.

Hong Kong international airport is now doing expansion, however it serve a different region as ours. This might change when smaller and fuel efficient twin engine plane could now travel a longer range.

We might have thought that we are a premium brand and therefore deserve to charge a higher price.

Over the years, we have always maintain a good relationship with airlines which flies here. I am afraid that if Singapore does not maintain this relationship with their client, we might end up having a huge airport but too few airlines.

I believe that some airlines has reduce their frequency and one has withdrawn the Singapore route. It is time that we get this straight, it is easier to lose a client than to get a new one.


My comment. I have compared airport tax charged by various cities. We are among the highest. A few cities charge airport tax similar to ours, but most cities charges much lower tax.

I share the same concern as Fong.


Anonymous said...

Supply and demand

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