Hong Kong International Airport is one of the most profitable airports in the world. Just the past Wednesday, the airport announced a record HK$11.84billions (US$1.46billions) profit. According to South China Morning Post, however, the Airport Authority is levying HK$1.32 per checked bag arriving into Hong Kong starting July 6th, 2018.
Currently, airlines use ground handling companies to handle hold baggage arriving in Hong Kong. The authorities are now looking to outsource the role of putting bags from carts to the carousel, but passing the outsourcing cost to airlines. The Airpot Authority claim that this will ensure faster hold baggage delivery upon arrival.
It is reported that this charge may cost airlines HK$40millions (US$5.1millions) a year. And IATA has been critical of the Airport Authority as they continue to increase the overall cost for airlines to use Hong Kong International Airport. Landing and parking fees have already risen 27% since September 2016, and most airlines are resisting this new fee.
Additional fees are never a welcoming change, and I believe this charge will be fully passed onto travelers arriving into Hong Kong. Personally, I find it pathetic that the Airport Authority is levying this charge when it is making record profit from the airport operations, not to say the short notice of seven days. It is also worth noting they are charging this fee per bag and not by weight.
Also, I am not sure how the airline is going to pass this fee onwards to the passengers. It is anybody’s guess how many bags will travelers check until they arrive for the flight. Will airlines charge you the amount according to the baggage allowance you get? If that is the case I believe the biggest losers will be premium class travelers and those holding elite status, as they have a larger baggage allowance. I do not foresee airlines absorbing this cost as well considering how slim profit margins for airlines are. It should be interesting to see how these fees will affect ticket prices.
In this case, budget airlines are less affected as they seldom offer free checked bags. The biggest losers, in this case, will mostly be the full-service airlines a=such as Cathay Pacific and Cathay Dragon.
However, the fee is extremely low, so it won’t drastically affect anyone’s travel experience. And In terms of the promise of faster baggage arrival at the carousel, only time will tell.