Hong Kong International Airport Closes Entire Concourse Due To Weakened Traffic Demand, Hongkong Airlines To Be Carved Up?

Hong Kong International Airport has taken an unsual step and decided to close down an entire concourse, housed in their midfield Terminal that was opened less than 5 years ago as traffic slumps.

Located in the middle of HKIA, the futuristic, rectangular building, connected by 20 jet bridges, opened in 2015 at a cost of HK$10 billion and is currently a giant parking lot as roughly half of the facility is used to position aircraft not currently in service.

I almost can’t hear the word anymore. Coronavirus here, COVID-19 there but of course this latest measure by HKIA is intertwined with the outbreak as well as passenger demand for travel from/to Hong Kong and mainland China collapsed. It is however not the only culprit here.

The main tenant of the soon idle concourse is the ailing Hong Kong Airlines, which has slashed the number of daily flights it operates from 40 to 15 and it’s parent company HNA is in the process of being taken over by the state, in other words nationalization. Hong Kong Airlines would then be carved up between the three state owned Chinese carriers Air China, China Eastern and China Southern.

Bleak prospects not only for Hong Kong Airlines employees but also the airport which has excess terminal space on hand for the time being.

As the South China Morning Post (access here) reported today the

Hong Kong International Airport is preparing to consolidate all flights into the main terminal building, mothballing a newer concourse that sits between the two runways, as passenger flights into and out of the city drop by two-thirds.

The Airport Authority will seek to temporarily close the building – known as the midfield concourse – though no final decision has been reached as discussions with affected stakeholders, such as retailers, are ongoing according to sources. But many key facilities have already started relocating services into the main terminal building. …

Located in the middle of HKIA, the futuristic, rectangular building, connected by 20 jet bridges, opened in 2015 at a cost of HK$10 billion to cater for the surging demand for flights around the region. About half of the facility is now being used to park idle jets. …

The main tenant of the concourse is the ailing Hong Kong Airlines, which has slashed the number of daily flights it operates from 40 to 15 and on Wednesday announced lay-offs of 170 people as part of a wider cutback of 400 staff.

Hong Kong Airlines, backed by the HNA Group, had 14 departures scheduled from Hong Kong on Thursday, however, it is shrinking so much it is now the smallest local airline.

Whether Hong Kong Airlines can continue to be operated is a growing concern by different controlling shareholders.

On Tuesday, HKA closed its flagship Club Autus airport lounge at the midfield concourse “until further notice” and its transit passenger facilities were moved to the main terminal. …

The daily number of passenger flights flying in and out of Hong Kong has dropped from 1,050 to around 340, with more flight cuts expected in the coming weeks. On Wednesday, HKIA handled 160 departing passenger flights, possibly the lowest since the 2003 outbreak of Severe acute respiratory syndrome (Sars), when air travel in and out of Hong Kong all but stopped.

And Hongkong Airlines isn’t the only carrier in trouble as we have covered in recent months:

Last week, airport officials in Hong Kong mothballed a smaller terminal annex, the north satellite concourse, which has space for eight narrowbody jets, as the Cathay Pacific Group cuts to its capacity by 30 per cent up to the end of March.

Hong Kong is facing multiple problems at the same time. Not only the Coronavirus outbreak and the desolate financial situation of Hongkong Airlines but also pro-democracy protests that have gripped the airport in 2019 were bad for business and resulted in the airport closed several times.

Conclusion

Hong Kong as a city will bounce back and no doubt HKIA will also need the terminal space again in the future. Airports always have too little space instead of too much, however Hong Kong has a special disposition due to the cities location and exposure to political and regional influence.

As mentioned in the article during previous outbreaks such as SARS and H5N1 Bird Flu, Hong Kong has always born the brunt of it. The dense population and outdoor/indoor markets that contain livestock make the city extremely vulnerable. Though it’s health system has so far managed to battle previous outbreak in an efficient and competent manner.