Date
25 July 2017
Hong Kong could adopt a tiered model for the planned special levy on departing air passengers, according to a report. Photo: Bloomberg
Hong Kong could adopt a tiered model for the planned special levy on departing air passengers, according to a report. Photo: Bloomberg

AA said to mull tiered special levy to finance new runway

Hong Kong’s special levy on air passengers to finance the construction of the third airport runway could vary depending on the flight class of the departing passengers and the distance they fly, Apple Daily reported, citing a source familiar with the matter.

The Airport Authority (AA) had previously proposed to charge each departing passenger a fixed infrastructure levy of HK$180 (US$23.2) for eight years through 2023 if construction of the new runway begins next year.

But the proposal has been questioned by the government and the public as they felt that the fee is too high.

The new runway project is expected to cost about HK$141.5 billion.

After a recent meeting with representatives from the tourism industry, AA has in principle agreed to their suggestions to set the levy in a tiered structure based on flight class and distance, Apple Daily cited its source as saying.

According to the suggestions, those who travel in first or business class would be charged HK$180 regardless of the distance they fly.

A HK$160 fee was proposed for long-haul economy, while passengers flying economy on short-haul routes would see a levy in the range of HK$100 to HK$120.

Definitions of long-haul and short-haul will be based on how the Civil Aviation Department sets fuel surcharges.

An AA spokesman said the authority is still evaluating the financing plans, including the special passenger levy.

The financial consultants hired by AA are reviewing the suggestions and are expected to come up with a figure on the planned levy by end-July before taking it to a board discussion and then submitting it to the Executive Council for approval, the spokesman said.

The process will take one to two months, he said.

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TL/AC/RC

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