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Bloomberg
United Airlines Holdings Inc is taking a $90 million non-cash charge in the 2019 fourth quarter to account for a steep drop in demand for flights to Hong Kong, which has been roiled by protests against the Chinese government for more than half a year.
Hong Kong International Airport, a major passenger and cargo hub, imposes landing and arrival authorisations, or slots, for carriers operating there — as do several other congested major airports such as New York’s JFK International and London’s Heathrow. These traffic restrictions require airlines to periodically assess the value of their slot portfolios.
“Due to a decrease in demand for the Hong Kong market and the resulting decrease in unit revenue, the company determined that the value of its Hong Kong routes had been fully impaired,†Chicago-based United said in a regulatory filing. In 2016, United took a $412 million charge after US regulators removed slot restrictions at Newark Liberty International Airport, increasing competition at one of United’s hubs.
Visitor arrivals to Hong Kong in November fell 56% from a year earlier, the Hong Kong Tourism Board reported last week, including a 43% year-on-year decline from the US.