Hong Kong Protests Set United Back $90 Million

The ongoing civil unrest in Hong Kong is having an affect on most, if not all of the carriers flying to the destination. United Airlines is no different, seeing profits hit by $90 million according to the airline.

United Airlines, Hong Kong, Civil Unrest
Its Hong Kong route cost united airlines $90 million in Q4. Photo: United Airlines

The ongoing protests in Hong Kong was a story that ran through the course of 2019. While affecting many airlines, the effects have been varied. Local carriers, such as Hong Kong Airlines, have particularly suffered. Meanwhile, others that may only have one Hong Kong route have been able to offset losses against other routes. As a result, United Airlines today revealed a $90 million hit to profits from the protests.

What do we know?

United Airlines today announced that is has seen a hit to its profits. In the fourth quarter of the last year, October to December, the total hit to the carrier was around $90 million. This very roughly equates to around $1 million per day.

The airline released the figure this morning while announcing its fourth-quarter analysts call. This will take place on the 21st of January, later this month. Here, the airline will outline its costs for Q4 in addition to the full year of 2019.

United Airlines, Hong Kong, Civil Unrest
The costs equate to around $1 million per day. Photo: United Airlines

In its announcement United Airlines said:

“For fourth quarter 2019, the company expects to record a special non-cash impairment charge of $90 million associated with its Hong Kong routes.”

It went on to add: “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.”

Consistent among the industry

The decrease in passenger numbers to Hong Kong has been seen across the industry and certainly isn’t unique to United Airlines. In fact, total passenger numbers traveling through Hong Kong Airport are plummeting.

In mid-December, Simple Flying reported that, for November, Hong Kong Airport served just 5,012,000 passengers. This was down by 16.2% from the previous November. This represented the fourth consecutive month that the airport has seen a fall in passenger numbers. German Airports are also starting to see a decline in passenger numbers in recent months.

Hong Kong Airlines, Unpaid Rent, Lawsuit
Hong Kong Airlines has been hit particularly badly by the fall in passenger numbers. Photo: Getty Images

The effect of the drop in passengers has hit Hong Kong Airlines particularly badly. The carrier has been forced to suspend long-haul routes, store aircraft, and disable its inflight entertainment system. In fact, the civil aviation authority in Hong Kong even threatened it’s air operators’ certificate. Thankfully, the airline was able to come up with the cash necessary to avoid such drastic measures.

Have you flown to Hong Kong recently? Did you notice fewer passengers? Let us know your thoughts in the comments!