June 18 (NBD) -- Guangzhou Baiyun International Airport Co., Ltd. ("Baiyun Airport", 600004.SH) said last Friday it has received the Notice on Abolition of Policy of Recognition of Refunds from Civil Aviation Development Fund to 3 Listed Airports as Revenue forwarded by the Civil Aviation Administration of China (CAAC).
The Civil Aviation Development Fund, which combines the previous airport construction fee and civil aviation infrastructure construction fund levied on airlines, was created to boost the efficiency of the two funds.
Apart from Baiyun Airport, Beijing Capital International Airport Co., Ltd. ("Capital Airport", 00694.HK) and HNA Infrastructure Company Limited ("HNA Infrastructure", 00357.HK) also made similar announcement on the same day.
The policy will be cancelled upon the expiry of a half-year transition period commencing from May 29, 2018, according to the three listed airports. During the transition period, refunds from the Civil Aviation Development Fund will continue to be recognized as the airports' revenues. Upon the expiry of the transition period, the three listed airports will carry out the same policy of the Civil Aviation Development Fund as other domestic airports.
Regarding the impact of the policy cancellation, Baiyun Airport said the company's refund from the Civil Aviation Development Fund was 698 million yuan (108.5 million U.S. dollars) in 2015 and rose to 777 million yuan (120.8 million U.S. dollars) in 2016, accounting for 12.42 percent and 12.6 percent of the annual revenues, respectively. In 2017, the refund jumped further to 837 million yuan (130.2 million U.S. dollars), taking up 12.38 percent of the year's revenue.
The airport predicted it will receive a refund of 800-850 million yuan (124.4-132.2 million U.S. dollars) from the fund this year.
Capital Airport forecast its annual revenues for 2018 will drop by no more than 120 million yuan (18.7 million U.S. dollars) due to the policy abolition. NBD noticed that, from the 2017 annual report, Capital Airport obtained a refund of 1.22 billion yuan (189.7 million U.S. dollars) last year.
According to HNA Infrastructure's financial statements for the years 2015 to 2017, its refund from the Civil Aviation Development Fund accounted for 17.37 percent, 17.99 percent, and 17.75 percent of the company's total revenues, respectively.