Despite the difficulties, mainly related to the small domestic market (and the overwhelming competition from Hong Kong), Air Macau managed to make its own path in these 25 years
MB November 2020 Special Report | Getting in and out
When it comes to taking stock of these 25 years, the voices heard by Macau Business are in agreement: Air Macau has made important contributions to the tourism sector and to increase accessibility to Macau.
One of the most attentive, and sometimes critical, deputies to the role played by the airline is Si Ka Lon.
To Macau Business, the parliamentarian recalls that “since its establishment, Air Macau has maintained the characteristics of safe flight and high-quality service. It has become a solid foundation for the Air Macau brand.”
Looking at what has been achieved in this quarter of a century, Si Ka Lon understands: “Air Macau has successfully covered both sides of the Taiwan Strait, Southeast Asia, dozens of cities in Mainland China, and have achieved good results. I am delighted to witness the changes over the years. The achievements of the past 25 years are highly appreciated and recognized.”
Ku Weng Keong, Chairman of Council of The Chartered Institute of Logistics and Transport in Macau, also has an optimistic perspective: “In the past 25 years, Air Macau has played an important role in promoting Macau’s tourism on top of safely transporting regional tourists and residents to and from other cities.”
Mr Ku, however, points out: “Air Macau it may not be as large in scale as its regional counterparts, mainly due to the fact that it’s operating in a smaller size domestic market and still growing its international base of travellers.”
In the opinion of local Tourism office: “Air Macau also played a relevant role over the last two decades, both contributing to promote the city and developing a network of routes to Mainland China and a diversity of markets in the region. MGTO has partnered with Air Macau all along to promote tourism flows to the city, especially targeting destinations the airline flies to, creating a strong partnership for the last 25 years.”
Macau Business also questioned the Macau International Airport Company about the relationship with its main tenant. And the answer couldn’t be more exciting: “The relationship between Macau International Airport (MIA) and Air Macau is just like the Chinese saying: ‘all birds pay homage to the phoenix’. MIA provides a platform and service for airlines and sub-contractors to provide service to passengers and customers. Therefore, MIA has lots of ‘birds’ coming onto this platform to have diversified flights and services. During the COVID-19 pandemic, Air Macau creates good connection with Mainland and Taiwan areas.”
And it was because of COVID-19, precisely, that the Government decided to allocate another three years of exclusive concession to Air Macau, after announcing the end of the monopoly (see text on these pages).
“In the future, operating without the exclusive concession, I believe that they will provide a better service and flight experience under the competition from the market,” predicts Ku Weng Keong.
Si Ka Lon also shares this view: “I believe that it will have a positive effect on maintaining the stability of the Macau air transport industry. Therefore, I believe that the government and Air Macau extended a three-year initiative that can better open the concession in the future and promote Macau Airport to become another essential aviation hub in the Greater Bay Area,” adds the lawmaker.
The Chairman of Council of The Chartered Institute of Logistics and Transport in Macau points out one more argument: “The opening of the HZMB may have an impact, no matter directly or indirectly, to the need for flights which connect to Macau from the competition of the Hong Kong International Airport, especially for the airline in Macau – Air Macau. Thus, beside considering the local needs, Air Macau should also think about the needs of the travellers from the GBA market, open new routes for connecting them to the world, and contribute to the GBA’s tourism industry.”
No new obligations in these 3 years
In 2018 it was decided that Air Macau would not continue as a monopolist of air traffic rights, and some months later the Government informed Air Macau that their exclusive right will be not extended after 2020.
Meanwhile, the COVID-19 pandemic came and in May of this year, the Government of Ho Iat Seng reversed its decision, granting Air Macau another three years of monopoly or, “until the date on which the new regime for the competitive operation of the concessioned activities comes into force, if this happens during that period … to maintain the stability of the industry operations currently affected by the outbreak.”
The news was not well received by all sectors in Macau.
In the Legislative Assembly, several deputies pulled the ears to the company (“The other airlines have better services. Air Macau fails to comply with the minimums. Flights are always late on the plane, they do not give food – this is a shame,” said Mak Soi Kun). There were even those who urged the Government to ask Air Macau for more for its three-year bonus. “Can we demand a little more from Air Macau?” asked the usually discreet Wang Sai Man.
The addendum to the Public Air Transport Service Concession Agreement does not include new requirements for the company.
The future and COVID-19
“As a base airline, Air Macau will continue to uphold its mission of ‘rooted in Macau and serve Macau’ and devote its resources to implementing its national strategy. In the future, Air Macau will further expand its network coverage on the premise of supporting the development of Macau’s economy and tourism and build a convenient air bridge for Mainland and Macau to promote the ‘One Belt, One Road’ strategy. At the same time, we should be a promoter of Macau’s economic diversification and help Macau SAR government to build Macau into a world tourism, leisure centre and a platform for exchanges between China and Portugal,” according to a written answer sent by Air Macau to Macau Business.
The carrier’s business volume fell by 98 per cent in the first half and revenues fell by around 96 per cent.
Liao Hanxi, deputy general manager of Air Macau, revealed that until September, the occupancy rate was around 20 per cent, and admitted that the company “never imagined that the impact of the pandemic could last that long.” “This is Air Macau’s biggest challenge since its founding 26 years ago; however, we are resisting, waiting for the changes,” he said.
At the beginning of the pandemic, the consultant “OAG Aviation Worldwide” warned that Air Macau would be the air carrier that would most suffer from the impact of COVID-19 on trips in the context of Asia, since it has the highest proportion of capacity of routes linked to cities Chinese.