Special Report – “I am optimistic about the transportation development” 

Professor Tammy Ku (Ku Kei Ieng) has a Master of Business Administration in Aviation Management and she obtained various certificates from International Air Transport Association (IATA) and Airbus related to airport and airlines operations and HKCAD Aviation Academy. Lecturer at Macau Institute for Tourism Studies, Doctoral of Hospitality and Tourism Management, she is one of the leading experts in the contribution that aviation can make to tourism in Macau. 

MB November 2020 Special Report | Getting in and out

In your opinion, what contribution has the airline sector made to Macau’s tourism development? Can this sector help Macau to become an effective World Center of Tourism and Leisure or is more needed? 

Tammy Ku – Given air transportation development, the earliest function of Macau International Airport was perceived to be the transfer point between Mainland China and Taiwan. After the cross-strait flights were established in 2006, Macau International Airport was transformed to develop more routes to other cities in China and Southeast Asia. More point to point connections was established after the liberalization of the gaming industry, and significant development was found in the sectors between Asia and Southeast Asia. The Macau International Airport does demonstrate its functional role of transport in promoting destination development, contributing to bringing in movements between the nodes and providing connectivity among those nodes. The air transport in Macau SAR does improve connectivity and accessibility for tourism. However, we should also note the balance of both outbound and inbound movements to have the same equal effects, and one should not be more massive than the other. Maintaining the balance of the attractiveness of both inbound and outbound travel is vital to the sustainability of air transportation development.   

Given the question, whether this sector helps Macau SAR to become an effective World Center of Tourism and Leisure?  I believe it should be more appropriate to address transportation as Intermodal passenger transport (which is the combination of different modes of transport in a journey) to develop Macau SAR as the World Center of Tourism and Leisure. Intermodal transportation is more suitable for Macau SAR to enhance Macau SAR connectivity, flexibility and cost-effective operations to be connected to the Greater Bay and the world to coop with our country’s development blueprint.. 

How do you rate/assess Air Macau’s 25 years? Does the existence of an exclusive concession have more advantages or disadvantages?  

Tammy Ku – Air Macau Company Limited has been providing a closer connection between Macau SAR and mainland China. They also established routes to popular destinations in Asia and Southeast Asia. However, interline traffic connection needed to be strengthened especially with Air China. They have been developing local aviation talents and successfully organised their cadet pilot programme. Further initiatives are expected to have more collaboration with local higher education to develop management trainee to allow the local students and mainland students to participate.  

Exclusive concession supports and allows local airlines to develop their air network especially some destinations which require further support to transform the market from latent demand into actual demand.  Exclusive concession in terms of the duration should grant the rights of the government to review based on airlines performance. Many countries’ governments are supporting and protecting their aviation market to a certain extent by using various means like an exclusive concession, freedom of air and slots control.   

Other aviation companies 

Over the years, several attempts have been made to create other aviation companies in Macau, but none have been successful so far. Macau needs more airlines? 

Tammy Ku – In the present situation, it is challenging to start up a new local registered airline without any affiliation. In the commercial airline business, everything is in alignment with cost-effectiveness. Managing airlines and operating the airline business is deemed to be the most complex among the tourism sectors as they share similar tourism product characteristics like service intangibility, service perishability, and service inseparability.  

Airlines operations count on the penny, and there are required hard work of the company as a whole. Airline’s business needed strong financial support. Some airlines failed in Macau SAR and Hong Kong SAR mainly due to their fuel hedging, network planning, fleet planning, and cost control. If airlines place hefty portions in the amount of cost and efforts to excel the service outcome, however, the cost of operations did not reach the break-even margin of the operations, the airlines cannot sustain.  

Macau International Airport is limited by not its geographical location with nearby airports but very complex and limited airspace in flight operations. The complexity is not about the geographic location, infrastructure, or the transport market but the airspace policies. With the GBA initiatives, GBA regional government together with the Civil Aviation Authority can study and restructure the airspace arrangement, airspace policy, especially the lower-altitude airspace for GBA aviation operators’ mutual benefits.  

Is there, in your view, excessive dependence on HK airport, and how could it be mitigated? 

Tammy Ku –Air transport networks can be in the arrangement of overlap, compete, or complement each other. I will view the air transport networks from the nodes of both Macau International Airport and Hong Kong International Airport complimentary intermodal connections. Furthermore, the intermodal transport networks should be in a holistic approach as intermodal transport hubs at Greater Bay with each city complementing each other. Macau International Airport should focus on developing its niche by positioning itself on both the current routes, mainland China, Asia markets, and South East Asia markets. The copy and paste models air transport operations from Hong Kong International Airport to Macau International Airport may not be feasible.  

Hong Kong International Airport is always in consideration because of the reliability of flights, services, schedule flexibility, and cost. Therefore, the foreign budget airlines operating to Macau International Airport using the 3rd and 4th freedom rights can sustain the growth of the passenger market that are more price-sensitive and time-sensitive towards their selection of airport.  There are also other groups of passengers who prefer better in-flight entertainment and in-flight catering tends to select Hong Kong International Airport.  A group of passengers decides Macau International Airport as they purchase in advance and are locked up by the service providers to enjoy the early bird rate. At present, the  Hong Kong International Airport acts as complementarity and at the same time couples of overlap routes brought into competition due to consumer behavior because of service provided during the pre-departure and in-flight. 

“The transportation network in Macau SAR should focus on the big picture to connect and develop following the existing infrastructure to increase the connections based on current development with the interconnections of various nodes. Macau International Airport should create its niches, and it is not feasible to copy the hub and spoke operations of Hong Kong International Airport.  However, clustering of the GBA airports will be beneficial for mutual development” – Tammy Ku 

General or executive aviation 

There are lawmakers in Macau who argue that Macau International Airport should specialise, for example in executive aviation, as it will always be small compared to HK. What is your perspective? 

Tammy Ku – General aviation and helicopter services are also crucial in the contribution to the Chinese economy. General Aviation will be the blue ocean market and should be expanded in response to the GBA development. Some areas should be reserved near Pac On or the region at zone E to allow the flexibility in aviation development and growth.  The seamless intermodal transport terminal should be constructed or transform the Taipa Ferry Terminal for a seamless connection with the Terminal 2 at Macau International Airport, the coach, train, and rail.   

At present, there are 2 fixed-base operators (FBOs) in Macau SARs, 1 FBO in Hong Kong International Airport, and 12 FBOs in Mainland China. The FBOs are providing 24/7 customer services with VIP and business amenities able for onsite customs and immigration clearance.  

The General Aviation can provide faster and exclusive tailored services for high-end markets to connect the cities at GBA and mainland China. The general aviation business is expected to grow in China’s market, whether Macau SAR can take part lies in terms of infrastructure planning.  

Do you think that the implementation of the GBA plan will solve Macau’s accessibility needs (in general and in aviation in particular)? 

Tammy Ku – The transport terminals like airports have a supplier and user function; the GBA plan enhances the airport attractiveness to attract foreigner carriers to operate from their origins to the airports located within the GBA networks.  The airport is the geographically fixed infrastructure for an airport when the terminals reach its economies of scales and scope, do our GBA networks can withstand the interface with other forms of infrastructure which include the surface access and the air traffic control (airspace) as one actor action will affect other actors within GBA networks. Macau International Airport can act as a complementarity to other hub airports at GBA and develop a modal shift among different modes of transport in the GBA networks for mutual benefits. In the traditional approach, the modal shift occurs when a particular mode of transportation or the same mode of transport at GBA indicates a significant comparative advantage on cost, capacity, schedule, flexibility, or reliability.  

For GBA to become the leader in business geography in the world and as the tourism hotspot, collaboration in policies and planning within GBA core cities are fundamental. Moreover, transport planning should be taken in advance before another infrastructure is planned and implemented. Logistics arrangement in traffic flows creates opportunities for business entities under a well-constructed transport network. However, suppose another infrastructure comes before transportation. In that case, negative impacts such as congestion and delays will tarnish the confidence level of our investors and tourists and slow down the growth of economies of scale at the GBA. 

Transportation, transportation, and transportation are the catalysts to leverage opportunities arising from the GBA offered by our Central Government to facilitate economic integration and clustering airports for their strengths. And of course, other challenges like systems, tax regimes, currencies, and customs can be resolved with GBA government coordination to achieve common goals for innovation technology, e-commerce activity which requires higher connectivity and accessibility. Thus, I am optimistic about the transportation development in Macau SAR.

Non-Chinese employees 

 “Airlines should continually review with ground handling company about their services. For example, at Macau International’s current check-in area,  the current approach of adopting the standard check-in did not help to enforce better customer services; however, passengers observed degradation in services. The problem is not about the process itself, but the current setting with the baggage drop area cannot achieve the quality services standards, especially in effectiveness and efficiency. From the observations at the check-in areas passengers comment on long check-in time and the ground handling check-in staff ability to read their passports in Chinese as some service counters check-in are handled by expatriate non-Chinese employees and not able to communicate in Cantonese or Mandarin,” state Tammy Ku to macau Business. 

Read more | Special Report – GBA looking for Macau