Macau's new airline comes under the wings of Beijing

PUBLISHED : Sunday, 21 November, 1993, 12:00am
UPDATED : Sunday, 21 November, 1993, 12:00am

CHINA will acquire a majority stake in Macau's new national airline, Air Macau, to be set up by the end of this year, according to a senior Macau official.

The Chinese Government's aviation arm, the Civil Aviation Administration of China (CAAC), will take a 51 per cent stake in the new airline.

Tap-Air Portugal will have 25 per cent, while Macau Airport Franchise, mainly owned by Macau tycoon Stanley Ho, will hold 19 per cent, with the Macau government taking the remainder, said Jose Manuel Machado, Under-secretary for Transport and Public Works.

However, aviation experts questioned whether the Chinese Government department would take up the commercial deal.

One expert said: ''As a government department, CAAC normally does not have any commercial investment. The administration does not have any aircraft.

''I am not surprised China will join Air Macau, but it is likely to be the Chinese airline instead of a government department.'' Air Macau will be the first national airline in Macau and the airline operator plans to fly throughout the region, including China, Japan, Taiwan, Malaysia, Singapore and Thailand when Macau Airport opens in July 1995.

The construction cost of the airport is 7.3 billion patacas (about HK$7.5 billion). It will service between three and four million passengers a year.

''It is an interesting investment for China if they make the decision based on [the whole country's] strategic development,'' Murray Bailey, research director of Travel Business Analysis said.

''But it is not a good idea if it is purely a business decision,'' he added.

He explained that airlines worldwide were experiencing a sluggish period.

''It is a very bad time to airlines. Investing in an airline is a risky business,'' Mr Bailey said.

He believed that the industry would go through another rough year but recover in 1995.

''However, whether it is a good time to invest in a new airline is another question,'' he added.

He cited Taiwan's Evergreen and South Korea's Asiana airlines, which were set up three years ago, as examples, saying they were making huge losses at present.

Details of the new airline have yet to be released, but the Macau Civil Aviation Authority has said the airline would concentrate on passenger traffic and it would be as large as Dragonair.

The airline is forming a jet fleet, although it will not have Boeing 747s, according to the Authority.