Korfiatis aims to put Macau on the map
Budget airline boss eyes non-gaming tourists
Forget the free drinks, peanuts and meal service, Con Korfiatis is in love with budget airlines.
After setting up budget carrier Jetstar in Singapore in 2004, he succeeded Andrew Pyne last month as chief executive of Viva Macau, the new kid on the block in the gambling enclave's fledgling aviation industry.
Mr Korfiatis, 42, says both he and his new airline are hungry to recruit more staff and buy new aircraft as it tries to wrest market share from long-time monopoly Air Macau. His long-term goal is to put Macau on the map and make people aware that Macau is now more than a gaming city.
In the meantime, he has to break through regulatory barriers in the city, which until December had been solely served by Air Macau. Viva is still trying to get approval to fly to the mainland, expected to be one of the carrier's major routes in the future.
Mr Korfiatis started his airline career at Ansett Airlines, Australia's second-largest airline before its collapse in September 2001. He then joined Qantas Airlines and was appointed chief executive officer of the Australian flag carrier's low-cost carrier Jetstar.
Mr Korfiatis was born in Sydney to parents who emigrated from Greece. He is married with one child and is interested in movies, music, cars and golf.
You were involved in the setting up of Jetstar and now you are at the helm of Viva Macau. It seems like you have a connection with budget airlines. What's the charm of working at a low-cost carrier?
I have been in the aviation industry for 17 years and didn't start at a budget carrier but in a full-service airline.
The main attraction is we try to make travel affordable and allow people to fly more often and to more places. There is a more family feel to working with a budget carrier and more energy.
How will your past experience at Qantas Airlines and Jetstar help you at Viva Macau?
The experience I have gives me an understanding right across the industry. From that perspective, it's a good thing to be here. With the huge population around Macau, geographically it is in a perfect location.
Macau itself is still quite unknown despite all that's going on [with the gaming industry]. We have the potential to make a good return here.
Singapore is a very competitive market as there are several budget airlines there, including Tiger, Jetstar and AirAsia. Is Macau a relatively easier battlefield?
Yes and no. Macau is very much underserved at the moment. There are not many destinations you can fly to directly from Macau. On the negative side, we are breaking what was a traditional monopoly market for air transport. Macau is undergoing a transformation and air transport is one of them. So it is a difference from Singapore.
Can you name some of the challenges there?
Many people come into Macau via land or sea transport. With the number of hotel rooms increasing in the city, these forms of transport will not fulfil the needs. We need to improve quite dramatically.
That seems like an advantage rather than a challenge.
It's a challenge of course. There has been a monopoly airline here focused on a narrow customer base. There are regulatory restrictions, some of them from overseas countries and some from Macau. We need to break through that and we are aggressively doing that. Not long ago there was a batch of new routes allotted to us. We're very excited by that but it's still a very much beginning.
How do you intend to put Macau on the map?
The broad business sector in Macau has a role for us to play as an airline. We need to work together with them and with different operators of the infrastructure in Macau.
Macau will eventually have more hotel rooms than Hong Kong and Singapore. But in terms of transport, it is far behind.
Why is it so far behind?
Macau only had 6,000 to 7,000 hotel rooms 1? to two years ago. That has grown to 13,000 to 14,000 and will surge to over 20,000 to 26,000 rooms in seven years. That level of growth is unprecedented in a city.
Viva is mulling flying to Tokyo, Osaka, Busan, Manila, Ho Chi Minh City and Phuket by the end of the year. It is also eyeing Melbourne and Brisbane. But why doesn't it have plans to fly to the mainland? What are the major obstacles?
The routes you mentioned are virgin routes which means no other airlines are flying there from Macau. The mainland will always be a major market for Macau and we would be interested absolutely in flying there.
Do you have a timetable?
You should be asking the regulatory authorities in Macau about that. We are in discussions with them and we are confident that it will happen in time but to put a timeframe on it, I couldn't tell you.
Viva will fly to Sydney this month with a return ticket selling for around HK$4,000. What is the break-even point for this route?
Our cost structure allows us to maintain a very competitive fare year round on our flights, that's why they call us a low-cost airline. The break-even point really depends on a combination of what fares we sold on particular flights. Our expectation is very high. This is the first long-haul destination directly from Macau to the world. Macau has a small airport which is underutilised and very efficient. So it's not inconvenient for people near Macau to travel to Macau and then fly with us to Sydney.
There are already casinos in Sydney, so why would Australians be interested in flying to Macau?
Macau is transforming into a leisure and conference centre so there is a lot more than gaming. Good shopping, spas, live entertainment, shows, sporting events and nightclubs.
When will Viva start making a profit? Other than scheduled flights, what is the prospect of running charter services to Macau?
We are privately owned so we don't talk about numbers publicly. We hope to be profitable in year two of our operation. Because of the regulatory issues, some of the destinations I've talked about are technically chartered flights. But chartered flights are presold to a particular group and won't be for sale to the general public. Australia is approved as a chartered flights destination but having said that, we will sell through travel agencies in Hong Kong, Macau and the Pearl River Delta region.
Viva plans to increase its fleet size to 15 aircraft from the existing two. What is your staffing plan?
We are in discussions about two additional aircraft this year and two early next year. So we are looking at about four new aircraft a year. When you add an aircraft, you need more staff and cabin crew. So the staff numbers will grow quickly, from 160 with two aircraft to 300 staff by the end of the year.
Andrew Pyne created a very cosy corporate culture within Viva. How would you describe your management style?
Andrew recruited me and he is a large part of the reason for me coming here. It's really a family-like culture. I am very open about working with the staff and it's very informal. Unlike a company that has been set up for years, with bureaucracy and layers of management, we are small and lean.