Bumpy runway ahead for Viva Macau

Viva Macau, the budget airline that was grounded on Friday after running out of fuel, says it wants to take to the air again this Friday.

The cash-strapped carrier is in for a bumpy ride, however, as it scrambles to issue refunds for air tickets and meet other claims that may arise from the cancellation of its flights over the weekend.

Some passengers say they have lost faith in the airline - which has a blemished record for punctuality - and are unlikely to fly with it again.

Meanwhile, the industry is sceptical about the company being able to fulfil its pledge to make the refunds, which could cost tens of millions of dollars.

In the carrier's first public announcement since its planes stopped flying on Friday, chief executive Reg Macdonald said yesterday: 'Viva Macau was deeply surprised to learn that our air operation certificate was revoked without any prior notice. We are continuing our communication with all parties to seek a solution.'

The airline's website finally stopped providing a ticketing service yesterday after government officials said it could amount to fraud.

Macau's Civil Aviation Authority ordered flag carrier Air Macau to terminate the licensee's operating contract on Sunday after finding the budget airline 'extremely unhelpful' and 'irresponsible'.

'It failed even to provide us with a passenger list when the government tried to resolve the problem over the past two days. Its lack of co-operation has slowed down our efforts,' the authority's president, Simon Chan Weng-hong, said earlier.

Hong Kong travel agencies and the Travel Industry Council complained about being unable to reach the airline during the past few days.

But a Viva Macau spokeswoman said yesterday detailed records of correspondence could prove daily contact with the Macau government since the beginning of the crisis.

As to why the firm had failed to make any announcement or amend its flight schedule, she said the airline thought service would return to normal after a brief disruption. But it was taken by surprise when its fuel supplier refused to fill the planes' tanks despite Viva Macau pre-paying on Friday for all its weekend flights with shareholders' credit guarantees.

Fuel supplier Nam Kwong Oil said on Sunday the airline owed it debts dating as far back as 2008.

Meanwhile, Viva Macau has started processing refunds for 4,739 passengers for tickets they bought for the 33 flights cancelled between last Friday and April 1.

The airline issued letters to travellers and agencies stating the amounts it owed them and promising to transfer the money to their bank accounts within two weeks, but a mainland tourist was not optimistic.

'In two weeks' time, I don't even know if it will still be here,' the woman said.

A travel agency representative, who asked not to be named, said that in the event of bankruptcy proceedings, the agency's account - and passengers' money - would be frozen.

The Macau government said on Sunday it would take legal action to pursue a loan of 200 million patacas it made to the airline for the 2008/09 financial year.

Yesterday, the government continued to help stranded foreign passengers and Macau residents stuck overseas to return home. Four more Viva Macau flights were cancelled.