Viva Macau decries termination of its licence

PUBLISHED : Thursday, 01 April, 2010, 12:00am
UPDATED : Thursday, 01 April, 2010, 12:00am

Viva Macau said yesterday the Macau government's sudden termination of its air operations' contract was not only unprecedented but also against international regulatory standards.

But the budget airline said all it wanted now was its licence back - it hoped by Friday - meaning it would take no legal action for the time being.

Airline chief executive Reginald Macdonald said that international regulatory standards normally called only for suspension even in extreme situations. But in this case, the airline was not notified of the revocation until two hours after the official announcement.

A person familiar with the situation said the government had not yet set up a meeting with the airline's representatives.

Macau's Civil Aviation Authority cited 'cancellation of flights and refusal to provide support and information for passengers' as reasons for the immediate revocation, but Macdonald denied that. 'We co-operated fully with the Macau government crisis centre, providing passenger lists as requested,' he said.

Macdonald also cited authority figures showing that Viva Macau's flight cancellation rate in the second half of 2008 was just 4.6 per cent, compared with 5 per cent to 16 per cent for other Macau carriers.

Viva Macau's flights were grounded last Friday after its oil supplier, Nam Kwong, refused to provide fuel unless it cleared a debt of US$1.7 million.

The airline agreed to settle the amount before the end of March and pre-paid US$135,000 for fuel costs for Saturday and Sunday, with a personal credit guarantee from the chairman, but the supplier still refused.

The government terminated the airline's contract the following day.

An industry source said the incident did not make sense as grounding during the Easter holiday would only affect its ability to repay.