Policymakers to consider whether to end Air Macau’s privileged position after 2020

One possibility is for billionaire businesswoman Pansy Ho to renew her bid to launch a budget airline in former Portuguese enclave

PUBLISHED : Sunday, 23 July, 2017, 3:02pm
UPDATED : Sunday, 23 July, 2017, 11:35pm

Macau’s policymakers will soon consider whether to end Air Macau’s privileged position as the sole home airline.

Whether a second home airline is created may become clearer at the end of the month when the territory’s civil aviation regulator receives an interim report from consultants on the future development of the industry in the former Portuguese enclave.

The government will decide whether to keep the status quo or not after Air Macau’s franchise runs out in 2020.

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The general trend in aviation was to liberalise the aviation sector, said Chinese University aviation policy expert Dr Law Cheung-kwok, who is not involved in putting together the report.

“I would advocate for the liberalisation of the number of airlines and other supporting services in aviation operations in Macau,” Law said.

“As Air Macau is mainly controlled by Air China and is also a partner of Cathay Pacific, the fact there is only one airline that has a dominant market position in Hong Kong and Macau suggests there should be a more liberalised regime for the operation of new airlines in Macau,” he said.

Macau’s civil aviation authority said it would study the “pros and cons” of the final report once it is submitted by the consultants at the end of the year.

The timing means Pansy Ho Chiu-king, chairwoman of Shun Tak Holdings and daughter of gaming tycoon Stanley Ho Hung-sun, may be tempted to make a third attempt to launch an airline.

Her first bid to set up a Macau budget airline collapsed in 2004. She then attempted to create another, Jetstar Hong Kong, with backing from Australian flag carrier Qantas and China Eastern, but it failed to secure regulatory approval from Hong Kong in 2015.

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The billionaire businesswoman sparked intrigue after she told The Australian newspaper last month about the possibility of relaunching Jetstar Hong Kong.

“I think it might have been the wrong timing and I believe there might still be opportunities,” Ho told the newspaper of the past failure to get the budget airline off the ground.

“I believe there will be opportunities about, simply because the whole region where we are operating out of is also evolving,” she added.

A Shun Tak Holdings spokeswoman said it had nothing to say about Ho’s comments.

An industry executive who was close to an earlier initiative to start a Macau budget airline, suggested an opportunity to obtain a new licence was nearing.

The source put the spotlight on the territory’s aviation monopoly. “There is a play. If you want to start an airline in 2020, you would want to start laying the groundwork now – even if you weren’t ready to come out publicly,” he said.

Also citing the monopoly on Macau’s airport ground handling services, he added: “If you can break the various monopolies and you get the political pull to say Macau should no longer have an exclusive airline licence regime since Air Macau had 25 years to get its act together, it would allow Macau and the Greater Bay Area to not fall further behind other Asian centres of [low-cost carrier] activity.”

A source close to Pansy Ho, who was not authorised to speak publicly, was cryptic about the future when asked about a possible “play” on the Air Macau franchise.

“You have tried to connect the dots, but that is not coming from her and I cannot say yes or no at this moment,” the source said.

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The Post understands Ho’s enthusiasm stems from Beijing’s backing of the Greater Bay Area development plan, bringing together Hong Kong, Macau and nine cities in Guangdong.

However Qantas, which controls the Jetstar brand, has repeatedly ruled out a revival of its failed budget airline offshoot in Hong Kong.

“Time has moved on and we have moved on,” Qantas Group CEO Alan Joyce told the Post earlier this year. “We don’t see that as something we would be interested in going back to and revisiting.”

Jetstar’s sister airlines in Singapore, Vietnam and Japan still manage to fly up to several times a day to Hong Kong without having a base in the city.

The boss of Australia’s national airline said while the business venture would have been “great”, Hong Kong’s airport was now close to full, making it impossible for a new airline to launch new flights and expand quickly.