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Budget airline plans to double workforce and fleet size next year
In the face of the global financial crisis and tough regulatory regime, Viva Macau Airlines is planning a major expansion next year in a bid to more than treble passenger numbers.
Chief executive Con Korfiatis said the budget airline had not realised its full potential in the past 12 months due to external factors including the price of oil, limited availability of aircraft and restrictions on adding new routes.
Mr Korfiatis said Viva had a five-year business plan that included adding up to four new aircraft each year. He said the airline, which is operating at a loss, was only flying the two 250-seat capacity planes it started with in December 2006.
The ambitious expansion plan will see Viva's fleet size and workforce more than double  next year.
'Our shareholders understand that the airline industry is not one where you open the doors and profits roll in. We expected to lose money for a year or two,' Mr Korfiatis said. 'We have had profitable months and the loss has been in accordance with our business plan, but we do not want that to go on.'
The introduction of new destinations and increased frequency on existing routes is designed to increase passenger numbers from 15,000 a month to more than 50,000. Despite the global financial downturn, Mr Korfiatis is hopeful of adding three new aircraft  next year.
'Last year, with everything booming, it was difficult to find any new or used aircraft in the market and that had an impact on our growth, but the global economy is very different now,' he said. 'Customers seek value in times of economic difficulties, which means Viva Macau remains attractive and sought-after with its low-fare model.'
Each additional aircraft will require at least 50 new staff, mainly cabin crew and pilots. Staff will be recruited from around the world, as there are not enough qualified people in Macau. The airline currently employs 160 people from 30 countries.
'The new year will see Viva Macau doubling its staff size, as we have planned to increase the frequency of our existing routes to Sydney, Tokyo, Ho Chi Minh City and Jakarta,' Mr Korfiatis said. 'We are considering launching additional ports in Australia, Indonesia, Japan and Korea as well as new destinations in the Middle East, India and Russia.'
Mr Korfiatis said finding staff, particularly experienced pilots, had been difficult and time-consuming, but the global economic crisis should ease the human resources shortage in the airline industry.
'With uncertainties and the global economic issues faced now, many airlines are downsizing and the pool of available professionals is increasing significantly,' he said. 'This is now an advantage for Viva Macau, as contrary to other airlines we plan to grow our airline significantly in 2009.'
Pilots and cabin crew applying for positions must pass written and practical examinations based on safety rules set by Macau's Civil Aviation Authority. Technical qualifications are updated annually and cabin crew must undergo customer service training.
Despite being only in its second year of operation, Mr Korfiatis said Viva Macau offered competitive remuneration packages aimed at attracting 'world-class candidates'. He said human resources and Macau's aviation regulatory system were the biggest challenges.
'The fact is there is really not enough of an understanding of what an aviation industry should be and the role it needs to play in the development of the place,' he said. 'The multiplier effect that aviation contributes to the economy is massive.'
Mr Korfiatis said authorities in cities such as Hong Kong and Singapore understood the situation very well and had developed regulatory regimes to create a strong, healthy industry.
'The regulatory environment in Macau is completely the opposite,' he said. 'It is not aggressive enough to promote the city.'
The civil aviation industry in Macau is run by the government, which allocates flying concessions to carriers, much like it does with gaming licences. Viva Macau has a sub-concession and any new destination must be approved by the government and concession holder Air Macau.
'A concession environment is not appropriate for Macau or the industry,' Mr Korfiatis said. 'It needs to be promoting growth, especially in a city that is growing so fast, but it simply does not do that.'
Mr Korfiatis said under the Macau regulatory system he was unsure if Viva would gain approval for all of the new destinations it planned to introduce next year. He said many of them were untapped markets, which meant that they should be approved, and he was confident of gaining approval for increased frequency on current routes and additional destinations to existing countries.
'All the routes we operate have shown signs of growth,' he said. 'Arrivals from Australia have grown 50 per cent, Vietnam 60 to 70 per cent, Indonesia 70 per cent and Japan about 35 per cent.
'We see demand in all of these markets.'
Factbox
Budget airline Viva Macau to double  its workforce next year
Three additional aircraft to be added
Increased frequency to existing destinations and new routes planned to India, Russia and the Middle East



New horizons for Viva Macau