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An Open Reply to Air Macau CEO Statements made March 6 2008

(Macau, March 10, 2008) We read with great interest the comments of Air Macau and its CEO in the press last week.

In the quotes in the Macau Daily Times on Thursday March 6 the Air Macau CEO, David Fei acknowledged and confirmed our own remarks made in the last two weeks: that Viva Macau is not restricted as to where it can fly, as long as Air Macau approves it. With that comment Air Macau has confirmed that Macau SAR has a 14-year monopoly airline environment, which has underserved its needs and Air Macau itself protecting its own interests over the interests of Macau SAR.

If it is indeed a conscious choice for the public of Macau SAR to transfer the powers of allocation and approval of a public asset – the Macau SAR air service rights – to a commercial entity, then they should be to an entity that is and has an unconflicted commercial track record, operating standard and integrity of on-time performance and minimal flight cancellations. Otherwise, this is against the public interest of Macau SAR which depends on reliable, quality and expanded direct air service links to the world.  

If that is the case, then arguably Viva Macau – with a 1% cancellation record, the Centre for Asia-Pacific Aviation award-winner for Best New Airline, and our passing the IOSA audit on first attempt should qualify Viva Macau for the same role. You can verify with Air Macau with regards to its record on these fronts: anecdotally we have heard their cancellation record is close to 200 flights per month (20% of their flights), which is incredible, and they have never garnered favorable international recognition on par with Viva Macau. How can this record qualify Air Macau to be given the allocation rights over the public asset of Macau SAR’s air service rights?

The Air Macau CEO was also quoted as saying “competitors have many flight destinations open to them”. However he failed to add the most important point: Air Macau has rejected the majority of applications made by Viva Macau for new points to fly to, even where Air Macau has never operated in 14 years. The CEO refused to answer the question by one journalist about why Viva Macau was thrown off Phuket, only to see Air Macau never operate. All of this conflicts with the public interests of Macau SAR: Air Macau decides that Macau SAR does not deserve to be linked to the rest of the world. Is it in the public interest to let them make this decision instead of the Macau SAR people and their government?

The traffic rights that Air Macau is hoarding are public property; they belong to the government and people of Macau SAR and should be used for the benefit of Macau SAR not just the benefit of one airline who makes little or no use of them. We do not force visitors who come to Macau into only one hotel, one restaurant, one casino, or one shopping mall; but why do they only have a choice of one Macau airline.. because that’s what Air Macau wants, even when they have not made use of those rights to serve the Macau SAR public interest in 14 years?

In the Viva Macau Spring Dinner on Tuesday February 26, we noted that we expected Air Macau to react by announcing priority markets the same as those we have announced in preceding months: sure enough, Mr Fei’s announcement last week regarding Air Macau’s priority routes for the next 12 months mirror those of Viva Macau, yet again. This is an example of deliberate harassment. 

The absurdity of the situation is further highlighted by the conflicting track record of announcements by Air Macau in the past and their subsequent actions. For example:

• In July 2005 they announced they would commence cargo operations with a B747 that would connect Macau to Los Angles, New Delhi, New York and Frankfurt. It did not happen.
• In July 2005, announced also that they would fly to Tokyo and Kwangju in 2005. It did not happen.  
• In December 2006, they announced they would fly to Phuket in 2007. It did not happen.
• Announced commencement of Macau Asia Express, a new subsidiary airline in 2005, then again in 2006, then again in 2007, and now again in 2008! It did not happen, and now the Air Macau CEO claims back some of the routes eg. Nagoya, Singapore, which Air Macau has still never flown with frequency. 
• Announced in August 2006 that in negotiations for 3 widebody aircraft to operate services to UK, France and Germany in 2007. It did not happen.
• Cancelled operations to Singapore, Siem Reap, Kuala Lumpur, Pusan, Kota Kinabalu and more recently Changsha and Guiyang and Bangkok (subsequently re-entered).
• Discontinued cargo operations with Kuzu for unknown reasons.

We also note that after our remarks about our rejected application to serve Singapore, the Air Macau CEO is now remarkably stating that they will serve this market next year, despite that point being sub-conceded to a non-existent airline and served in the meantime by 2 foreign airlines. Kuala Lumpur, Bangkok, and Singapore are examples of markets Air Macau has abandoned and left the interests of Macau SAR to be served by foreign airlines who have built very large destination traffic numbers out of these markets.

Macau SAR has not seen any new markets served by a Macau-based airline until the entrance of Viva Macau. Air Macau’s interests have been demonstrated already for 14 years as the majority of their passengers are transit between Taiwan and China without interest to actually stay in Macau.  This is not serving the interests of Macau SAR and its own transportation needs as the biggest new international destination in Asia.  Viva Macau’s mandate is precisely to serve this need.

Despite all the obstacles put in our way, Viva Macau has demonstrated our commitment to operating a world-class, award-winning airline which the people of Macau SAR can be proud of. 

We are fully committed to safety and quality of our operations. This is highlighted by the passing of a significant audit by an IATA Operational Safety Audit (IOSA)

certified Auditor, a worldwide recognized standard, on our first attempt and our very high standard of pilot hiring and training policies.

Operationally, our on-time performance for the entire year was 90% and our total cancellations for the year only represented less than 1% of total flights. These are statistics comparable to the best airlines in Asia Pacific, and far superior to those of Air Macau. 

Without exception, we see throughout Asia and the world that the aviation industry is critical for continued sustainable economic growth. A strong aviation sector is essential to the development of Macau SAR. It benefits the community and promotes new business and prosperity.

The transformation of Macau’s gaming industry over the past 4 years has been a remarkable achievement. This transformation has firmly put Macau in the world’s spotlight and has contributed to the Macau economy.  What is different in the aviation sector?

We believe it is time for a new approach to aviation in Macau, one that enables BOTH its home grown airlines to grow as they desire and to put Macau on the world map. We don’t want any preferential treatment…just fair and equal treatment. We believe that Air Macau and Viva Macau can work and co-operate in the best interests of the people and business of Macau SAR. It would be in the best interests of Macau SAR if the government could act to provide air service rights fairly to both Macau-based carriers in the best interests of Macau SAR.

The process of developing new routes in Macau SAR is not a simple one and we call on our colleagues in Macau business, our friends in the media, our trusted government officials who have lead Macau so well, and the people of Macau for your strong support in making Macau SAR’s aviation sector a world-class one and an equitable one, as this is essential to the future of Macau.