Gov’t extends Air Macau’s concession agreement for three more years

Air Macau’s 25-year concession agreement, which was set to expire this November, has been extended for three years, the Civil Aviation Authority of Macau (AACM) announced in a statement.
The announcement contradicted an earlier statement from January 2019 when it said that the concession agreement will not be renewed as the government is aiming to liberalize the market.
In 2008, the SAR government decided not to extend the exclusive rights in the contracts upon their expiry. Air Macau holds an exclusive concession that permits it to operate certain routes without competition.
“To cope with the amendment of the relevant legislation for the liberalization of Macau’s air transport market, as well as to maintain the stability of the industry operations currently affected by the outbreak of the Novel Coronavirus Pneumonia, the SAR government will extend the concession contract of Air Macau for three years,” the AACM announced in a statement.
Currently, the government is working on the administrative procedures for the extension of the contract. More details will be published after the signing is concluded.
Lawmaker Lao Chi Ngai believes that the decision made by the government is appropriate as the current global pandemic has meant stringent travel restrictions that have largely hit the aviation industry.
For Lao, even if the air traffic concessions and market were opened, the timing is not convenient, and therefore airlines may not be interested in launching routes to and from Macau.
“I feel that it is more appropriate for the government [to renew] Air Macau’s concession agreement for three years,” Lao told Macao Daily News.
After three years, it is thought that the city’s aviation industry will become an open market, allowing any airline to apply for any routes to and from Macau without the need for AACM to consult Air Macau.
Any foreign airline wishing to operate scheduled flights to Macau will be able to file their flight application to AACM for approval on the condition that the airline is designated by the aeronautical authorities of the contracting party and flies the route in accordance with the provisions laid down in the bilateral air services agreement between Macau and the contracting area.
AACM has previously mentioned that it hired an international consultancy firm to study the future development of the air transport market for Macau in 2017. However, the authority did not disclose what plan will be implemented, noting that the Basic Law required the local government to communicate with the Central Government when devising the plan.
Although Air Macau’s concession agreement will end in three years, the airline will still continue to operate flights as an air operator registered in the SAR.
Currently, the airline operates routes to a total of 36 countries and regions, although most destinations are in mainland China.
The local airline reported that its profits last year stood at about 127.6 million patacas, representing a 37% drop from a year earlier.