Legal Wise by MdME | Opportunities for the aviation industry and beyond

João Benazra Faria, Senior Associate, MdME

The Macau International Airport (MIA) has recently passed 20 years since its official opening in November 1995. Since then it has experienced remarkable growth until today, with a couple of exceptions, achieving a volume of 630,000 passengers last August. The Macau aviation industry is expected to grow even further with the development of new transportation infrastructure in and around Macau. However, it is crucial to promote synergies between the air transportation services and the other means of transport, otherwise value will likely be lost.
As a matter of fact, with the exception of the year of 2003 (due to being affected by the SARS crisis), which registered a drop in passenger traffic of about 30 percent compared with 2002, and of the period from 2008 until 2011 (commencement of direct flights between the Mainland and Taiwan), during which the drop reached 17 percent in 2009, the MIA has consistently registered two-digit year-on-year growth in passenger traffic, despite being in competition with four international airports within a 150 km radius. Only in 2014 and 2015 did passenger traffic growth remain below that threshold, at 9 percent and 6 percent respectively.
Considering that passenger traffic keeps growing steadily, but it only represents a fraction of the total visits to Macau, great opportunities for the economy as a whole and for the aviation industry in particular lie ahead. This is especially so since Macau is about to witness one of the biggest revamps of its transportation network in its history, as local and Macau related landmark infrastructures are (hopefully) to be completed in the near future, including the new maritime ferry terminal, the Hong Kong-Zhuhai-Macau Bridge, the Taipa section of the Light Rail Transit (LRT) system, not to mention the fourth Macau-Taipa bridge in project phase and the Guangzhou-Zhuhai Intercity High Speed Railway Gongbei Station already completed.
The benefits of the aforementioned infrastructure to the economy as a whole are considerable, but I would emphasize those in connection with helping Macau position itself as a world tourism and leisure center and as a service platform for economic and trade cooperation between China and Portuguese-speaking countries. This is in line with the MSAR’s first Five Year Development Plan, as such infrastructure will greatly improve people’s mobility inside the territory and further integrate Macau in the pearl delta region, therefore creating conditions for a tourism sector not so dependent on gaming and for other industries and activities, such as those related with conventions and exhibitions and logistics, as people and cargo may move and be moved in, out and around Macau, in a much more efficient manner.
As far as the aviation industry is concerned, I would particularly find it productive to ensure that the Taipa section of LRT system be integrated with the corresponding system on the Macau peninsula, ensuring that the LRT system is connected to the new point of entry of the Hong Kong-Zhuhai-­Macau Bridge and to the Gongbei border, so that the MIA has the actual possibility of serving not only the people of Macau, but also those of the adjacent regions.
Both the regulator and the MIA concessionaire have been preparing for such a scenario (based on a plan covering the airport’s development needs for 20 years, released in 2011 and updated in 2015). They have been negotiating agreements aimed at developing new routes and various forms of cooperation, opening the MIA to new operators, modernizing and expanding its facilities and services, continuously attracting new airlines, creating innovative mechanisms such as the Express Link Service (which enables passengers to cross two customs, with one check point only), and so forth.
Recently, however, three lawmakers reportedly urged the Macau government to consider not building the LRT section in the Macau peninsula, but rather extend it from Taipa to the Barra district only and replacing the remainder by a monorail and by a new road along the coastline of the peninsula, as the works of the LRT would cause severe traffic jams and other inconveniences.
Although I might understand that the implementation of such project will certainly involve a significant disruption to people’s daily lives, it will be for a greater good. In my perspective, the Macau peninsula should have its own section of the LRT system, duly integrated with the respective Taipa section of the LRT, creating a unified LRT system that would connect Taipa island and the Macau peninsula with all the points of entry of the above mentioned infrastructures, creating a dynamic that will likely pay off in the future.
In conclusion, although the aforesaid infrastructures present great opportunities for the Macau economy in general and for the aviation industry in particular, they must be developed in an integrated manner, otherwise the whole will not be greater than the sum of the parts, and Macau might well miss a good occasion to do something that not only improves the quality of life of the people, but actually contributes to the much-­vaunted diversification of the economy.