New aviation law passes on first reading amid claims of lack of information

The new civil aviation law to open up the Macau market after Air Macau’s 25-year-long monopoly passed on its first reading yesterday at the Legislative Assembly (AL).

Although the bill passed comfortably with 30 votes in favor and just two abstentions (José Pereira Coutinho and Che Sai Wang), discussion was heated.

Many lawmakers claimed the government had not provided enough information on how the new licensing system will operate and what criteria will be applied when deciding to grant or withhold a potential candidate’s license.

The Secretary for Transport and Public Works, Raimundo do Rosário, said the details are not being presented as they will depend on further discussion with lawmakers when the bill moves to detailed analysis in one of the AL’s Standing Committees.

Rosário did not respond to questions from several lawmakers, including Pereira Coutinho, Ron Lam and Leong Sun Iok, about government policy and Macau’s position in the aviation market.

Rosário claimed the issue is beyond the bill’s scope. Questions about general policies and Macau’s positioning in the aviation market are the responsibility of both the local Chief Executive (CE) and the central government.

Some lawmakers also noted there is a need to ensure that this new law can effectively prevent failures in the approach to the market, such as the former airline Viva Macau in which the Macau government lost money in the payment of subsidies and financial support to the company that eventually went bankrupt and had insufficient assets to cover these sums.

Rosario responded that there are criteria and rules about the financial capacity of applicants for licenses but that it is “impossible to ensure and guarantee 100% that cases of business plan failure will not happen.”

“We can only try our best, but we can never guarantee 100% that there will be no problems in the future,” he added.

Lawmaker Leong also raised concerns over the hiring and training of local staff to work with the new license operators. However, Rosário said such matters can be only introduced in the public tender document, which is a separate issue and not currently under discussion.

Several lawmakers raised concerns about the number of licenses to be issued.

Rosário said the law provides that the CE makes such decisions based on the market and potential bidders to the public tender.

Even so, he noted the number should not be high.

“I believe that won’t be a high number, we can just see our demography and space. We don’t have conditions to have a lot of airlines operating from Macau for sure,” the Secretary said.

Responding to questions about the number of potential bidders the government is anticipating, Rosário said there is no forecast for the time being as “for the moment only Air Macau is a registered company locally and it can fulfill the criteria,” leaving the topic for the time that the public tender for the licensing opens.

Tender document almost complete

According to the Secretary, the public tender document that sets the rules and criteria for the attribution of passenger air transport licenses is “about 70 to 80% completed,” only missing some details which he said would come from the further discussion of this bill.

“After the law is approved, we will reveal the tender details. It’s almost done. We just need some details that also need to be integrated from this law,” he said. He noted that there are some concerns on the government side about when to launch the public tender.

“From my side, there is no problem with the calendar. The [public tender] documents are almost ready, but we are not rushing it. We are evaluating in detail to see when the right time would be. Maybe now is not the best time to have the tender launching, as the market has not yet recovered from the pandemic period. We may need to address this later,” he said.

Aviation market foreign routes only 20% recovered

The number of flights on foreign routes has only recovered to about 20% of pre-pandemic levels, Secretary for Transport and Public Works Raimundo do Rosário revealed yesterday at the AL.

While discussing the bill to transform Air Macau’s monopoly into a more open regime based on licensing, the secretary said now might not be the best time to promote a public tender as the aviation market beyond the mainland is still struggling to reach pre-pandemic levels.

“From January until today, flights other than to the mainland have only recovered some 20% of the situation before the pandemic. I don’t know how long will take to recover.

I also hope we can, but how or when this will be possible will depend on the market,” Rosário said.