1-3 Airlines in Macau
At this moment, there are fourteen airlines operating in Macau and they are
1-4 Departure and Arrival
In total, there are twenty five air routes providing in Macau and here are some of the destinations and origins for Macau airline industry
Ch2. Current Trends
The airline industry benefits Macau a lot, for example, widen the eye sight of the citizens, increase the quality of culture, improve the economy and provides job opportunities for tourism and trading industry. The benefits can be divided into three types: direct benefit, indirect benefit and extend benefit. Direct benefit means the investment and job opportunities. Indirect benefit stands for what the related industry gains and the extend benefit is the money spent in Macau by local employees who work in the airline industry.
Before go further step into these benefits, it is very important for us to know the trends of this industry.
2-1 Cargos
After the quota of textile products had been cancelled, half-made products made in China did not need to pass through Macau. They can transport to other countries directly and this affects the air freight market of Macau. Besides, the past few years Hong Kong have too much cargo bay left and so thus the price of cargo freight decreased. People would like to switch to the Honk Kong Airport for cargo freight because of the lower price and swift service.
Meanwhile, most of the logistics companies in Macau are small and medium enterprises. They cannot catch up with the rapidly growth of Macau and they have only limited experiences so they can hardly compete with all those international enterprises. Also, most of the routes providing are in Asian. If the cargos have to freight to European countries, they will be transferred two or three times. It may lead to delay and cause money loss. 1
1. Guo, L., “A Review of the Macao cargo logistics industry and its forecast”, Journal of Macau Civil Aviation, Volume V, 2007, page 68
2-2 Visitors
In the past, most of the visitors arriving Macau is from Taiwan. However, the percentage is decreasing. From January to November 2007 there were 2380,200 person-times from Taiwan made use of Macau International Airport. It occupies 47% of the whole market while in the past was 60%. For China, the percentage is 29% while Malaysian visitors occupies 8% 1
It is quite obvious that more and more visitors from south-east Asia are coming to Macau. And increasing number of visitors come to Macao are tourists but not businessmen anymore. 2
2-3 Airlines
Because of the rising price of oil, many airlines are affected. Air Macau lost 62,000,000 MOP in 2006 although there was a 24% increase of passenger transport and 15% increase of cargos freight. 3
While for the low cost airlines, Air Asia extended services to Macao in 2004 with the opening of the Macao-Bangkok route, one flight a day in the beginning, then two flights a day and three flights a day from November 2005.
And the market share in the Asian area increased a lot. It was only 1% in 2001 but it increased to 20% within three years. 4
Now, all the airlines are trying their great effort to increase their air routes and lower the cost to increase their revenues. They try to employ air attendants from other countries, for example, Japan and sent them out to be trained to increase the service quality because they can provide customized services when facing guests of different culture after training.
1. Macao Daily, 18 January 2008, B2
2. Macao Daily, 15 April 2007
3. Macao Daily, 30 March 2007
4..Macao Daily, 27 March 2007
2-4 Macau International Airport
In November 2007, Ms. Suning Liu, Executive Director of CAM stated that by the time the "South Extension project " is completed, the Departure hall area will be expanded to 9450 m²; from original six boarding gates to 12, also adding in six mobile gates, which can significantly increase efficiency during rushing hours. Flight handling capacity from 16 movements per hour up to 28 movements. In addition, the future parking building’s construction area will be 37500 m², providing 1000 parking spaces, 10 large coach parking spaces and 50 minibus parking spaces. 1
The whole enlarging project is expected to be completed in 2011 and the expense will be around 4,000,000,000 MOP. According to the professionals’ opinions, Macau International Airport can refer to the successful experience from Las Vegas. Aside from attracting the leisure tourists, business travelers and families can also be taken into consideration. 2
2-5 A5
There are five airports in the pearl river delta namely A5, and they are Hong Kong International Airport, Guangzhou Baiyun International Airport, Macau International Airport, Shenzhen Baoan International Airport and Zhuhai Airport. The distance among them is less than 150 kilometers and the density is the highest in the country. The freight handling capacity in 2020 is expected by Mr.Zhang Zhong Xiao to be 20,000,000 person-time, almost triple for now. 3
1. Macao International Airport Company Limited., “" Macau International Airport "Welcome the 5 Million Passengers Ceremony" ”http://www.macau-airport.com/en/h04/06_press_release.php?
pressID=235&year=2007&month=11 , January 18, 2008
2. “Professional: it is the time for Macau Airport to enlarge”, Journal of Macau Civil Aviation, Volume V, 2007, page 94
3. Vakio, 10 December 2007, sheet1 page1
The last A5 seminar has ceased for four years and in June 2007, it started again. The first seminar was held in Hong Kong and the framework of development was established. The second one was in Shenzhen and procedures of cargo freight, training of staffs and security issues were discussed. The third seminar regarding to emergency and landing issues during typhoons was in Macau. The forth one about measures of SARS was in Zhuhai. This time five airports agreed to sign a contract and agree to set up the secretariat of Pearl River Delta Region Airports Forum in Macau. The targets of this forum are to help forward the communication and development among five airports. Moreover, certain policies are set to tie in the strategies of China. It is expected to see that five areas will cooperate to the training of staffs and information and resources sharing. 1
2-6 CEPA
CEPA gives Macao an impetus to the sustainable development of the overall economy in the aspects of pushing ahead the air cargo, trading services and inviting more foreign direct investment to Macau
Through the CEPA, all the goods which fit in with the conditions can be exported to the mainland without paying tax. This can increase the competitiveness of goods manufactured in Macau and can stimulate the demand. However, it is necessary to have efficient freight transport service first. Then, the raw material and semi-finished products can be transported to Macau from other districts. After they are processed, they can be transported back to Mainland. 2
1. “The Pear River Delta Airport Forum set up the secretariat in Macau”, Journal of Macau Civil Aviation, Volume V, 2007, page 97
2. Tang Z., “The effect of civil aviation cargo service market efficiency on CEPA system”, Journal of Macau Civil Aviation, Volume IIV, 2006, page 64
Ch3. Analysis of Macau Airline Industry
3-1 Air Cargos
Due to various internal and external factors, the volume of air cargo in Macau, both by origin and destination, is decreasing starting from 2005, even recorded a 2-digit decrease in 2007. 1
Table3-1 The volume of air cargo in Macau
Source: Macau Statistics and Census Services, Yearbooks of Statistics, 2000-2006
After canceling the export quota in textile industry in 2004, Macau cargo logistics was experiencing a tough period and also it is a big challenge to overcome. Since export occupied around 40% of air cargo in Macau, most semi-manufactured goods from different districts of China can directly export the goods, without via Macau. This action influences the development of air cargo seriously.
1.The Macao Post Daily2, 2007.12.10
In addition, the rapid development of Macau tourism and gaming industry required a large pool of working population. Because of the comparatively high salary in this field, especially in gaming section, more and more people had forgone their stable jobs or study to work in hotels and casinos. Facing the crisis of air cargo, few people are willing to work in this industry; the corporations are forced to employ those less qualified candidates, in order to run the business. Therefore, the overall quality of human resources decreased simultaneously, leading to a less competitive position among other districts or countries nearby.
Table3-2 Job Vacancy of Transport and Communications
Source: Journal of Macau Civil Aviation 2007.6
Table3-3 Job Vacancy of Gaming
Source: Journal of Macau Civil Aviation 2007.6
Table3-4 Average Salary of Transport and Communications
Source: Journal of Macau Civil Aviation 2007.6
Table3-5 Average Salary of Gaming
Source: Journal of Macau Civil Aviation 2007.6
3-2 Commercial Flights
Contrary to the decrease of air cargo volume, the numbers of commercial flights passing in and out of Macau International Airport are increasing during the past few years, except year 2003; the SARA gave people all over the world a wide berth traveling to and from Asian countries. Improvement occurred when first low cost airline --- Air Asia launched Macau and started to run the business here. After that, the whole situation of Macau airline industry has changed; Macau airline industry is no longer largely depended on the transit flights between China and Taiwan, on the other hand, taking the advantage of rapid development of Macau economy, Macau airline industry put more effort on introducing other low cost airlines to and from Macau, also in order to cooperate with the long-term development of Macau and the need of the whole society, long haul flights are the processing trend for the future of Macau airline industry.
Table3-6 The numbers of commercial flights
Source: Macau Statistics and Census Services, Yearbooks of Statistics, 2000-2006
3-3 Visitors and Spending
The economy of Macau is growing rapidly during these few years, the GDP (per capita) is increasing year by year in 2000-2006, also the nominal growth and real growth showed a positive increase growth rate. Especially, in year 2004, a few months after the individual visit scheme was introduced, the scheme was later extended to major urban centers, including Beijing and Shanghai and the whole Guangdong province1, making more and more mainland Chinese tourists come to Macau, also after the validation of the CEPA between mainland China and Macau in 2004; it has been playing a positive role in promoting Macau.
Table3-7 Gross domestic product (GDP)
Source: Macau Statistics and Census Services, Yearbooks of Statistics, 2000-2006
1. Hong Kong Trader, http://www.hktrader.net/200801/index/index20080118.htm, Jan 19, 2008.
Table3-8 The numbers of visitor arrivals and spending
Source: Macau Statistics and Census Services, Yearbooks of Statistics, 2000-2006
Since tourism and aviation forms a close relationship, therefore, the airline industry of Macau is also developed flourishing. After the liberalization of gaming industry, the introduction of individual visit scheme and the emergence of low cost carrier which encouraged more travel among locals and nearby residents, and the CEPA was in valid leading more and more mainland tourists come to Macau. All these facts brought the number of tourists visiting Macau has been increasing tremendously. Also, the per capita spending of interviewed visitors is increasing, especially those came by air, is spending much more than the average. Moreover, the percentage of the total spending by air over the total spending of interviewed visitors is less than 20%.
Table3-9 Total spending of the visitors
Source: Macau Statistics and Census Services, Yearbooks of Statistics, 2000-2006
Ch4. Suggestions and Conclusion
Macau is a tiny city and is lacking of natural resources, so the economy of Macau almost all relied on the performance of tourism. After the liberalization of gaming, many foreign based companies, namely Wynn, Venetian, etc are interested in setting up their businesses here, at the same time, twenty five heritages of Macau were listed in UNSCO world heritage, attracting more and more different kind of tourists form all over the world. Therefore, airline industry of Macau plays a very important role in the further development of Macau.
In recent years, due to the introduction of low cost airlines, Macau airline industry became less and less depend on the flights to and from between China and Taiwan, and this is a remarkable step and benefits the industry a lot. In order to continue transform to a destination rather than a transit point, Macau should give room for the low cost airlines to develop.
Besides, Macau government intends to develop the event industry, given that more and more infrastructure have been built; Macau airline industry can go a step further for international flights to enlarge the market share and business jet is needed to provide convenience for businessmen and public bodies.
Since competition can improve the efficiency, the airline industry in Macao really needs some competition so that the resources can be allocated in the best way. As a result, in the view of air cargo, increasing the number of cargo air crafts and recruiting the suitable candidates are very important.
Last but not the least, given the condition that the economy of Macau developed rapidly in these few year, Macau airline industry can grasp the chance to investigate different air routes to see the benefits and costs. Also, Macau should be cooperated with the other four airports (A5) to achieve a win-win situation. Under the great support of Macau government, Macau airline industry should carefully pre- plan the future character in Macau tourism and among other airports nearby, also take actions actively. Therefore, Macao needs to streamline the operation process so that it can provide effective and efficient services to support the gaming industry and manufacturing industry.
Bibliography
Charles R. Goeldner., J.R. Brent Ritchie & Robert W. MaIntosh (2000). Tourism Principles, Practices, Philosophies. New York: John Wiley & Sons
Chuck Y., James C., Dexter J.(1997). The Travel Industry. New York: John Wiley & Sons
Guo, L.(2007).“A Review of the Macao cargo logistics industry and its forecast”. Journal of Macau Civil Aviation, 5, 68
Macao International Airport Company Limited.(2007), “" Macau International Airport "Welcome the 5 Million Passengers Ceremony" ”. January 18, 2008 from http://www.macau-airport.com/en/h04/06_press_release.php?pressID=235&year=2007&month=11
Tang Z.(2006), “The effect of civil aviation cargo service market efficiency on CEPA system”, Journal of Macau Civil Aviation, 3, 64-71
TechTarget., (2008) “Airline Industry (Air Traffic Control, Freight Forwarding Services, Airport Management, Helico)”. January 16, 2008 from http://www.bitpipe.com/tlist/Airline-Industry.html
Hong Kong Trader (2007), “World-class attractions, with much more in store”. January 19, 2008 from http://www.hktrader.net/200801/index/index20080118.htm
