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AirAsia considers Macau base
March 29th 2019
Tony Fernandes sees Macau as gateway to mainland China after JV failed. Read More »
Tony Fernandes has joined the field of investors considering establishing an airline in Macau after the territory’s concession agreement with Air Macau ends in 2020, permitting unfretted access for new entrants.
Fernandes may seek an AirAsia JV in Macau, Fernandes told the South China Morning Post. “Entering China could be via Macau…We do not have to be in mainland China, but being in Macau is like being in China,” Fernandes said.
One confirmed start-up called 888 Macau Airlines is being run by a former Viva Macau executive, Joseph Said, and is seeking US$45 million in start-up funding, according to Macau News Agency.
AirAsia last year ended plans for a Zhengzhou-based JV, AirAsia China. A Macau unit would be vastly different than one based in the mainland market. The Zhengzhou unit would have served domestic routes while the Macau unit could only fly to and from Macau. There would be some spill over from Zhuhai and possibly Hong Kong.
One advantage of a Macau unit is to act as a hub between Northeast and Southeast Asia, providing better links between AirAsia’s sole Northeast Asia JV, AirAsia Japan, and the numerous units in Southeast Asia. But connecting traffic will require scale and comes with low yields, and longer journeys are served directly from the AirAsia X franchise.
LCCs have found the Macau market limited without significant subsidies and incentives.
The possibility of a Macau unit is a reversal from Fernandes’ 1 January statement on Twitter that there would be no new JVs for three years after establishing AirAsia Vietnam. Fernandes said at the time: “As 2019 approaches I would like to confirm that airasia[sic] will not be opening up any more new airlines for the next 3 years. After Vietnam we will focus on what we have.”
Fernandes looked back at the mooted AirAsia China and remarked to the Post: “What we were working towards would not make a jot of difference to the Chinese aviation space and we decided to withdraw for the moment until a better opportunity comes.”
While AirAsia would have enjoyed advantages in its home base of Zhengzhou, there would have likely been fierce protectionism elsewhere. However, Fernandes said of the 18 mainland cities the AirAsia Group serves: “This is proof that China’s aviation is an open market.”
AirAsia would have been the first foreign LCC JV in the mainland. Peach Aviation had also considered a Zhengzhou unit but never announced one there, or anywhere else.
