Air Macau and Australian low-cost carrier Virgin Blue are in talks to set up a no-frills airline operating from the former Portuguese enclave of Macau.
Industry sources say progress is being made on a deal that could see the launch of a new airline early next year, operating from Macau to points elsewhere in China and other parts of Asia.
Full-service carrier Air Macau would have a majority stake, while Virgin Blue would have a management role and a sizeable minority stake. Property, shipping and investment firm Shun Tak Holdings, which is controlled by Macau billionaire Stanley Ho, has also been involved in discussions and could also take a minority holding.
Air Macau makes most of its money from carrying passengers between China and Taiwan via its home base, which is a short ferry journey from Hong Kong, but it wants to reduce its dependence on this type of traffic.
Macau is seen by many as an ideal destination for a low-cost airline, as its airport is hungry for new business and it can be treated as an alternative gateway to more expensive Hong Kong and points in southern China. Macau is also a thriving leisure destination in its own right with its main attraction being gambling. One low-fare carrier expanding at Macau is Thai AirAsia, which added a second daily service in mid-October.
Virgin Blue has said it hopes to expand into Asia and acknowledges that it has been discussing starting a low-cost carrier in Macau. But it says this is only one of several ideas under consideration. At one point it explored partnership possibilities with Malaysia's AirAsia and with Thai Airways International's recently launched Nok Air but no deals were concluded.
Source: Airline Business
