Macao and mainland aeronautical authorities signed a new MOU on air transport with more liberal conditions

Macao’s economy has been greatly boosted by the tourism and the gaming industries. With benefits from the individual traveling policy and “The Mainland and Macao Closer Economic Partnership Arrangement (CEPA)”, the demand for air services between Macao and the mainland has increased continually. The passenger and cargo throughput reports satisfactory growth year-on-year. To expand the development of the air services between the two places, the Civil Aviation Authority of Macao SAR (AACM) and the General Administration of Civil Aviation of China (CAAC) signed a new Memorandum of Understanding (MOU) on air transport between Macao and the mainland on 11 December in Beijing. The MOU greatly enhances the development of the air transport market between the two places, in particular, reaching a big milestone in the increased number of mainland destinations and the liberalization of the capacity. The signatories were the Deputy Director-General of Air Transport Department of CAAC, Mr. He Jin Ri and the President of AACM, Mr. Chan Weng Hong. The two aeronautical authorities met in Beijing in October this year to start new negotiations and agreed to further liberalize the conditions in the old MOU. The two parties exchanged opinions and agreed that the discussion of the new MOU should be concluded and signed within this year to cater for adequate planning time for the summer schedule to be launched by the airlines of both sides in March 2007. In accordance with the new MOU, the mainland destinations have been increased from 37 to 57, a rise of 54%. In the passenger capacity, the total frequencies (including helicopter services) of the following seven cities: Beijing, Shanghai, Guangzhou, Shenzhen, Chengdu, Kunming and Dalian will be increased from 196 to 315 commencing March 2007. Such frequencies will further be increased to 372 starting October 2008. No restrictions will be put on the capacity for the remaining 50 cities starting March 2007. The number of designated airlines will also be gradually increased. In the cargo capacity, the old MOU only allows the designated airlines of each party to operate a maximum of 50 all-cargo flights in each direction per week. Starting March 2007, the new MOU only puts capacity restrictions on seven cities: Beijing, Shanghai, Guangzhou, Shenzhen, Chengdu, Kunming and Dalian. No restrictions will be imposed on the capacity of the other cities. Commencing October 2008, except Beijing and Shanghai, the capacity limitations on the other five restricted cities will be entirely eliminated. Co-terminalization on any two mainland points is allowed by the designated airlines of both parties. However, Beijing and Shanghai cannot be served as intermediate points. Macao’s designated airlines do not have traffic rights between the co-terminal cities. In addition, the designated airlines of both sides can cooperate with each other in code-sharing. At present, the airlines of the two places which operate scheduled services between Macao and the mainland are Air Macau, East Asia Airlines, Hainan Airlines, Shanghai Airlines and Xiamen Airlines. These airlines together provide services to 13 mainland destinations including Beijing, Changsha, Chengdu, Fuzhou, Guilin, Guiyang, Haikou, Hangzhou, Kunming, Nanjing, Shanghai, Shenzhen and Xiamen. Comparing the present number of flights operated with the capacity entitlement granted in the old MOU, the used frequencies by these airlines have not yet reached saturation. Despite this, with the continuous rapid growth of the entire economy of China including the Pearl River Delta Region, and the opportunities driven by the economic boom of Macao, there are great potentials in the expansion of the air transport market between the two places. The two aeronautical authorities believe it would be necessary to put in place a liberal framework in advance so as to attract more airlines to exploit new routes and pave way for the future growth. The signing of the new MOU also indicates the support given by the Central Government to Macao in diversifying its economic activities. The AACM delegation also took the opportunity to pay an official call to the Vice Minister of CAAC, Mr. Gao Hong Feng. During the meeting, President Chan thanked CAAC for its long-term support and assistance given to Macao’s aviation. Both sides exchanged opinions on issues regarding the beyond points and the air traffic management of the Pearl River Delta Region. Vice Minister Gao indicated that CAAC will make a deeper study and aim at resolving these issues. They also hope that there will be stronger cooperation between both parties, especially in technical aspects such as air traffic management, airworthiness and flight standards. End. Destinations: Beijing, Shanghai, Guangzhou, Shenzhen, Kunming, Dalian,. Chengdu, Tianjin, Hangzhou, Xiamen, Fuzhou, Xian, Chongqing, Qingdao, Urumqi, Nanjing, Guilin, Changsha, Wuhan, Ningbo, Haikou, Shenyang, Shi Jiashuang, Harbin, Sanya, Zhangzhou, Jinan, Nanchang, Nanning, Guiyang, Shantou, Huangshan, Wenzhou, Lijiang, Wu Yishan, Zhangjiajie, Hohhot, Hailar, Yanji, Jiamusi, Qiqihar, Mudanjiang, Weihai, XishuangBanna, Lhasa, Kashi, Yinchuan, Yichang, Changchun, Taiyuan, Hefei, Luoyang, Beihai, Yantai, Meixian, Zhanjiang, Lanzhou.