Since the initialing of the bilateral Air Services Agreement between the Civil Aviation Authority of Macao SAR (AACM) and the Ministry of Foreign Affairs, Japan (MOFA), in 2009, the legal framework for the operation of scheduled air services between the two places has been established. The signing ceremony of the Agreement was held on 10 February 2010 in Macao following the recent completion of the internal legal procedures for the signing by the two Governments. The ceremony witnessed the first air pact to be officially signed after the establishment of the new SAR Government. The signing ceremony was held at 11:00am in the Multi-Function Room of the Government Headquarter, which was presided by the Chief Executive, Dr. Fernando Chui, as the Guest of Honour. The signatories were the Secretary for Transport and Public Works, Mr. Lau Si Io and the Consul-General of Japan, Ambassador Shigekazu Sato. To establish the legal framework for the operation of scheduled services, AACM and MOFA held air consultations in Tokyo last year in which both sides reached consensus on the provisions and initialed the bilateral Air Services Agreement. In accordance with the Agreement and the present Record of Discussions (ROD) between Macao and Japan, both parties can designate more than one airline; the designated airlines of both parties can fly to all points in each side; no restrictions are imposed on the capacity, except that the Macao designated airlines face capacity limitations on the Tokyo route. Commencing 28 March this year, Air Macau will operate 3 weekly scheduled flights between Macao and Tokyo (Narita Airport). The operation of scheduled air services between Macao and Japan started in 2006. While joining the delegation of the SAR Government, Air Macau and the tourism industry to Japan in that year, AACM held informal consultations with the Ministry of Land, Infrastructure, Transport and Tourism, Japan (MLIT) and signed an ROD in which both parties agreed to allow their designated airlines to operate 3 flights a week between the two places. But the point granted to the designated airline of Macao was limited to Osaka only. In 2008, both parties met in Macao for talks on liberalizing the provisions. The airlines of both sides were then allowed to operate scheduled services between Macao and all points of Japan with no limitation on capacity; but for Tokyo, the airlines of Macao do not have the scheduled services right but are only permitted for charter operations. In 2009, AACM and MLIT met again in Japan for a new round of discussions of further enhancing the air transport market between the two sides. In the meeting, AACM pointed out that Tokyo is a famous tourist destination for Macao as well as for the entire Pearl River Delta Region. The demand for the air transport market between Tokyo and the Region is great. It is therefore essential to realize scheduled flights between Macao and Tokyo to further expand the market. The discussions were concluded with the signing of the present ROD. Presently, Air Macau operates a daily flight between Macao and Osaka; Viva Macau flies to Tokyo with 4 weekly frequencies. Apart from these two points, in order to meet the demand for air services between the two sides during festive seasons, the two airlines have flown to other Japanese cities such as Sapporo, Kita Kyushu, Fukui, Kogoshima, Miyazaki, Fukushima, Toyama, Okinawa and so on with charter operations. In accordance with the data of the Statistical and Census Bureau, the number of Japanese tourists to Macao increased from 122,184 in 2004 to 379,241 in 2009, with an average increase of 30% year on year. Japan ranked the fourth position in the inbound tourist market in Macao. Despite the global financial crisis resulting from the economic tsunami in 2008, the number of Japanese tourists to Macao still reported a remarkable growth. Among the Japanese tourists to Macao, only less than 10% came to Macao by direct air link. Both sides foresee a big potential in exploring the air transport market between the two places. Other guests attending the signing ceremony were the Commissioner of the Ministry of Foreign Affairs of the Central People’s Government in Macao SAR, Mr. Lu ShuMin, Chief of the Cabinet of the Chief Executive, Mr. Tam Chon Weng, representatives of the Japanese Consulate in Hong Kong and the Macao aviation industry.