Air Macau is going to continue to be the preferred domestic air carrier for the city for at least the next three years. It doesn’t really have any competition, so being the preferred option when you’re the only option is pretty simple. The company has been the only air carrier based out of Macau since 1995 when it was given a 25-year concession, and the government has decided to renew the agreement. It only took a global pandemic for Air Macau to maintain its status.
There had been talk about opening the air space to other carriers when Air Macau’s concession was drawing to a close. However, the coronavirus pandemic got in the way, and the government decided the timing wasn’t right to consider making any drastic changes. As a result, it authorized Air Macau to hang onto its monopoly until the end of 2023, but, after that, changes might be coming. Given the seemingly complete overhaul Macau is exploring with its daily activities, it wouldn’t be surprising to see Air Macau lose its status.
That wouldn’t be good news for the company, which is already reeling from COVID-19-induced losses. Last year, it saw a year-on-year drop in profit of 37% as it reported just $15.9 million, and this year will be even worse because of the pandemic. In September, there was an average of just 30 daily movements, compared to an average of more than 210 each day in 2019. With Macau looking at needing at least two years to recover from COVID-19, Air Macau is going to have a very turbulent flight ahead.
Providing an update to the concession renewal yesterday, the Macau government said in a statement, “The concession contract of Air Macau will reach its expiry on 8 November 2020. Facing the outbreak of the Novel Coronavirus Pneumonia worldwide, the aviation sector is adversely affected and will take a considerable period of time to recover. During this period, it is necessary to maintain the stability of the industry operations. To ensure that Air Macau will continue to provide continual and stable services to the Macau residents as well as to the visitors, the Macau SAR Government extended the concession contract of Air Macau for three years.”
Travel to and from Macau has begun to reappear, but nowhere near the levels needed to assert that a recovery is in progress. The expectation that the Golden Week holiday period might bring some type of relief missed the mark and, even though casino gross gaming revenue (GGR) was up from September, it is still only about 25% what it was a year ago. Not until travelers are more confident the coronavirus is under control will the city really start to see an improvement in numbers.