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Fri, Nov 19, 2004 - Page 12 News List

Beijing and Macau sign agreement for more flights

OPENING UP The deal will allow Macau to fly to six more mainland cities, double the number of flights per week, as well as increase cargo flights

AP , HONG KONG

In a gradual opening of China's skies, Beijing and Macau have agreed to give their airlines more flying rights, which could help the gambling enclave establish itself as a gateway for budget travel.

Macau -- a former Portuguese colony that reverted to Chinese sovereignty in 1999 but is still governed separately -- will be allowed to serve six more mainland destinations, bringing the total to 37. Under the agreement, it will also be able to double flights to China to 539, from the current 244, and cargo flights will be increased to 50 per week.

The deal also opens the way for Australian low-cost carrier Virgin Blue Holdings Ltd to set up a new airline in Macau to serve the booming mainland market.

The company, owned by British tycoon Richard Branson, said earlier it is exploring the possibility of providing low-cost service from Macau.

Macau's government has been taking measures to liberalize and boost competition in its tourism-dependent economy. In 2002, it ended a four-decade monopoly held by Hong Kong tycoon Stanley Ho on its gambling industry and has since drawn major investment from Las Vegas casino moguls.

Air Macau Co is currently the only Macau-based airline and Ho holds a 14 percent stake in it. Ho's Hong Kong flagship, Shun Tak Holdings Ltd, said last month that it is in talks with Virgin Blue about the possibility of operating low-cost air services from Macau, but did not provide other details.

Shun Tak did not immediately return a call for an update of the deal yesterday.

Virgin Blue's chief executive Brett Godfrey also declined comment when asked about the deal during a news conference Wednesday.

The Macau government said in a statement that the aviation agreement with China has "paved the way for big expansion in the future."

However, the government said Beijing declined its request to let foreign airlines fly to the mainland through Macau but the two sides have agreed to hold further discussions on this issue.

The deal also does not include access to major cities such as Beijing, Shanghai and Guangzhou, which won't be open to air service from Macau until the summer of 2006.

While part of China, because Macau is governed separately, airline flights to and from the mainland are similar to international services, with passengers required to show travel documentation as they pass through immigration controls and customs.

The enclave draws thousands of gamblers from nearby mainland China and from Hong Kong, just 64km to the east.

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