From Bloomberg:
Air Macau Plans 'Major Strategic Moves' on Fuel Costs (Update1)
By Irene Shen
July 11 (Bloomberg) -- Air Macau Co., controlled by Air China Ltd., is planning "major strategic moves'' as it struggles to cope with jet-fuel prices that have doubled in a year.
Macau's largest carrier will announce the plans "very shortly,'' it said in a statement e-mailed to Bloomberg News today, without elaboration.
Air China may buy out other Air Macau shareholders, the South China Morning Post reported today, without saying where it got the information from. The Macau carrier's backers, which also include gaming tycoon Stanley Ho's Sociedade de Turismo e Diversoes de Macau, will meet this month to discuss a possible capital injection among other options, the newspaper added.
Surging jet-fuel prices have damped profits and forced cuts at carriers across Asia, even as the region's growth fuels travel demand. Air Macau's passenger numbers have doubled over the past five years to 2.4 million, helped by the construction of new casinos in the city, the only one in China where they are legal.
Air Macau Vice President Anabela da Rosa and Air China spokeswoman Rao Xinyu both declined to comment on the Morning Post report.
Taiwan Flights
The start of regular direct flights between Taiwan and China may cause a 60 percent drop in Air Macau's passenger numbers, the Morning Post said. A limited number of nonstop weekend flights across the Taiwan Strait began last week. Prior to that, most travelers between Taiwan and the mainland had to go via a third destination, predominately Hong Kong or Macau.
Carriers including Cathay Pacific Airways Ltd., Hong Kong's largest, are raising fares or trimming services because of rising costs for fuel, most Asian airlines' biggest expense. The increasing prices also forced Oasis Hong Kong Airlines Ltd. to stop flying in April.
Air Macau lost its monopoly on flights to the former Portuguese colony in 2006, when it handed rights for 15 destinations to discount carrier Viva Macau.
Air China, the nation's second-largest airlines, owns 51 percent of Air Macau. Billionaire Ho's STDM has a 14 percent stake. TAP SGPS SA, Portugal's state-owned carrier, holds 20 percent through an investment fund.
Air Macau has a fleet of 19 planes, including five freighters, according to its Web site.
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