Macau’s airport was born during a wave of building new or replacement airports in southern China’s Pearl River Delta region largely caused by China’s then paramount leader Deng Xiaoping touring southern China in 1992 andencouraging economic development.
Just about every wealthy city drew up plans for an airport. Of the major fi ve within about 40 miles or less of each other, a heady mixture of politics and economics surrounded theircreation:
Shenzhen, immediately north of Hong Kong, had started in a small way in 1991 but became international in 1993, and was already looking at becoming a reliever airport for a very crowded Hong Kong Kai Tak Airport. It is now the Chinese mainland’s fourth busiest airport after Beijing, Shanghai andGuangzhou.
Guangzhou, southern China’s major centre, needed a long time to get moving, fi nally opening a“greenfield” replacementNew White Cloud Airport in2004 with massive developmentpotential for up to six runways.
Hong Kong replaced Kai Tak with a giant new airport at Chek Lap Kok, alongside Lantau Island in the New Territories, in July 1998 after a year’s delay. The new airport was started under British rule in Hong Kong and was supposed to be opened before Hong Kong’s return to China in 1997, but this proved impossible to achieve. It has already opened a second terminal and is talking about adding a third runway and third terminal.
Just north of Macau, in May 1995 Zhuhai opened a large new airport that ever since has been widely viewed as a white elephant and an economic millstone around the provincial authorities’ collective neck. A joint venture between Zhuhai and Hong Kong’s Airport Authority to manage Zhuhai has seen the airport upgraded and services increasing, and it is hoping to turn the corner fi nancially in a few years.
In November 1995, Macau opened its brand new airport in what was widely seen as a sop to the territory from its Portuguese rulers before the then colony was handed back to China in December 1999. A local airline, Air Macau, had been set up the previous year – it is now owned by a grouping of major Chinese carrier Air China (with 51 percent of the airline), TAPAir Portugal (20 percent), former gam-bling monopoly STDM with 14 percent,Taiwan’s EVA Airways (5 percent), theMacau government (5 percent) andMacau investors.
No one, but no one, expected Macau’s airport to be anything but a tiny, sleepy aviation backwater. But with the growth of southern China’s industrial base in line with China as a whole becoming the workshop for the world, it was realised that Macau could (a) have a niche market for airlines not serving Hong Kong and (b) complement Hong Kong with extra capacity. Macau could and did trade traffi c rights with some abandon, far more easily and rapidly than, say, Guangzhou.
The results have been startling. Macau’s offi cial statistics show cargo rising from 76,000 tonnes in 2001 to just over 227,000 tonnes in 2005. The airport has benefi ted hugely from the political impasse between China’s mainland and Taiwan, whereby there are no direct air services between the two (except for special passenger charters on specifi c holidays). This so-called Cross Straits trade shunts mainland-Taiwan cargo via Hong Kong and Macau.
Apart from the Cross Straits trade, Macau received a huge boost from the United States West Coast ports’ strike in 2004. But this fl attened out in 2005. That year, Air Macau moved into leasing large freighters and became the dominant air cargo operator in Macau.
It still leases cargo aircraft, but has recently bought its own new A300-600freighter.
In 2006, a decline started in air cargo fi gures, with the year showing 220,500 tonnes handled. This year, the total for January-April was only 57,800 tonnes, compared with 73,700 tonnes for the same period last year. For the short to medium term, the trend is downward. This is a result of airport and services growth within China. Much of the former leakage of trade to the US and Europe from northern China south to Macau and across to Taiwan for transhipment is now being handled by Beijing and Shanghai, though each of those airports is under pressure. Chinese traders don’t need to ship via Macau and Taiwan as much as before– the Cross Straits trade is dying.
Is this the time to be building a new air cargo terminal in Macau? For those with a short-term view, the answer would have to be no, and indeed there have been rumours that the new terminal and its land would be switched to other uses. But the terminal is all but completed – it is due to be opened in July, cargo-handling equipment and a massive new X-ray machine have been installed and the future – medium tolong term – looks bright.
The reason for optimism is Macau’s ambition to become Asia’s Las Vegas– the gambling capital of the region.At present, the vast majority of Macau’svisitors are mainland Chinese intenton gambling. That’s going to change.From this year, there are more than37,000 new hotel rooms being builtor planned, tripling the present stock,with just about every major hotel namein the world intent on jumping in.Many of these rooms are part of resorts,with the intention of transformingMacau from being a very short-termstopover during a tour of southernChina into a genuine destination inits own right.
The overall customer base will inevitably move upmarket – some of the new hotels are fi ve- and six-star premises, each with several signature restaurants. That means a huge demand for fresh foodstuffs and for high-end consumer goods such as jewellery, watches and the like. The lack of space for large-volume storage in Macau means just-in-time delivery – and that means inbound air cargo.
It also means having faith in the future, and fi nding ways to fi ll the gap for the next two years or so. Apart from the airport owner and manager, CAM, active support for generating new cargo is also coming from Menzies Macau, the ground handling, cargo logistics and aviation support services provider. Menzies Macau is a joint venture between Britain’s Menzies Aviation (the majority shareholder) and China National Aviation Corp. (China’s top aviation body), Evergreen Airways Services (Macau) Ltd. (Taiwan’s EVA Airways company in Macau), Air Macau and f ve local businesses.
Jeremy Denton, Menzies Macau’s manager – ramp and cargo services, explains that Menzies has stepped outside its original remit by organising trucking services to bring cargo from Guangzhou to Macau’s airport. This, he says, is neutral so far as individual airlines are concerned, so they are happy to use the service.
It’s run as a not-for-profi t service, aimed at enhancing Macau’s access to air cargo. But, as he says, “We’re not doing this from an altruistic point of view. We are aiming at benefi ting fromramp handling for the cargo.”
Menzies is also supporting the airport’s work to set up a barge service for cargo to come to Macau from Shenzhen and Shekou port, on the other side of the Pearl River. This will avoid the current route overland to Hong Kong and then by barge to Macau, and will cost about one-third as much. Denton points out the competition from Hong Kong, which he describes as “a very pro-active airport”, as well as wealthy – Hong Kong, he says, can invest in places such as Zhuhai and Hangzhou and then wait a while to get a result, and has opened up a lot to cargo.
Macau has an apparent cost advantage over Hong Kong, but Hong Kong remains a natural gathering point, and it takes time and money to get cargo from Hong Kong to Macau by sea.
With Zhuhai next door and Hong Kong just across the Pearl River, it might be thought that Macau is facing a commercial squeeze – barge services between Hong Kong and Zhuhai are being considered, for instance. But Denton stresses Macau’s advantages: it’s a 24-hour, seven days a week operation, not just for fl ights but for customs services, too, and has very short cut-off times for outbound cargo – typically two hours for cargo leaving in the bellies of passenger aircraft, and four hours for freighter services. Inbound cargo can be released rapidly – as little as 45 minutes from arrival, though the norm is one hour from passenger aircraft and two hours from freighters.
He adds that, like Hong Kong, Macau is virtually a free port. Also, when licensing is necessary it is achieved quickly, and Macau’s Aviation Authority is very open.
Charters, for instance, usually take only 24 hours to arrange. A further bonus is that Menzies has had no claims for cargo or baggage theft, says Denton: “It’s a very small community. It just doesn’t happen.”
For now, the challenge is to bridge the gap between changing circumstances, with resorts making the difference and offering opportunities – a fl ood of tourism will mean larger aircraft with more belly space to fi ll, for instance. So CAM, Menzies and its partners are busy reintroducing Macau to big international freight forwarders in a major marketing drive to remind them of its advantages. As Denton puts it, “We are trying to kick-start some of that growth.”
It’s not just the airport and its operators that face challenges before a rich future can be realised. The surge of new casinos, hotels and restaurants has produced an employment and training bottleneck, as well as the start of a substantial rise in expectations among current and would-be employees.
Some outsiders worry that Macau’s authorities may have problems managing the massive changes that are inevitable in a society that is changing so rapidly. But then, Macau has always been a place to gamble, and while this is another high-stakes game, it looks as though it’sone where Macau will be a winner.
