Macau SAR Government to become Air Macau’s second largest shareholder with USD88m investment

Air Macau shareholders this month approved a second capital restructuring of the carrier as part of which the Macau SAR Government will inject around MOP700 million (USD87.5 million) into the flag carrier. The government noted its objective was to help Air Macau in “upgrading herself" to support the development of Macau to become the “world alluring centre of tourism and leisure”. After this second capital increase, the Macau SAR Government will be the second largest shareholder in the airline after Air China.

Macau's aviation market has struggled since 2007 under a strategic, political and operational stalemate, which has seen the collapse of one of its two airlines and a sizeable contraction in air passenger and cargo numbers. However, interest in Macau is picking up again, as new LCCs emerge in North Asia, namely Korea and Japan. Foreign LCCs and Macau-China Mainland traffic is now driving traffic. Overall, 2011 is expected to be a year of stabilisation for Macau, as it begins to claw back some of the lost ground of the past few years. However, growth will likely remain moderate for the foreseeable future. [1014 words]

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This report contains the following subheadings:

• First capital increase results in record net profit of USD29m after five years of losses
• Increased capital to support introduction of new aircraft and system improvements

This report contains the following charts and tables:

• Air Macau fleet: 21-Nov-2011
• Air Macau route map: Nov-2011