A new airline is coming into the scene that will offer consumers not low cost, but "real choice".

WOW!Macau, a Macau-based start-up, will be a "low fare, high productivity" and "real choice carrier", said Andrew Pyne, chief executive officer.

"You will have a choice when you book your tickets, from no frills to full service option," said the former Cathay Pacific executive.

The independently-owned airline, which has set November 2005 as its target launch date, is looking at both longhaul and regional routes.

It is looking at destinations such as Honolulu, Milan, Lisbon, Brussels and London. Pyne said the basic no-frills fare to Europe would start from US$200.

Las Vegas, he said, also has potential.

Regional routes are the more sensitive issue. Air Macau currently has the monopoly on air rights ex-Macau to the region, but Pyne said WOW!Macau has "very strong support from the Macau government and the airport authority".

Pyne said that a regional network was key to WOW!Macau as "you can't make it on just longhaul".

He is eyeing destinations such as Japan, Korea, the Philippines, Taiwan, China and Indonesia. Singapore is off the radar screen as he feels it is an over-served market.

He said Macau alone would not be big enough to support two carriers, but if you took in Hong Kong as well as the Pearl River Delta, the population base was 11 million and if you expanded the radius further, it was 50 million.

As Macau developed as a destination, in line with the developments on Cotai Strip, he said the traffic would switch from outbound to inbound. "I see a shift in two-three years' time – that will be the tipping point."

Pyne said WOW!Macau decided not to take the low cost route because it felt that the model, developed in the US and Europe, would not work in Asia in the longer term.

"One, they are competing against very efficient, high standard, high quality airlines. Two, there are no anti-trust laws and the big Asian carriers can get together to fix the price and three, to survive in Asia, you need cargo.

"None of the low cost airlines have cargo."

He said WOW!Macau, which was looking at three wide-bodied and three narrow-bodied aircraft (B767 and B777), expects to earn 25 percent of its revenues from cargo.

He said that 34 percent of China's exports worldwide came from a 50-mile radius from Macau.

On distribution, he said that while ideally, the internet would be the way to go, realistically it would have to rely on travel agents and call centres and 7-Eleven distribution as well.

"We would love all passengers to book online but that's sometime down the road," he said, adding that Cathay Pacific, despite its heavy investments in its website, still did only 0.6 percent of sales through the internet.

Lessons he will take from the low cost airlines currently operating in the market include – don't make your turnaround time too tight, don't ignore cargo and don't alienate the travel agent.

At the same time, he will also bring onboard lessons from his experience in a "legacy airline".

"It is difficult for legacy airlines to squeeze costs out of the system because they are tied up with long-term contracts with staff and airport authorities. There's also the long-term relationship with travel agents and it's hard to squeeze costs out of distribution.

"It is easier to start afresh."

He added, "Our approach is not to be another Cathay Pacific. While airlines like Cathay and Singapore Airlines have excellent service, it's a very scripted service.

"We want to empower our staff to be more spontaneous, zany and quirky. Airlines such as JetBlue have achieved that.

"The key will be in how we reward and motivate our staff."


Yeoh Siew Hoon is a weekly contributor of 4Hoteliers.com writing the popular column, The SHY Report which highlights the weeks' trends and issues in the hospitality industry.



Asia's most respected travel editors and commentators, Yeoh Siew Hoon.

Siew Hoon, who has covered the tourism industry in Asia/Pacific for the past 20 years, runs SHY Ventures Pte Ltd. Her company's mission is "Content, Communication, Connection".

She is a writer, speaker, facilitator, trainer and events producer. She is also an author, having published "Around Asia In 1 Hr: Tales of Condoms, Chillies & Curries". Her motto is ‘free to do, and be'.

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