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A budget airline, called Macau Asia Express, has been established with the aim of carrying more passengers between Macao and other East Asian destinations.

The firm was set up yesterday by Air Macau, China National Aviation Co (CNAC) and Shun Tak Holdings Ltd.

Air Macau will own 51 percent of the new joint venture, and ST-CNAC, a joint venture between CNAC and Shun Tak, 49 percent.

The low-cost airline is one of a number of similar firms that are looking to cash in on the Pearl River Delta tourism boom.

It will initially operate on new routes into the Chinese mainland and other Asian destinations, with a focus on markets in Macao and the Pearl River Delta.

The airline, with a registered capital of US$30 million, is expected to make its first commercial flight by the end of this year.

It plans to operate flights to about 20 cities on the Chinese mainland and in the Asia-Pacific region.

Air Macau, which is 51 percent owned by CNAC, will help the low-cost airline apply for more traffic licences from the Macao authorities.

Air Macau is allowed to fly to 30 mainland cities, but only nine routes are currently utilized.

Analysts believe the establishment of the budget airline could improve the low utilization rate of Macao's traffic rights.

"The airline will help attract more tourists from the region to Macao and boost the city's profile," said an analyst.

"With such an airline in place, some medium-income residents on the mainland will be able to visit to Macao and Hong Kong."

Packages promoting overnight stays in Macao, where accommodation and food are much cheaper than in Hong Kong, will also be developed.

At present, most tourists choose to stay in Hong Kong and pay a brief, day visit to Macao. Hong Kong is a one-hour ferry ride away from Macao.

Macao has been working hard to boost its tourism industry and change the city's image as a gaming city in an attempt to reduce its reliance on the gambling sector.

The city received a record of more than 18 million tourists in 2005, up 12.2 percent from a year ago.

That number is expected to reach 20 million this year, an official from the Macao Government Tourist Office said earlier this month.

Eyeing this lucrative market, a number of budget airline operators, such as Jetstar Asia and Tiger Airways, have already established flights to Macao.

(China Daily January 25, 2006)