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Viva Macau Runs Out Of Gas, Becomes Latest Airline To Fail

Where: Macau
March 29, 2010 at 3:42 PM | by | ()

What was a distressing albeit kind of funny clusterfark last week: Viva Macau, stranding passengers because their planes ran out of gas, turned into the world's latest airline failure this morning. Late last week the now-defunct LCC announced to waiting passengers that they wouldn't be going to Australia and Japan as planned because, well, the airline couldn't pay for fuel.

The Macau government, which has maintained a large degree of autonomy from Beijing ever since Portugal ceded the municipality to China in 1999, stepped in with a cash infusion. The short-term bailout, which followed a previous one from January, let Viva Macau get many of their passengers to their destinations. But over the weekend the government apparently decided enough was enough, and they pulled the airline's operating license.

If you're looking for the meta on this, there are at least two impacts floating around. Viva Macau was the world's longest surviving low-cost, long-haul airline. Like most LCCs, they eschewed the traditional hub and spoke model in favor of point-to-point transport, pairing airports with each other based on traffic. But unlike most North American and European LCCs, they flew over longer distances, reducing their ability to do turn-arounds and the like. The low-cost, long-haul model hasn't really gained traction outside of Asia. Now it's failed there too, despite Viva Macau doing lots of things right and availing themselves of government-guaranteed privileges. Not promising.

The other obvious upshot is that fuel costs are still hurting the airline industry. Even if economic fundamentals changed, a new bill being drafted in Congress will include "a modest tax on gasoline, diesel fuel and aviation fuel." So for all that the airline industry has done to emerge from the cataclysm of the last few years, there are still political and economic barriers blocking any kind of robust recovery.

[Photo: toomooroo / Flickr]

Related Stories:
· Government cancels operating license of low cost airline Viva Macau [Macau Hub]
· Viva Macau [Jaunted]
· Airline News [Jaunted]

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