Budget airline Viva Macau's first flight is expected to take off on December 5.

"We hope to make our first flight to the Maldives. After that, we will fly to Jakarta... also in December," Viva Macau CEO Andrew Pyne said yesterday.

The Macao-based airline had planned its maiden flight to Jakarta. "But because the approval procedures turned out to be more complicated than we expected, we changed our first destination to the Maldives," Pyne said.

The company is likely to get its flight licence in about a week.

"After getting the approval, we will start selling tickets through our official website, call centres in Shenzhen and the service counters at Macao International Airport," he said.

"We estimate that more than 75 per cent of the tickets would be sold through travel agencies at the destinations that our planes will fly to."

Speaking after the airline signed a contract to outsource its cargo management services to Cargo Counts, a spin-off of Germany's Lufthansa Cargo, Pyne said: "Cargo transportation is an important element of our business, accounting for over 20 per cent of our projected revenue."

"We are pleased to be in a partnership with Cargo Counts, one of the biggest cargo management companies in the world.

"Outsourcing our cargo services to Cargo Counts is in line with our low-cost strategy," Pyne said.

Cargo Counts Managing Director Georg Midunsky said the contract would be valid for three to five years, during which "Cargo Counts will handle all Viva Macau cargo business, irrespective of where its planes fly to".

"Our cargo management services for Viva Macau will begin with its first flight to the Maldives," Midunsky said.

But the contract doesn't mean Viva Macau will transform itself into a purely freight carrier, Pyne said. "We still position ourselves as a passenger airline."

To keep the operations cost low, Viva Macau is trying to hedge 25 to 50 per cent of the jet fuel needed next year.

"Now is a good time for hedging (the fuel) because the oil price is comparatively lower than the previous months... we are in talks with a couple of consultants, and we hope to get it done before Christmas, the time when the oil price is expected to rise again," Pyne said.

As one of the 18 discount airlines that have emerged in Asia in the past three to four years, Viva Macau hopes to capitalize on the increasing demand for air tickets to and from Macao, the world's highest-earning gaming centre.

With gambling accounting for half its GDP, the number of visitors to Macao is expected to reach 21 million by the end of this year.

"Over 80 per cent of them would be from Hong Kong and the mainland," Pyne said. "That is why we are focusing on attracting potential passengers, especially from the mainland's Pearl River Delta region."

Viva Macau's talks with government officials of Macao and the Pearl River Delta region on how to attract more passengers from the mainland began three months ago.

"The negotiation is going well... we will offer a kind of package service to potential passengers (from the mainland) so that they can stay and take a tour of Macao for at least a day for a very reasonable price before actually flying on our planes to their destinations," Pyne said.

With about 60 per cent of its flights to be chartered, and the rest scheduled, Viva Macau expects to start medium-and long-haul flights to destinations in Thailand, Viet Nam, India, Japan, and to Dubai, Seoul, Sydney and Moscow from 2007.

"We are also considering flying to Hawaii and other destinations in North and South America and Europe.

"We hope to start making operating profit from the end of the first operation year, though the margin could be as tiny as 1 or 2 per cent," Pyne said.