A prized air operating licence has been put up for tender in Macao, offering overseas carriers an opportunity to establish a foothold in the world’s largest gambling market.

Front runners in the race include Malaysian low-cost carrier AirAsia, according to the Financial Times. It has held preliminary talks with the government of Macao, which is one of the two special administrative regions of China, alongside Hong Kong.

The opportunity has arisen following a row between the low-cost carrier, Viva Macau, and the government. The region’s civil aviation authority revoked the budget carrier’s air operator certificate on 28 March.

On April 1, Viva challenged the revocation as “unprecedented” and “legally invalid”.

The Macao government said the decision was for “public interest and to protect Macao’s image as a tourism city”, following a dispute between Viva and its fuel supplier led to widespread flight cancellations.

The Macao government could choose to reinstate Viva’s AOC, or continue talks with other airlines about entering the market, which is dominated by state-owned Air Macau.

A Macao deal would also offer the possibility of taking advantage of Macao’s “fifth freedom” rights to operate flights to the US.

AirAsia boosts Australia services

AirAsia has also announced it will begin operating twice daily flights between Kuala Lumpur and Melbourne, as well as adding a new service to Perth. The airline already operates daily services to both Perth and Melbourne from Kuala Lumpur, and will now double it offering to 14 times per week.

Last month, Richard Branson’s low-cost airline V Australia launched its new Johannesburg to Melbourne route, whilst Qantas announced late last year that it would fly the A380 superjumbo between Melbourne and London.

Melbourne Airport, which recently opened the first part of a AUD330 million (€225 million) new terminal building, reported an eight percent rise in international traffic between 2008 and 2009.