Okay...
1. Lunging doesn't necessarily mean the bird is going to bite. Your bird could be playing the "made you jump" game.
2. This is also a test to see what we can get away with. Are you in charge of me? Or am I in charge around here?
One of the ways macaws measure fear is if they can make you jump. Showing fear to a macaw is not a good thing because the bird then knows he has the upper hand and is MORE likely to bite, not less.
My greenwing lunges at me, AND I BEAK WRESTLE WITH HER GENTLY NOSE TO BEAK... IT'S A FORM OF PLAY... (UNLESS YOU JUMP - THEN IT'S AN AH-HAH MOMENT...)
Keys to a lunging macaw.
(1) Remain calm. Don't jump. Don't flinch.
(2) Gently but firmly make a fist (nothing for the bird to latch onto) and use the palm of your hand to push back on the bird's beak.
(3) If he attempts to latch on TWO FINGERS on the upper portion of the beak where he can't reach you controls the beak. That beak may be powerful, but the scrawny little neck? Not so much. GIVE THE COMMAND NO BITING! GIVE THE BIRD YOUR UNHAPPY DIRTY LOOK FACE, AND HOLD ONTO THE BEAK FOR A SECOND.
(4) The push pull method. If he's up top and lunging and playing those evil macaw tricks, when he goes to lunge he will be off balance.
(a) when he lunges meet him head on with your hand, and push back on his beak. He won't be expecting this.
(b) Then before he recovers hold onto his beak, and pull forward, putting the bird off balance.
(c) As he starts to lose his balance, swipe your other arm under the bird's feet, so he will have to step up or risk falling over.
You now have a shocked macaw on your arm, and have ahold of his beak so he cannot bite you. THAT'S STEP UP.
BEFORE YOU LET GO OF HIS BEAK, GIVE THE COMMAND "BE NICE!" AND BE PREPARED TO EITHER GRAB HOLD OF HIS BEAK AGAIN, OR DROP HIS LITTLE BUTT TO THE FLOOR IF HE ATTEMPTS TO LATCH ON.
IF HE GETS DROPPED TO THE FLOOR HE HAS TO SIT THERE A MINUTE AND THINK ABOUT WHAT HE JUST DID. HE DOESN'T GET OFF THE FLOOR UNTIL HE STEPS UP NICE!!!
These games generally do not stop until you put a stop to them, and the bird knows you are not afraid of him and you mean business.
The more you "permissive parent" the more you tell the bird that this is okay to do. Each time he gets away with it, you just positively reinforced the behavior.
All macaws test. ALL OF THEM! This is a test. Pass the test.