Comment
Too much, too soon
May 1st 2014
No gain without pain is clearly the story for Myanmar’s emerging aviation market. A little more than two years after the country opened its doors to the world, following decades of isolation under military rule, the aviation sector is in overdrive. Read More » Twenty eight foreign carriers now fly to destinations in Myanmar, carrying both tourists and business travelers alike.
Visitors from Japan alone have increased 300% year-on-year for Japan Airlines. Patee Sarasin, CEO of Thai budget carrier, Nok Air, made his first visit to Thailand’s northern neighbor in March. Speaking at an industry conference in Yangon, he said his airline began flying to Myanmar earlier this year. Within three months of launching the route, Thailand-Myanmar passenger loads had hit 70%, one of the fastest growing markets the carrier had recorded.
This surging demand has prompted 28 foreign carriers, of which eight are low-cost operators, to add Myanmar cities to their route networks. But, as would be expected, this passenger enthusiasm for new business and new tourist destinations has its downside. Myanmar aviation does not have the infrastructure to cope with its popularity.
Nor do the local airlines have the staff, funding and even aircraft to compete with their overseas rivals. Privately owned Myanmar Airways International is number ten, with 9.8% of the market, on the list of the top ten carriers flying in Myanmar. In 2009, there were only nine foreign airlines operating scheduled services into the country.
Domestic traffic has grown by 30% since 2004, but international traffic has leapt by 420% in the same period. Eight local carriers are struggling to compete with their more sophisticated rivals, as four more carriers prepare to enter the fray.
Infrastructure is under tremendous pressure. Airports are unable to cope with rising demand. Air navigation equipment is antique, to say the least. The country’s Minister of Transport, Nyan Htun Aung, said his government wants Myanamar to be a major aviation hub in Asia. Its a tough call.
The good news is that local aviation authorities have committed to upgrading facilities and acknowledge the importance of safety in such a helter skelter growth surge. A public-private partnership scheme has been launched to attract foreign investment, but upgrading infrastructure and building new airports won’t happen overnight. Most observers believe more than one local airline will fail before the good times arrive for Myanmar aviation.
