Airlines jostle for parking space in Yangon

Airlines jostle for parking space in Yangon

Private airlines are proliferating in Myanmar, hoping to capitalise on a tourist and business travel boom, and demand from upcoming international events such as the SEA Games in December and ASEAN meetings next year.

Besides national carrier Myanmar Airways International, there are seven local airlines, and just last week four new ones were given permission to start operations, Myanmar's Department of Civil Aviation (DCA) said over the weekend.

But there will be no place to park aircraft, and while tourism is booming, it is growing off a very low base and will be constrained, too, by infrastructure shortages - so the anticipated millions may not actually arrive very soon.

Parking at Yangon International Airport, which uses an old air force base with only one runway, is booked up, the DCA said.

Over the past year or so, the number of airlines using it has grown from 14 to 22. The new airlines will have to park their aircraft in Naypyidaw and Mandalay.

All that will change only when Myanmar's new US$1 billion (S$1.3 billion) Hanthawaddy International Airport is commissioned in December 2017.

The airport, located about 50km north of Yangon, will be nine times larger than the current airport, have two runways and be able to handle up to 12 million passengers annually.

But winning bids for the construction of the facility have yet to be announced. And nobody is holding his breath.

Mr Aung Gyi, managing director of Golden Myanmar Airways, which flies to Bangkok and Singapore, told The Straits Times he is sceptical the new airport will be commissioned on schedule.

New airlines may start up, but the aviation sector is still in its infancy, he said. His airline will expand from one aircraft to four by the end of the year.

Yangon remains the only logical choice as a base for airlines, he added. But the passenger terminal is already overcrowded.

It handled three million passengers last year - slightly above its 2.7 million capacity - and is due for an upgrade to enable it to handle six million.

It is not commercially viable for airlines to split their fleets between Naypyidaw and Mandalay, Mr Aung Gyi said.

Naypyidaw has negligible tourist traffic and little business traffic, while Mandalay is a tourist destination. Yangon is the country's business and tourism hub, he said.

"Growth will be constricted; infrastructure has not been integrated with growth and there has been no planning for civil aviation," Mr Aung Gyi said.

The country is still drafting a civil aviation policy, which is likely to be ready only next year.

In an interview with the website ch-aviation recently, Air Bagan's chairman Htoo Thet Htwe said the airline's internal market research showed the volume of domestic travel rose 48 per cent in 2011-2012 over the previous year.

But the increase has slowed to 5.4 per cent in 2012-2013. The airline is a subsidiary of Htoo Trading, which is controlled by the country's richest man Tay Za.

The infrastructure deficit is hurting grand tourism plans. Mr Aye Kyaw, a member of the Hotel and Tourism Entrepreneurs Association, noted that the cost of travel in Myanmar is about three times more than that in neighbouring countries.

"Myanmar has become infamous around the world for its high hotel prices," he told Myanmar- based wire agency Mizzima News last month.

All this seems not to have deterred the new startups - FMI, Yadanabon, Saga and Apex.

FMI already operates charter flights out of Yangon, with aircraft leased from Myanmar Airways. Yadanabon and Saga will be based in Mandalay, and Apex and FMI in Naypyidaw, the DCA said.

Mr Imtiaz Muqbil, a Bangkok-based travel industry analyst, warns of a "gold rush" mentality.

"Anyone can set up an airline, and then some will go bankrupt," he said.

Mr Thuta Aung, chief executive of Hamsahub, a consultancy in Yangon, said in an e-mail: "What's noticeable is that Myanmar-based airlines lack strategy and foresight and market research."

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