One of Asia’s Final Frontiers Poised for Growth

AIN Air Transport Perspective » May 5, 2014
A Myanma Airways ATR 72-500 stands ready to taxi at Tachilek Airport in eastern Myanmar. (Photo: Gabriele Stoia)
April 29, 2014, 9:01 AM

Long hindered by political and economic sanctions, Myanmar has emerged as one of the remaining frontier markets in Southeast Asia. Since the 2012 elections, the Thein Sein Administration has taken great strides to unlock the country’s economic and tourism potential. A highly competitive market has developed in just two years.

Eight local carriers serve Myanmar’s domestic market and three more—Apex, FMI and Saga—all plan to launch operations this year. A ninth carrier, Myanmar Airways International, operates scheduled international service to Southeast Asian destinations.

State-owned national carrier Myanma Airways operates the largest fleet, with a combined total of 12 aircraft, including four ATR turboprops and a Fokker F-28. The carrier plans to lease 10 Boeing 737s, the first of which it expects to arrive next year. While the carrier’s sole international destination remains Gaya, India, the airline harbors ambitious plans to expand into the relatively underserved North Asian market by next year. Myanma boasts the country’s largest domestic network, serving 24 airports from its hub, Yangon International Airport.

Last year Yangon captured 47 percent of the total domestic travel and nearly all international traffic in and out of Myanmar.

Air Bagan and Air KBZ lead in weekly seat capacity, combining for 60 percent of the market. But local carriers have struggled to make a profit. Out of the 10 members of the Association of Southeast Asian Nations (Asean), Myanmar posts the lowest domestic load factors. However, last year the country attracted $4 billion in foreign direct investment while passenger traffic grew by nearly 50 percent. Although an overwhelming majority of visitors traveled by land, combined tourist numbers surpassed two million. The government expects three million visitors this year.

The expectation of such rapid tourism growth and Myanmar’s proximity to India, China and mainland Southeast Asia spell tremendous potential for international markets. The country’s leaders aim to transform Yangon into a major Asean hub by 2020 with new air service agreements, the promotion of national airlines, network expansion and infrastructure improvements. The government has invited private-sector participation in some 30 airport development projects.

 

 

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