Myanmar Government Pushes for Airline Mergers

 - March 11, 2019, 10:11 AM

The Myanmar government wants its local airlines to merge in an effort to mitigate competition for a shrinking market after five airlines—Asian Wings Airways, FMI Air, Apex Airlines, Air Mandalay, and Air Bagan—suspended operations over the past 15 months. The carriers operated mainly domestic fights. High fares and a poor economy coupled with poor passenger loads all contributed to the suspensions.

According to Ministry of Transport and Communications (MTC) official Maung Tin Tun, the airlines likely will not resume operations. MTC assistant secretary Aung Ye Tun added that the remaining loss-making airlines should seriously look into the options available to them to help sustain the ailing market. 

Six carriers remain in the market: Air KBZ, Golden Myanmar Airlines, Mann Yadanarpon Airlines, Myanmar National Airlines, Myanmar International Airways, and Yangon Airways. The government owns Yangon-based Myanmar National, while private entities own the rest. Myanmar law permits a foreign carrier to acquire as much as 49 percent of a local airline.

ANA Holdings, parent company of All Nippon Airways, had twice failed to establish a joint venture airline in Myanmar. In 2013 it agreed to acquire 49 percent stake in Asian Wings Airways but it withdrew the following year due to intense competition in the domestic market.

In 2016 ANA received approval from the Myanmar Investment Commission to establish a joint venture with local company Golden Sky World to target inbound investors and the growing middle-class traveling out of the country. The Japanese company dropped the plan in November 2017, when it failed to secure an air operator certificate.

In 2018 budget airline AirAsia had also expressed interest in establishing a JV carrier, but those plans fizzled as well.