Slow improvement in aviation infrastructure remains the biggest hurdle that Myanmar must overcome if it is to cash in on the Asean Open Skies or even pursue its dream to become an aviation hub in Asia.
At the Myanmar Civil Aviation Development Conference in March 2014, Transport Minister Nyan Htun Aung announced Myanmar’s vision “that aims at making Myanmar the major logistics hub in Asia”.
A year has passed with some progress. Yangon International Airport and Mandalay International Airport – the biggest gateways – are being upgraded, while the government has awarded the construction contract for Hanthawaddy International Airport.
Yet, joining the second Myanmar Civil Aviation Development Conference last week in Yangon, most industry players agreed that the infrastructure is lagging and posed the biggest hindrance to the development of Myanmar’s aviation industry,
Kyaw Myo, chief executive officer of Mann Yadanarpon Airlines – a local airline – said that implementation of airport construction and upgrading of projects should be faster. He recommended privatisation of state-owned airports to speed up further development of the aviation sector and increase safety.
“We believe that good infrastructure is crucial for high level of safety. In Myanmar, we are now doing a lot for safety. But it is not enough when compared to international safety standards. So far, MAI [Myanmar Airways International] is the only Myanmar airline that has obtained an ISO certificate. Hopefully, MNA [Myanmar National Airlines] will get the ISO certificate soon and we are also striving to get the certificate this year,” he said.
Andrew Littledale, group chief financial officer of Malaysia-based AirAsia, sees that the main challenge to Myanmar’s aviation is the ability of infrastructure to keep up with the growth in demand.
“Increasing passenger numbers will require new and improved airports along with better air traffic control management to cater to the rising number of aircraft movements. The airport expansion in Nay Pyi Taw is an example of the investment that is needed,” he said.
Since the country reopened its doors, the Myanmar authorities are dedicated to improving the infrastructure.
Late last year, the government announced the bid winner for the Hanthawaddy International Airport – about 70km from Yangon. Construction is set to begin in 2016 for completion by 2020, according to the Department of Civil Aviation (DCA). The first phase of the airport project is estimated to cost US$1.5 billion, to include a terminal complex that can handle 12 million passengers per year. Under the second phase, the capacity will be raised to 30 million.
The Yangon International Airport is now being upgraded and so is the Mandalay International Airport. The upgrade projects are scheduled for completion later this year.
Under the upgrade, the Yangon airport’s capacity will be expanded from 2.7 million now to 5.5 million, while the Mandalay airport’s capacity will rise from 3 million to 15 million. Myanmar has a total of 45 domestic airports and four international airports, including the under-construction Hanthawaddy.
Patee Sarasin, CEO of Thailand-based Nok Air, also noted that the lack of proper infrastructure in Myanmar’s domestic airports is the main difficulty in the development of air travel.
“Nok Air used to have flights from Thailand to Mawlamyine but currently, we have to cancel those flights due to the lack of basic infrastructure. The Yangon International Airport is up to international standard but numerous domestic airports are not. Myanmar has a lot of tourist attractions and if the domestic airports improve necessary basic infrastructure, air travel is sure to grow,” said Patee.
For now, there are 25 airlines operating international flights to and from Yangon International Airport. This is on top of over 10 local airlines that operate domestic flights like Air Bagan, FMI Air, Air Mandalay, Air KBZ, Mann Yatanarpon Airlines, and Myanmar National Airlines.
Alexander Knigge, senior vice president (digital) of Emirates, said capacity constraints at the Yangon airport are still a problem. He noted that air travel is correlated to a country’s per-capita income, which is expected to grow in Myanmar. The deregulation through an open skies policy will further accelerate demand as it enables airlines to introduce new routes and increase seat capacity.
Aireen Omar, chief executive officer of AirAsia Berhad, also stressed the need to upgrade the Yangon airport, as Myanmar will see greater international accessibility in the years to come. She also underscored the importance of harmonisation of rules and regulations on licensing, and maintenance.
“Infrastructure is the key to Myanmar’s aviation development. There are a lot of potential for Myanmar to become more developed once the issue is addressed. There must be partnership between airlines and airport authorities,” she said.
While the authorities are urged to upgrade the facilities and come up with incentive programmes, airlines should improve the quality of services and marketing strategies, she said. More new routes will be introduced consequently.
Across Asean, according to the 2014 assessment by the International Civil Aviation Organisation, Indonesia, Cambodia, Vietnam and the Philippines’ air safety is below the global average, while Singapore received a 100 per cent score. While Malaysia, Thailand and Brunei have been improving standards, Laos and Myanmar’s is slightly above global average.
The Myanmar authorities are working hard on the safety front.
Since November 30, DCA has implemented the first phase of Advance Passenger Processing (APP) at Yangon International Airport. APP, used in Australia, New Zealand and other countries, allows the host country to pre-screen air passengers before they arrive in or depart from the country and serves as an additional screening to expedite processing of air passengers and enhance aviation security. When fully implemented, passengers at the airport can look forward to further improvements, as well as being able to use self-service immigration processing (e-gates). The next phase of implementation will include other international airports such as Nay Pyi Taw and Mandalay international airports.
All these are to support the burgeoning growth in the tourism industry. The Ministry of Hotels and Tourism has set an ambitious target, aiming to draw 4.5 million foreign visitors this year and generate $2 billion in revenue. The target showed a 50 per cent increase from 3.5 million last year, which was the highest ever for the country that just opened its doors to outsiders in 2011. Visitor arrivals have increased sharply since 2011, from below 1 million then to 2 million in 2013.
At the Myanmar Civil Aviation Development Conference, Than Tun, managing director of Myanmar National Airlines, said the country needs to improve its airport infrastructure to ensure world-class safety standards and attract more visitors.
“I am really glad that DCA [Department of Civil Aviation] is actively cooperating with private airlines to make things faster than ever. The government must take airport infrastructure development more seriously,” he said.
Shuichi Fujimura, executive vice president of All Nippon Airways, shared the view.
“The biggest challenge is to set up the overall structure required for safe operations and fair competition. Making and implementation of rules should be not only for operations but also for business environment in accordance with global standards,” he said.
Fujimura added that the training of specialists such as pilots, mechanics, air traffic controllers and other experts is required for airline safety and airport operations in Myanmar.
Andrew Herdman, the director-general of the Association of Asia Pacific Airlines, stressed the role of the government in creating a favourable working environment for the airlines.
“The government is responsible for establishing and maintaining effective regulatory oversight in accordance with the ICAO [International Civil Aviation Organisation] guidelines. It needs to ensure that supporting infrastructure, including airports and air navigation services, is timely undertaken and effectively operated,” he said.
Herdman added that the government needs to closely cooperate with various stakeholders, including airlines and other private investors. Airlines need to invest in manpower training and development, particularly for flight crew and engineering support staff, in addition to substantial investments in modern aircraft and other technical support systems.
Sao Thanda Noi, deputy managing director of Air Bagan, said that Myanmar needs to concentrate on facilities and efficiency at the airports. She said that in addition to the government policy, investing in human resources, training and stronger cooperation with the government authorities are needed for any airline eyeing to operate in Myanmar.
“Private airlines need more support from the government. For example, fuel facilities, fuel rates, taxation, and charges/fees [that airlines have to pay] are some critical areas that the government can help us grow,” she said.
Myanmar’s growth opportunity in the tourism sector is huge given that the 2014 numbers of 3.5 million represented only a tiny portion of 97.2 million entering the entire Asean bloc in the year.
The 10 Asean members are now working to complete the Single Aviation Market (SAM) policy by this year. Also dubbed the Open Skies policy, it is geared towards developing a unified and single aviation market in the region. At the Asean Aviation Summit at the Langkawi International Maritime and Aerospace Exhibition earlier this month, Malaysia’s Transport Minister Seri Liow Tiong Lai said the creation of the SAM was a key component of the road map for the establishment of the Asean Economic Community (AEC).
“Asean governments have recognised the importance of air transport for economic development and have designated the industry as one of 12 priority areas in the establishment of the AEC. The liberalisation of Asean’s aviation sector will be a major catalyst for the region’s economic growth by 2030,” he told The Star.
He was optimistic that the policy would go through despite the Philippines not signing the memorandum of understanding yet.
The opportunities are there for all Asean members, as Asean travellers accounted for 53 per cent of total international tourists visiting Asean countries.
At the conference in Yangon, Win Swe Tun, director general of the Myanmar’s Department of Civil Aviation, showed a positive welcome to the policy.
“2015 is definitely a significant year for the aviation sector in Myanmar with the implementation of Asean open skies policy. It will definitely start a new page in the history of civil aviation not only in Myanmar but also the entire region.”
Source: Myanmar Eleven