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DCA deploys budget, invites tenders to jazz up airports, aviation

High costs and a lack of travelers passing through some of Myanmar’s airports has resulted in at least four of the country’s ten airlines bypassing those locations altogether. Consequently, as many as eight airports have ceased operations in recent years, accounting for a quarter of Myanmar’s 32 domestic airports.

Five out of the eight shuttered airports, which include Pathein airport in Irrawaddy, Hpa-an airport in Kayin, Magwe airport, Coco Island airport in Yangon and Aneesakan airport in Mandalay, have since been converted to military bases. Meanwhile, Kyauk Htu airport, which is also in Magwe, will soon be transferred over to the Ministry of Defense, leaving Pakokku airport and Chanmya Tharsi airports in Mandalay vacant and unused.

“Domestic airlines have stopped flying to these destinations because it is not cost-effective,” U Ye Htut Aung, Deputy Director General of the Department of Civil Aviation (DCA) told The Myanmar Times.

Meanwhile, only two of the ten domestic airlines, Myanmar National Airlines (MNA) and Air Kanbawza, operate on the majority of the domestic routes, according to the DCA.

“Air KBZ operates eight ATR-72 aircrafts to 14 domestic destinations and Chiang Mai, which is in Thailand. But recently, we stopped flying to Dawei, Kawthaung, Myeik and Loikaw due to low demand, which made the routes less cost effective,” said Daw Aye Mra Tha, general manager of Air KBZ.

Aviation budget

But plans have been set in motion to boost tourism and revive the number of travelers at the nation’s airports. By deploying a budget totaling $103 million, the DCA wants to build new airports in promising locations across the country. It will also channel money towards upgrading many of the existing airports.

The DCA earns revenues fees charged to international airlines that operate in the Myanmar flight information region (FIR). In aviation, an FIR is a specified region of airspace in which a flight information service and an alerting service are provided.

On average, about 600 international airlines pass through the Myanmar FIR a day. The airlines pay fees according to the size of their aircraft, with the largest planes paying $600 and the smallest paying $100 each time they pass through Myanmar airspace, the DCA said.

During the 2016-17 fiscal year, the DCA received $80 million from FIR fees alone. Combined with fees collected from the various airports, the budget is now $103 million. “This will be sufficient to build new airport infrastructure and equipment,” said U Ye Htut Aung.

New airports

Already, the DCA is in the process of building up a new K30 billion airport at a former World War II airport location in Falam, Chin State. So far, K200 million has been directed towards developing the Falam airport. When complete in 2022, it will be the first airport in Chin State, capable of handling smaller aircrafts with the capacity to accommodate up to 13 passengers.

Meanwhile, the DCA has also invited Expressions of Interest (EOI) for the upgrading and expansion of Heho airport in Shan State, Kawthaung airport in Tanintharyi Region and Mawlamyaing airport in Mon State. The airports have been earmarked as major domestic airports and will be developed under public private partnerships (PPP).

Last year, Heho airport received 477, 597 visitors, Kawthaung airport received 140, 045 and Mawlamyaing airport received 11,640 visitors. Currently, only MNA operates flights to Mawlamyaing.

Tenders will also be open for the rebuilding of the Mrauk-U airport in Rakhine State under the PPP system after floods led to the suspension of its development in recent years.

The DCA is also working with foreign governments and agencies to develop the sector. For example, the Japanese government has agreed to extend a grant of $42 million in technical support for the upgrade of Nyaung-U airport in Bagan, where extra care must be administered owing to concerns over potential damage to the region’s heritage monuments.

“The Japanese government will grant $42 million in 2018 for the Nyaung-U airport upgrade. We will start construction as soon as we get the grant money. Nyaung-U airport will be able to serve regional flights after upgrades are complete in 2019,” U Ye Htut Aung said. Currently, only ATR-72 and Embraer 190 aircraft are allowed to land at Nyaung-U airport.

International status

So far, the biggest ongoing airport project is Hanthawaddy airport. When complete, it will be the fourth international airport in Myanmar. In fact, the country has been trying to build the airport since 1992, but delays have plagued the project, which is now slated for completion only by 2022.

The airport was originally slated to be built under a joint venture headed by South Korea’s Incheon International Airport Corporation. “The South Korean company won the tender in 2014 for the Hanthawaddy airport project. But they did not have enough money and needed to borrow. So, they wanted a guarantee from the Myanmar government to borrow the money but the Myanmar government did not accept this,” said U Ye Htut Aung.

In October 2014, a consortium comprising Japan’s JGC Corporation as well as Singapore’s Yongnam Holdings and Changi Airports International won a new tender to build and run the airport. “Currently, the consortium is negotiating with the DCA and if they can sign an agreement to proceed by 2018, construction can start in the same year.”

Phase 1 of Hanthawaddy airport will have the capacity to serve 12 million travelers when it is complete in 2022. Under Phase 2, it will be able to serve 20 million travelers and once Phase 3 is complete, a total of 30 million travelers are targeted. The additional capacity is being built on expectations of more tourist arrivals as Myanmar opens up further in the years ahead.

“Before we have the chance to complete the Hanthawaddy airport, there would be an increase of at least 8 million visitors to Myanmar in the next five years. This is more than what the current airports can handle so the additional passengers will be handled by Hanthawaddy airport. That is why it is a must to implement,” U Ye Htut Aung said.

Currently, Myanmar has three international airports. The largest is Yangon International Airport, which will be built to handle 20 million travelers a year. It has already handled 5.45 million passengers in 2016.

Nay Pyi Taw International Airport, which is frequented by only four domestic and two international airlines, has the capacity to handle up to 5 million travelers, while Mandalay International Airport has the capacity to serve 3 million travelers. A total of nine domestic scheduled flights and four international airlines now fly to and from Mandalay.

Source : Myanmar Times

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