The Myanmar Airline Industry Is Grounding Their Operations


The airline industry in Myanmar is grounding operations due to the competitive market. The potential in Myanmar is seen as an opportunity by ANA Holdings in Japan. In 2100, Myanmar transitioned to an elected government. This caused a boom and numerous organizations became a part of the aviation market. Private airlines doubled visitor traffic by March of 2013. Eleven companies competed for business while the numbers increased another ten percent during the next three years.

One of the top Myanmar conglomerates is FMI Air. The carrier was established in 2012 and provided domestic routes between Naypyitaw and Yangon. The airport lounges offered free access to increase traffic. The gross domestic product per capita has exceeded $1,200 with flights from Mandalay to Yangon priced at 45,000 kyat or $32.The middle class is unable to afford frequent flights making the main clientele Myanmar’s wealthy and foreigners.

The persecution of the Rohingya minority in the country decreased flight demand for foreign tourists. The traffic is under the sixty to seventy percent required for a profit. With only three planes, the company is in the red. Two additional domestic carriers have grounded operations and turned in their air operator certificates. To reduce costs, Myanmar National Airlines joined with Mann Yadanarpon Airlines for several domestic routes in April. For more information please visit Your text to link….

Myanmar enables foreigners to own a maximum of 49 percent of the airline operations for domestic routes. They may help restructure the airline industry or develop international routes by partnering with domestic airlines. The most active foreign player is ANA Holdings. They feel Myanmar is the right location for a hub joining Southeast Asia and China. The cheapest carrier in Southeast Asia is Malaysia’s AirAsia. They once discussed a partnership with FMI Air proving the only foreign airline looking at Myanmar is not ANA.

FMI Air has hopes of creating a partnership with a foreign airline and restructuring to resume operations. The Department of Civil Aviation in Myanmar may not authorize foreign capital because they are protecting the domestic companies. When civilian rule was established, the belief was the middle class would be expanded and domestic demand would explode. The foreign capital meant to raise incomes, fuel the economy and raise consumption is decreasing. This has impacted the infrastructure plans for the airport. The potential Hanthawaddy International Airport still remains on the drawing board for construction companies including the Changi Airport Group from Singapore and JGC from Japan.

Source: Wings Journal

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