Economy

Still Flying High as Competition Closes In: Myanmar Airways International

By Kyaw Hsu Mon 3 August 2015

RANGOON — Founded in 1993, Myanmar Airways International (MAI) is a veteran of Burma’s airline scene. In 2010, the KBZ group acquired an 80 percent stake in the airline and assumed full ownership from January 2014. The airline plies several international routes, including to Thailand, Singapore, Thailand and Malaysia, and is eyeing expansion. Aye Mra Tha, a senior executive at MAI, spoke with The Irrawaddy about the company’s future plans and how it will meet stiff competition from other regional airlines.

Burma is expected to draw more tourists now it has concluded several visa exemption deals with ASEAN countries, including most recently Thailand. Which regional airlines are likely to enter the local market?

Now regional airlines are coming to operate in Burma. For example, most of the airlines in Thailand have now entered Burma and so has the Vietnamese airline VietJet Air. Airlines from other regional countries will also come to Burma soon.

From which countries do most travellers to Burma come from?

Most foreign visitors enter Burma by transiting in Bangkok, Thailand. Most business travelers are from Thailand and Singapore. Usually, most tourists are from these two countries also.

The ASEAN open skies policy will take effect at the end of the year, what challenges are local airlines likely to face in 2016?

Though it is scheduled [to take effect by the end of 2015], the policy might take two more years to be implemented. However, local airlines need to start preparations now. Local airlines are already facing competition from international airlines. As soon as that policy takes effect, a large number of international airlines will come into Burma and there will be fairly tough competition on the market. MAI is facing tough competition even now, and every airline has to step up their promotion, such as giving away discounted tickets and providing better services.

Our citizens want to travel with low ticket prices. So we have to reduce prices to meet competition from other low-fare airlines. At present budget airlines are providing more services. It seems they are vying for market share.

Does MAI have a plan to transform itself into budget airline?

No, not yet. But we are improving our services. MAI is usually chosen by Burmese citizens as it flies regionally from point to point.

Many budget airlines have entered Burma. To which countries does MAI plan to extend its flights?

For the time being, we are flying to countries including Thailand, Singapore, India and China. We have launched charter flights since 2013. We have plans to expand our network through code-sharing with other airlines. Airlines can’t just stand alone. They have to cooperate with as many other airlines as possible. Now we have agreed to code-sharing with Korean and Malaysian airlines and Indonesia’s Garuda so that we can survive for a long time. As for charter flights, we fly to Japan and Korea and also to Hong Kong if there are gems emporiums. At present, we operate with four planes.

Some airlines have reported losses in recent times. What has been the overall situation for MAI over the past 22 years?

It depends on management. Airlines need huge investment to launch and additional investments are also needed. Now with increasing competition, it is not easy to survive. An airline can survive for a long time only with massive injections of cash from various sectors. It is not easy to attract and retain customers. It calls for service and a large amount of money.

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