After Boom in Burma Flights, Seats Are Left Empty
By Kyaw Hsu Mon 21 January 2014
RANGOON — Fierce competition among airlines operating in Burma is set to continue in 2014 as demand for flights takes time to catch up with a boom in the operators offering new routes, according to industry experts.
Some 28 airlines are now flying international routes to and from Burma, up from 21 in 2012, with most international flights linking the Burmese commercial capital Rangoon with Bangkok.
That includes two local carriers, Myanmar Airways International (MAI)—the formerly state-run airline now majority-owned by tycoon Aung Ko Win—and Golden Myanmar Airlines, a recent startup from CB Bank chairman Khin Maung Aye that is already linking the Rangoon to Singapore and Kuala Lumpur, as well as Bangkok.
Visitor numbers to Burma still are increasing, with 2.044 million international arrivals at the Rangoon International Airport in 2013 compared with 1.929 million in 2012, according to Department of Civil Aviation figures. But growth has slowed, and competition has seen some local carrier discontinue flights recently.
The large number of flights on offer has led to overcapacity, said MAI sales and marketing executive Aye Mra Tha.
“Before 2012, only MAI and Thai Airways International were running regular international flights to Bangkok, but now about six airlines are on this route. It means that no airlines have been full of passengers in their schedule flights since mid last year. Now there is more competition,” Aye Mra Tha said.
According to MAI figures published by analysts the CAPA Center for Aviation on Tuesday, the airline’s passenger traffic in 2013 went up by 4.6 percent.
“Although there were a lot of tourists coming in during 2013, we do not have new customers because more airlines are sharing this market. We’re trying to attract them with better services and promotions, that’s why we dare not create new routes for regular flights except charters recently,” Aye Mra Tha said.
“International airlines are expecting that Burma is a new market for them, that’s why they come in quickly. But the market is not that big, because business people are not yet coming to Burma as much as expected.”
He also said MAI is planning to open a flight between Rangoon and Seoul, South Korea, early this year, although the flight schedule has not yet been decided upon.
Local operator Asian Wings, which last year was formed in a joint venture between a Burmese company and Japan’s All Nippon Airways (ANA), will become an international airline and begin flying between Mandalay and Chiang Mai in northern Thailand from Jan 29. ANA bought a 49 percent stake in Asian Wings for US$25 million in August.
Asian Wings director Lwin Moe said the new route to Chiang Mai involves a code-sharing deal with Burmese tycoon Tay Za’s airline Air Bagan.
Lwin Moe said Asian Wings was not getting involved in the over-saturated Bangkok-Rangoon route, but wanted to link Burma and Thailand’s second cities.
“We’ll try to operate this route because there are a lot of tourists coming from Chaing Mai to Upper Burma. We thought we can make a market through this route,” Lwin Moe said
Asian Wings would also soon link Rangoon and southern Thailand’s Phuket, he said, adding that new flights to Cambodia’s Siem Reap and Vietnam, were also planned this year.
Lwin Moe said the heightened competition would only increase when the Association of Southeast Asian Nations’ “Open Skies” policy, which is intended to break down barriers to regional competition between airlines, begins in 2015.