Published on : Tuesday, July 3, 2018
There is a shortage of modern infrastructure and high import bill is driving up the price of jet fuel, making it exceedingly difficult for many local airlines to keep their fleets airborne.
In Myanmar, the DCA has authority under the Myanmar Aircraft Act to revoke the AOC of an airline that stops operations for 60 days. A domestic airline should also operate at least four aircraft. But there are some airlines operating with only one or two aircraft, which is not good for travelers because if there is a breakdown, they will not have spare aircraft allowing them to keep to the flight schedules.
The DCA is cracking down on the industry at a time when many local carriers are struggling to stay profitable. U Zaw Min Aung, deputy CEO of Golden Myanmar Airlines, said his airline recently halved fares on certain routes due to declines in the number of passengers traveling during the monsoon season.
The government says it has already asked the loss-making carriers to merge with their stronger peers to stay viable. Yet, despite having opened up the industry to foreign participation in 2013-2014, in May, it rejected a JV proposal between local tycoon Serge Pun’s FMI Airlines and Malaysia’s AirAsia to set up a budget airline covering Myanmar.
That came just months after Japan’s ANA Holdings dropped its Asian Blue JV with Golden Sky World, owned by local conglomerate Shwe Than Lwin, after the government turned down its application for an AOC, which had been pending for a year. It was ANA’s second attempt to enter the Myanmar market after scrapping a 2014 JV with Asian Wings Airways.
The result is foreigners are charged as much as double the fare for domestic routes to offset the losses made on local airfares. But as Myanmar only sees an influx of tourists during the six-month period between October and March though, for the rest of the year, the airline industry is typically a loss-making enterprise.
The level of airfares for domestic travelers is usually loss-making for us. When it is not travel season in Myanmar, it is common for us to make losses.
In the meantime, the high cost of air travel within Myanmar is already deterring tourists from visiting the country.
Tags: DCA, Golden Myanmar Airlines, myanmar