Competition scary for Myanmar’s airlines

 Myanmar’s growing popularity as a tourist destination and the increase in investor interest is good news for airlines based in the country, but competition will intensify from regional players, aviation experts warn.

Yangon-based media quoted Brolin Consulting’s, Stuart Barwood, as saying: “The next 12 to 18 months will be a testing time for Myanmar-based airlines as they will have to learn quickly, or risk being marginalised by foreign carriers.”

He added: “Sanctions … caused a gap in commercial knowledge and experience in the airline sector, which needs to be addressed quickly in order to give airlines the ability to compete with international companies.”

Myanmar is set to join the rest of ASEAN in adopting “Open Skies Policy” in 2015 under ASEAN Economic Community rules. It will allow ASEAN registered airlines greater access to Myanmar’s skies. At first it will apply to major point-to-point services to capital cities or commercially important destinations.

It does not include rights to operate domestic sectors in a country, just the key gateway points. Already neighbouring airlines are increasing services to the capital Nay Pyi Daw and Mandalay.

An aviation expert at Myanmar Carlton Consulting in Yangon, Dominique Savariau, agreed that sanctions had played a role in stunting the industry’s growth, but despite restraints the Ministry of Transport had not done enough to develop the industry.

“The transport ministry has missed the global view. They have not answered the question: What kind of development do we need over the next 10 years.”

Most of the country’s airlines are not profitable. They are run for prestige as they say something about the investors’ credentials and standing in business circles, he noted.

Sourced: ttrweekly