MAI expansion has its risks

YANGON The Centre for Asia Pacific Aviation says Myanmar Airways International’s route expansion to Osaka and Seoul is risky due to high competition in these markets.
The centre said MAI will compete in the South Korea and Japan markets with larger foreign carriers and eventually Myanma Airways, a government-owned domestic carrier, aiming to launch services to North Asia in 2015.
Osaka will become MAI’s sixth destination and its first destination in Japan. It will start flights 8 October with three nonstop flights weekly from Yangon. On the return from Osaka the flight will stop in Phnom Penh, giving Japanese tourists the opportunity to combine Cambodia with Myanmar.
inside no 3Seoul Incheon will become MAI’s seventh destination, 26 October, when it flies five weekly flights to South Korea. The route is Yangon-Seoul-Macau-Mandalay-Yangon. Macau is a technical stop to allow refuelling. Passengers can disembark at Mandalay.
MAI’s decision to launch Korea and Japan services in October can be seen as a competitive response to Myanma Airways’ launch and rebranding, which is expected to be completed in early 2015 leading to its first international services.
Owned by the military ruled government, Myanma Airways gained a slice of MAI as part of the agreement to allow it to fly in 1993. It had a similar policy with all emerging airlines requiring them to give it shares in exchange for operating approval.
Myanma Airways concentrated on domestic services and was only used as a last resort by overseas tour operators due to its poor safety record. Now the government is keen for the carrier to start international services and compete in its own right.
Myanmar’s domestic market is small at 3.8 million passengers according to 2013 statistics. It grew by 8% in 2013, while international services expanded by 32% in 2013.
MAI currently accounts for about 9% of the international seat capacity in Myanmar, according to CAPA and OAG data. Its share will exceed 10% at the end of October this year after services to Korea and Japan are launched.
ANA is currently the only carrier in the Myanmar-Japan market and operates a daily service from Tokyo Narita to Yangon using 767s.
KAL currently offers one daily flight from Seoul (using A330s during the northern winter months and 737-800s during the summer) while Asiana operates only two flights per week (767s year-round).
MAI will have about a 27% share of capacity from Yangon to Seoul during the peak winter season while KAL will have about a 56% share (once its flight transitions back to the A330) and Asiana will account for the remaining 17%.

sourced:ttrweekly.com