At an engineering and maintenance conference held in Singapore on 11-12 September, representatives from three Myanmar carriers were present, and they often found themselves surrounded by various industry players clamouring for a slice of the newly-opened Myanmar market.
Golden Myanmar Airlines (GMA), the country's first low-cost carrier, was set up only last July but has already been wooed by various foreign airlines hoping to tap into the rapidly growing market, its engineering director Amran Bin Sharim tells Flightglobal Pro.
Two weeks ago, Japanese carrier All Nippon Airways (ANA) also announced that it will pay $25 million to take a 49% stake in Myanmar carrier Asian Wings Airways, subject to regulatory approvals.
ANA is apparently not alone. Amran cites VietJet Air and AirAsia as suitors that have approached GMA. The carrier, which is funded by local banks CB Bank and Tun Foundation Bank, however, wants to attain larger scale with higher value before looking for foreign investors.
The carrier only has a 12 year old Airbus A320 which it operates on services between Yangon and Mandalay, and to Singapore and Bangkok. It will take delivery of two ATR 72-600 turboprops by the first quarter of 2014, and plans to grow to a fleet of nine A320s by 2016.
"We're trying to exercise 5th and 6th freedoms and talking to a number of LCCs in the region for some collaboration," says Amran.
He adds that GMA is in deep discussions with VietJet and is "open to a lot of possibilities" including joint operation or cross utilisation of aircraft. VietJet has plans for aggressive fleet growth and GMA is keen to utilise some of these aircraft during peak seasons.
As GMA's fleet grows, the carrier also plans to launch services to Hong Kong and Jakarta.
The only other local carrier which operates international services is Myanmar Airways International (MAI). MAI is 20% owned by the government and 80% by a consortium of banks and other investors. Sources say it hopes to be fully privatised by the end of 2013.
This move away from being state-owned will allow it to change its strategy. Currently, it operates only international services while Myanma Airways focuses on domestic routes.
When privatisation comes through, besides increasing frequencies on existing routes, the carrier will also look to start domestic services. It also plans to upgrade its fleet of six A320 family aircraft - four of which are about 23 years old, and could even add a widebody - likely the A330 - by the third quarter of 2014.
A top executive at MAI adds that AirAsia had also proposed to take a stake in the carrier and revamp it, but was turned down by the government.
At Air Bagan, which has a fleet of three ATRs and one Fokker 100, expansion is also under way. The domestic carrier is sourcing for two additional ATR 72s and considering introducing regional jets.
Its deputy managing director Hlaing Bwa says there are six operators flying the same routes in the domestic market using the same aircraft type. Air Bagan is thus considering regional jets such as the Embraer E-190, to stand out from the competition and appeal to passengers.
Though the Myanmar market - with a population of 53 million - is large, challenges abound because of the lack of infrastructure and the number of players, say the carriers.
There are nine airlines in the country and the civil aviation department also recently granted provisional air operator's certificate to four start-up carriers. Most of the airlines have two to three aircraft and lack economies of scale.
There is a good deal of consolidation talk among local carriers, but these often fail because "everyone wants their own share", says Amran.
Infrastructure-wise, most of the airports are not able to handle even the A320, which is why most domestic players operate turboprops. There is also congestion at Yangon airport, which is fast running out of apron space. Airports at Mandalay and Naypidaw, meanwhile, are underutilised.
The market is also not optimised for LCCs because of the nation's limited technology base. Most passengers pay travel agents cash for tickets, and credit cards are uncommon.
The airlines are also keeping a keen watch on how regulators react to AWA's proposed stake sale - a move that will likely pave the way for more similar foreign investments.
Source: Air Transport Intelligence news
