While many have looked at Myanmar as the tourism and airline last frontier in Asia, disappointment about the evolution of the country’s nascent tourism and aviation industry is visible as three domestic airline suspended their activity in July.
FMI Air is the third carrier in Myanmar to just announce to supend its activity. The airline started its activity back to 2012 and is an affiliate of an important local conglomerate; Serge Pun & Associates. The carrier was offering daily flights from Myanmar’s largest city and economic capital Yangon to the country’s political capital Nay Pyi Taw as well as to Andaman Sea destinations such as Dawei (Tavoy) , Myeik (Mergui Archipelago) and Kauwthaung, Myanmar’s most Southern point.
The airline operated a fleet of four aircrafts, CRJ200 and ATR72-600, claiming to offer a service similar to a private jet company. As an example of its high quality service, FMI Air offered free access to its airport lounges to attract passengers, but that did not help the airline to strengthen its position in a market where 11 domestic carriers compete!
“Operating in Myanmar’s aviation sector has become increasingly challenging,” FMI Air said in a statement Monday. The company decided to suspend all of its activities. It follows two other carriers, Air Bagan and Apex Airlines which stopped their operations earlier this month. Both carriers surrended their air operator’s certificates (AOC) to the authorities recently.
In April this year, Myanmar National Airlines, the nation’s largest carrier, merged its domestic routes with those of private carrier Mann Yadanarpon Airlines.
Myanmar airlines’ problem comes from the fact that demand is not sufficient to sustain the presence of 11 carriers. While air transport boomed from 2010 to 2013, it stagnated between 2013 and 2016, as passengers traffic grew by only 10% during that period.
A major problem is also the fact that ticket prices still remain expensive for most Myanmar citizens compared to train or bus. And foreigners are not that keen to travel extensively on Myanmar domestic airlines as they generally pay fares which are 100 to 200% more expensive than the ones sold to local passengers…
According to data analysis from the Centre of Asia Pacific Aviation (CAPA), Myanmar’s domestic aviation market has grown by 150% this decade and still has huge potential. But they are only three million domestic passengers to be shared now by eight airlines.
Consolidation seems unavoidable. FMI Airlines said to only suspend temporarily its activity and looks now for a foreign partner. AirAsia has been actually in talk with the carrier but announced earlier this year to suspend for now any talk to acquire an airline in the country. The low cost group might soon be back as consolidation of the sector will continue…