Tag Archives: travel myanmar

Aviation sector’s downward spiral

Published in the October edition of Myanmar: All That Matters

Mandalay International Airport. Photo: Sherpa Hossainy
Passengers board a flight at Mandalay International Airport. Photo: Sherpa Hossainy

Myanmar’s economy is on the rise and tourism is at its highest point in decades, but that alone has done little to help the country’s struggling aviation industry, which experts worry is being hampered by low safety standards and oversaturation in the market brought on by new carriers.

In 2010, just 791,000 tourists came to Myanmar. The Ministry of Hotels and Tourism is targeting as many as 5 million tourists by the end of this year after posting a record 3.5 million tourists and US$1.14 billion dollars in revenue last year. The rise in arrivals and the privatization of the aviation sector has spurred an influx of six new airlines – which now stands at a total of nine – in a country of only a few million fliers.

Realizing the market potential of Southeast Asia’s largest country, Myanmar’s civil aviation authorities have for years sought to upgrade its severely outdated airports, but a lack of regulation in addition to a profit-first mentality adopted by most airlines has resulted in airlines and authorities skirting international safety standards.

As a result, Myanmar’s air accident rate was nine times higher than the global average in 2013, U Win Swe Tun, director general of Myanmar’s Department of Civil Aviation (DCA), told Reuters.

Mandalay's airport terminal. Photo: Sherpa Hossainy
Mandalay’s airport terminal. Photo: Sherpa Hossainy

Htoo Group’s Air Bagan,which is owned by tycoon U TayZa, was ranked in January by AirlineRatings.com as one of the world’s most dangerous airlines following a number of incidences in recent years, including a fatal crash that killed two people at Heho Airport in Shan state on December 25, 2012.

But they are not the only ones. Many of Myanmar’s magnate-owned airlines have been the subject of minor accidents including Myanma Airlines, Air KBZ and KMA Group chairman U Khin Maung Aye’s Golden Myanmar Airlines.

“There are concerns over safety standards of some airlines operating within Burma. The [Foreign Commonwealth Office] can’t offer advice on the safety of individual airlines,” the British government’s overseas protection agency, the Foreign Commonwealth Office, states on its website.

To make matters worse, many of Myanmar’s 69 airports lack the capacity to follow international practices that would otherwise bolster the industry as the government spends just $12 million a year on maintenance. Among the issues that befall the airports include the absence of modern safety equipment, poor runway conditions, untrained staff and in some cases, air traffic controllers, who still perform their duties on paper.

“Yangon airport has a lot of constraints – the space is inadequate and the building and facilities are old,” said Air KBZ’s U Khin Maung Myint, deputy managing director of Air KBZ.

Air KBZ has a fleet of eight carriers, while most domestic airlines have two or three. It ranked second behind after national carrier Myanmar National Airways in passenger numbers last year. He said that foreigners now make up 46% of Air KBZ’s customers – a dramatic increase since the reform process began in 2011.

Beginning of the end

With the number of new airliners hitting a critical mass last year, profits in the local aviation industry have plummeted and many airlines have already been forced to consolidate their operations by installing code sharing arrangements with other airlines or closing down routes altogether. Golden Myanmar Airlines started operations in 2012 with 15 destinations – including international ones – but by 2015 it had reduced its route to just three destinations.

All routes between Yangon and Chiang Mai have been suspended, whereas 12 months ago at least four airlines, including Thailand’s Nok Air serviced the route.

“People tend to think that the aviation industry is a good move economically, but the reality is that scheduled carriers have a very thin profit margin,” said U KhinMaungMyint.

Bagan Airport. Photo: Sherpa Hossainy
Bagan Airport. Photo: Sherpa Hossainy

In mid-August, Air Bagan announced on its Facebook page that it was suspending all flights until repairs were carried out on its fleet of three aircraft.

“We find that business remains tough in Myanmar. There’s no question that it’s an irrational market. Everybody just follows everybody – there’s no real scheduling going on,” said Trevor Jensen, CEO of FMI Air, which is owned by Serge Pun and launched scheduled flights in May 2015.

Despite the growing number of foreign tourists flying throughout Myanmar, mergers and acquisitions are both necessary for the sector to once again become profitable, said FMI Air’s Mr. Jensen.

“Myanmar has 2.2 million passengers per year and nine domestic airlines. In Australia, there are 57 million passengers and four airlines. Having too many airlines means the customer loses out because if airlines aren’t making money they can’t provide a quality service,” he said.

He added that the majority of foreign fliers are mostly wealthy or on business, while the low-income segment has yet to make an impact in the otherwise expensive Myanmar market place.

There is some light on the horizon though, with several carriers, including Myanmar National Airways, Air Mandalay, FMI Air and Myanmar Airways International purchasing new aircraft – the latter inked a deal to lease 10 Boeings from GE Capital Aviation Services in February, with the first delivered in June.

The need for action

With the airlines struggling to survive, Myanmar faces another major challenge as it appears little will be done to repair most of its badly outdated airports despite promises that the government would handle the situation.

Onboard an FMI Air flight. Photo: Jessica Mudditt
Onboard an FMI Air flight. Photo: Jessica Mudditt

In late 2013, DCA announced that it would privatize at least 30 of Myanmar’s airports, however,that program has been delayed until at least the end of 2015 as it is necessary to focus on developing and upgrading airport projects in Mandalay and Yangon, said U Win Swe Tun.

In the meantime, FMI Air is trying to offer its customers a better flying experience by providing lounges at each airport it flies to. So far it has lounges in Yangon and Nay Pyi Taw and is in talks with Mandalay’s new management.

“The airport in Sittwe [Rakhine State] is nothing more than a shed really – there’s nothing we can do there. So we’ve bought  a really nice property in the centre of town which we’ll open as a lounge, ticket sales office and coffee shop and we’ll provide a shuttle service to the airport,” said Mark Turner, director of customer experience at FMI Air.

The recent announcement that $1.4 billion Hanthawaddy International Airport project in Bago has been delayed again, this time to 2022, has disappointed many.

The idea of constructing the country’s biggest airport was first conceived in the nineties but put on ice until 2004. When discussions resumed in 2013, officials said it would be ready by 2016. However talks with the original tender winner, a Singapore-led consortium,and DCA stalled in early 2014. DCA has since pushed back the opening date from December 2019 to 2022, with state media reporting on August 28 that there have been hold-ups in obtaining Official Development Assistance (ODA) loans to spend on the $1.4 billion project.

DCA’s deputy director confirmed that more time is needed to complete negotiations about securing ODA. There have been murmurs that some feel that the location of Bago, which is 80 kilometers from Yangon, is off-putting to some.

“People often say that Bago is too far from Yangon, but with improved infrastructure, such as the planned elevated road, or a high speed train, it will be convenient,” U Khin Maung Myint said.

He was also upbeat about the delay.

“There’s a lot of mumbling during the planning stage: but when it comes to construction, things will move quickly.”

Light at the end of the tunnel

Still, not all of Myanmar’s airport projects have failed. Yangon’s domestic terminal will double in size and is expected to be completed by mid-2016, while a consortium called Pioneer Aerodrome Services, which is a subsidiary of Stephen Law’s conglomerate Asia World, was selected in August 2013 to expand the international airport’s capacity from 2.7 million to 6 million passengers a year by 2015.

Mandalay International Airport is also slated for an upgrade and will become the country’s foremost cargo hub when the upgrade is completed next year, said U Ne Win of DCA.

FMI Air cabin crew
FMI Air cabin crew

He said that safety standards are also likely to improve when ASEAN’s ‘Open Sky Policy’ comes into effect later this year, establishing a regional safety authority that is modeled on the EU’s Aviation Safety Authority.

“We are still having discussions on most issues. It took the EU nearly 20 years to develop its single market. We are at the inception stage, so we need some time,” he said.

What is more, slight upgrades in domestic airline services have also begun to take hold over the past year as some are now offer online flight bookings, while the country’s first airfare aggregate website launched in June.

Flymya.com founder Mike Than Tun Win said that 95% of purchases are made by foreigners, which signals that there is a market eager to explore new growth in Myanmar’s aviation sector and that greater competition will raise service standards and offer more to what could only be described as disillusioned consumers.

“Airlines services offered in Myanmar are very similar and the routes are the same, therefore airline prices do not vary significantly. However, travelers do tend to want to look for the lowest price possible,” he said.

Writing the travellers’ Bible: An interview with the coordinating author of Lonely Planet Myanmar

Published in Mizzima Business Weekly on 30 May 2014 

Simon Richmond at Naung Daw Gyi May Tha Lyaung Reclining Buddha in Bago.
Simon Richmond at Naung Daw Gyi May Tha Lyaung Reclining Buddha in Bago.

Simon Richmond is the coordinating author of several editions of Lonely Planet guidebooks on Myanmar, including the most recent edition of 2011, as well as the upcoming edition, which will hit bookstores on 1 July. The British-born writer talks exclusively to Mizzima Business Weekly about what it takes to produce the world famous guidebook in Myanmar, which is a country that has swiftly emerged from being an isolated pariah state to one of the new “it” destinations for travellers.

You’ve written or contributed to 50 Lonely Planet titles since 1999 – how did you first get this much coveted job?

Actually, I’ve lost count of how many Lonely Planet books I’ve worked on! I first contacted the company about working for them when I was working in Sydney as a freelance journalist in 1994. I had to do a writing test – which is still the case for would-be authors today – and having passed that I was then eligible to pitch to editors for guidebook gigs. However, soon after I started working for Rough Guides (writing the first editions of their guides to Japan and Tokyo, where I’d lived previously) – so I actually didn’t do my first job for Lonely Planet until 1999, which was covering Kazakhstan for their Central Asia guide.

Monk praying inside the Botataung Paya. Photo: Simon Richmond
Monk praying inside the Botataung Paya. Photo: Simon Richmond

Can you please explain what’s involved in being a coordinating author, the sections of Myanmar you researched for the upcoming edition, and how many other writers were involved?

Apart from me, there were four other authors working on the guide. My role, aside from covering Yangon and Around Yangon destinations, was to refresh the “Plan Your Trip” inspirational and planning front section of the guide and the “Understand” and “Survival” sections at the back. These latter two sections provide background information on topics such as politics and culture, general transport details and practical bits and pieces. I collaborated with the destination editor to create the initial brief, which we refined as went along, depending on what as a team we discovered on the ground. There’s often quite a bit of change to negotiate, as some researchers find that the areas they’re covering need either more (or sometimes less) space within the guide.

Is it fair to say that updating the previous edition was a mammoth task due to the political and economic changes that occurred since the December 2011 edition was published?

Yes, that’s pretty much true – large sections of the guide have been rewritten. Because the guide has been selling so well, we also had the luxury of being allotted more pages – areas that had been cut out of previous editions of the guide (because travel to them was either impractical or not permitted) have been reinstated.

What do you consider the biggest changes for travellers in Myanmar now as compared with the past, whether it be an increase in the number of more affordable hotels, the introduction of ATMs, new destinations that were previously off limits or providing better value for money?

I don’t think there was much so much of a problem with affordable hotels in the past – they were affordable but pretty basic (if not hideous to stay at!). In Yangon and Bagan we noticed that a few more decent hotels are opening up (though not nearly enough to meet peak demand). The introduction of ATMs and the ending of the black market for currency exchange is a real benefit, as is the government’s loosening of restrictions on where travellers can go – although there’s a long way to go before this really will make a difference due to a general lack of tourism infrastructure in these places. Overall, I’d say the biggest change has been in the atmosphere of Myanmar – the sense of fear, lack of trust and nervousness about everything in daily life that I’d witnessed on previous trips has dissipated – particularly in Yangon. Not to downplay ongoing human rights issues, but the change of atmosphere is truly wonderful and makes the country a much more pleasant place to visit.

Boy selling palm frond hats on Chaung Tha Beach. Photo: Simon Richmond
Boy selling palm frond hats on Chaung Tha Beach. Photo: Simon Richmond

What challenges remain in terms of Myanmar being able to attract a greater number of budget travellers?

Actually, as long as people don’t mind roughing it – that is, staying in the cheapest hotels, using buses to get around, or eating at street stalls – Myanmar is a breeze for budget travellers. The main problem at present comes during peak travel times, when demand for accommodation outstrips supply in the four main tourism hot spots of Yangon, Bagan, Inle Lake and Mandalay. But there are plenty of other equally interesting and less busy parts of the country to visit instead. Myanmar isn’t great either for those who are looking to party late into the night – although the influx of expats and returning Burmese to Yangon is shifting the dynamic there.

Lonely Planet writers in the previous edition wrote under aliases, whereas the 2014 edition will include your real names. Could you please explain the reason for this?

When we researched the 2011 edition, Myanmar was just beginning the process of moving away from a military dictatorship that had ruled the country for decades. Applying for a visa back then took a month and saying you were a journalist of any sort would have meant being rejected. Although there were signs that the country was opening up and becoming more liberal, we couldn’t be sure that this process would continue in a positive direction. So we took the decision to write under aliases so that if the political situation did deteriorate again, we’d still be able to safely apply for visas in the future.

Today, Myanmar is thankfully in a position where the likes of exiled media groups such as Mizzima can now operate within Myanmar. International news organisations such as the BBC have also set up. It took just two days to get my visa this time and I had no fear about writing on the form exactly what my profession was. There is thus no need to use alias this time around.

What’s the best and worst part of being a travel writer?

The best is that I get to spend a lot of time in places I really love and can deepen my knowledge through meeting many interesting people – it’s an ongoing education and a huge amount of fun.

The worst? Having to trudge on with the daily demands of on-the-ground research regardless of the weather or my physical state – I really do try to pace myself these days, but we only have a limited amount of time and budget to work with and there’s absolutely nothing I can do about the monsoon rains or scorching heat!

Cook on Yangon to Pathein ferry. Photo: Simon Richmond
Cook on Yangon to Pathein ferry. Photo: Simon Richmond

What do you love about travelling in Myanmar?

The people are Myanmar’s greatest asset – they are kind, friendly, gently curious about the world and outgoing. I’m a great foodie so sampling all the different kinds of cuisine here is also a pleasure. Some of the temples, which are so central to the nation’s spiritual life, are amazing and I really love the lingering historical legacy of the British Empire in downtown Yangon – there’s nowhere else like it in Asia.

Where do you predict will become Myanmar’s “hottest” new destinations?

Actually, after years of advising people to visit Shwedagon Paya and then hop quickly on from Yangon, I’d say that the city is certainly now a place to linger and experience – there’s a great buzz about it. Southern Myanmar is really opening up with overland access to the Tanintharyi Region and the beautiful islands of the Mergui Archipelago, and Mawlamyine deserves more attention from travellers. Trekking possibilities in Eastern Myanmar are also opening up as more of that region no longer requires travel permits. And using Pathein as a base to explore the lush Ayeyarwady Region is also worth a look – especially as a new railway line between Pathein to Yangon is set to open next year.