Domestic Airlines Need Mergers, Partnerships to Sustain
Domestic Airlines Need Mergers, Partnerships to Sustain
Myanmar Times, 07 Mar 2019
URL: https://www.mmtimes.com/news/domestic-airlines-need-mergers-partnerships-sustain.html
There is a need for domestic airlines to merge or form partnerships with foreign airlines in order to sustain themselves in the longer-term.
Stakeholders believe that the way forward for domestic airlines, which continue to be loss-making due to lower number of passengers and higher costs, would be to either merge their operations or form partnerships with foreign airlines.
Ticket prices remain high despite the larger number of domestic airlines and the more intense competition, putting off air travelers. Tour operators noted that domestic air tickets were far higher when compared to other countries, making it an obstacle for tourism.
Minister for Hotels and Tourism U Ohn Maung told the media recently that domestic airlines must be able to operate in a level playing field with foreign airlines.
He had previously suggested that domestic airlines should look for partnerships among themselves if they wanted to sustain their business and cut costs.
Despite foreign airlines being able to enter joint ventures with domestic airlines to operate local routes, the lack of business has not made it commercially viable.
Directorate of Hotel and Tourism deputy director general Daw Khin Than Win said although Myanmar and Cambodia signed a MoU for a direct flight between Bagan and Angkor, the route has not started operating as there were few passengers and unprofitable.
As for foreign airlines wanting to partner with domestic airlines, there have already been several unsuccessful attempts, notably by All Nippon Airways and Air Asia. The law allows for the foreign partner to hold a 49pc stake.
Stakeholders believe that the way forward for domestic airlines, which continue to be loss-making due to lower number of passengers and higher costs, would be to either merge their operations or form partnerships with foreign airlines.
Ticket prices remain high despite the larger number of domestic airlines and the more intense competition, putting off air travelers. Tour operators noted that domestic air tickets were far higher when compared to other countries, making it an obstacle for tourism.
Minister for Hotels and Tourism U Ohn Maung told the media recently that domestic airlines must be able to operate in a level playing field with foreign airlines.
He had previously suggested that domestic airlines should look for partnerships among themselves if they wanted to sustain their business and cut costs.
Despite foreign airlines being able to enter joint ventures with domestic airlines to operate local routes, the lack of business has not made it commercially viable.
Directorate of Hotel and Tourism deputy director general Daw Khin Than Win said although Myanmar and Cambodia signed a MoU for a direct flight between Bagan and Angkor, the route has not started operating as there were few passengers and unprofitable.
As for foreign airlines wanting to partner with domestic airlines, there have already been several unsuccessful attempts, notably by All Nippon Airways and Air Asia. The law allows for the foreign partner to hold a 49pc stake.