Interview: U Than Tun
How can the sector attract more investment?
U THAN TUN: The government is encouraging foreign direct investment (FDI) by creating a more investor-friendly environment. It has invested a lot in the modernisation of the industry, both overall and in the national carrier in particular. This is based on the presumption of eventual increased competition within the industry. However, an airline in a developing country like Myanmar – public or private – must of course work with foreign companies to facilitate equipment needs. This creates investment opportunities for service and equipment providers.
Generally speaking, the aviation industry as a whole is fiercely competitive, and arguably more so in the ASEAN region, where many travel between the member countries. As such, the slow influx of FDI into our sector tends to be not just a function of our status as a developing nation but also due to regional dynamics at play. Even so, there have been some activities in the last two years involving foreign airlines working with domestic firms to form joint ventures. Although not always successful, these sorts of investments over time are likely to increase.
What lessons can be learned from more developed aviation industries abroad?
THAN TUN: I think companies like ours compete well considering the current environment. Management is critical to long-term viability within the industry. Westerners are well known in the business world for best practices in management across sectors. There tends to be heightened concern over safety in the minds of those traveling in developing markets; this must be addressed. I think protocols set forth by institutions like the US Federal Aviation Administration and the European Aviation Safety Agency are a great benchmark to work from in this regard. Of course we cannot forget how incredibly important end-to-end customer service is in a primarily price-competitive environment. All else being equal, those airlines which offer the best experience for customers – from ticket purchase to arrival at their destination – will win out most of the time.
Is there potential for Myanmar to become a regional hub, and how can that goal be achieved?
THAN TUN: Around 50 years ago, Myanmar was the regional hub of South-east Asia. Now, due to political changes opening the country to the world, there has been a huge amount of interest from global investors, governments and tourists. In this sense it feels like the old days. However, it is the latter point, tourism, which is pushing the growth of our airports.
What factors account for recent growth?
THAN TUN: I think one reason is that we have added many new routes. We now fly to Singapore, Hong Kong, Bangkok, Chiang Mai and Bodh Gaya. In 2018 we plan to start routes to Kunming.
What routes are most popular among citizens?
THAN TUN: The most popular are Singapore and Bodh Gaya. Singapore is very popular among people in Myanmar, and that will increase as Myanmar citizens can now travel to Singapore visa free and vice versa. We have two flights a day and the capacity is between 80% and 90% full. Bodh Gaya is another very popular route, mainly for Buddhist pilgrims. Chiang Mai is also becoming more popular.
Which new markets are driving aviation growth?
THAN TUN: South Korea and Japan are very popular and showing an interest; we are considering starting a charter flight to those places as a result. Japanese and South Korean people are very interested to come to Myanmar. For example, flights from Osaka to Yangon travel via Tokyo, so that is a long way. A direct flight from Osaka to Yangon would speed up the journey.
Read More from OBG
