Gaurav's Blog

Myanmar- The Next Thailand

Myanmar, a nation of 53 million people is the latest & possibly one of the last big markets to open up to the Airline/travel Industry.  Can it become the next Thailand?

Thailand is a nation of 70 million people and a neighbour to Myanmar. Both share many of the geographical characteristics including a long, thin peninsular tail that allows for a long beautiful coastline that is a huge draw for the tourists that Thailand has so successfully tapped into. In the last 15 years, tourist arrivals in Thailand went up from 8 million (1998) to more than triple the numbers- 27 million in 2013.  To put it in perspective, it’s like the whole population, every single person, in Australia & New Zealand visiting Thailand every year. It wasn’t always like this. In 1970, Thailand use to get less than a million visitors. Myanmar received roughly 1 million visitors in 2012. Hence the comparison with Thailand seems appropriate.

Domestic Services

Currently, Myanmar lists down 43 Airports in total, of which several are unpaved and unsuitable for scheduled services (See map below with all Myanmar Airports marked).

As a matter of fact, only 18 seem to be connected with a scheduled service as per the schedules available. 

See list of Airport below. Those highlighted yellow are the ones that have a scheduled service available today. Of this, 5 airports namely, Yangon, Mandalay, Nyaung-U/Bagan, Nay Pyi Taw- the new capital city and Myitkyina are those that could be considered right for frequency led growth.

In addition to this, Sittwe (previously Akyab) and Dawei (previously Tavoy) have potential for serious growth if the proposed port projects come through. Also Thandwe Airport in the west of the country receives a good number of flights with tourists bound for the Ngapali beach, which is widely considered the best developed beach resort in Myanmar today.But as in Thailand, there is no doubt a number of high potential beach destinations could be developed along the Andaman sea peninsular stretch of Myanmar. 

International Services

After many years of isolation, Myanmar is finally rapidly gaining connectivity to the International world. Existing services are clearly skewed heavily towards the east of the country given the cultural & historical affinity, in particular to Thailand, as it has been a major transit point for International passengers, even when the country was relatively closed to the outside world. Singapore is the second most important destination, as most of the investment coming into the country is currently been channeled through the financial hub in Singapore. 

Several new services started in 2012 with Japan, Korea, Hong Kong, Taipei, China, Vietnam and Malaysia all quickly getting connected.  Towards the west, Qatar Airways started services, with the hope of serving the Europe/US bound traffic. Condor also operated seasonal charters for 1 season. While Traffic to Europe will eventually develop with tourism numbers rising as more infrastructure comes online, particularly from the UK, Germany, France and possibly Russia just as is received by Thailand, it is too thin currently for a carrier from Myanmar to get into long haul Intercontinental routes that can only be done with wide-body aircraft. These markets could be easily accessed through hubs in the Middle East or through partnership with European carriers who may be interested in flying directly. 

However, several critical gaps still remain on the short haul sectors that can be easily and profitably filled

Following current opportunities could be considered: 

China

Myanmar is already relatively well connected to China, with services to Beijing, Guangzhou, Hong Kong, Chengdu, Kunming and Nanning. However, services to Shanghai could be considered at some stage to further develop the tourist market.

India

India remains a huge opportunity. Only Kolkata and Gaya are connected today however, opportunity exists to reconnect the capital New Delhi to begin with. In addition, Imphal, capital of Manipur could be considered as an extension of Yangon-Sittwe flight, if the port project comes through.

Myanmar has a sizable population of Indian descent. They are either from Bengal or are of Tamil origins. Kolkata is already connected. However, Chennai could be connected. In addition to trade and VFR traffic, there is also a considerable opportunity for people traveling for medical treatment.

Indonesia

Jakarta is the only other major city in South East Asia that is not directly connected but has reasonably good traffic numbers to start direct services

Cambodia

Phnom Penh remains unconnected but shows potential with over 20,000 annual passengers. 

   

Limitations

The Airport capacity at Yangon’s International airport is currently highly constraint. New capacity will take some time to materialize. Major expansion is not currently possible without sacrificing operational efficiency.

Unavailability of Visa on arrival, particularly for Indian and Chinese nationals is also a restrictive practice affecting faster tourism and trade growth.