Myanmar’s already cluttered airline industry could be about to welcome another carrier into its ranks.
Japan’s ANA Holdings and Shwe Than Lwin-owned Golden Sky World have formed a joint venture and applied to set up an international airline, according to a Transport Ministry official.
The joint venture submitted a “late application” to the outgoing government, which is awaiting approval from the Myanmar Investment Commission (MIC), a director at the ministry’s Department of Civil Aviation told the Myanmar Times.
The airline is “tentatively” named Asian Blue, and will only serve international routes, addedthe director, whose name was not identified by the Myanmar Times. He did not say when the application had been made.
ANA Holding’s equity participation in its new joint venture will be limited to 49%, the director said.
Airline industry sources said that the joint venture had already received approval from the ministry. The department director would not comment on the ministry’s approval process, and said the decision now lay with the MIC.
Myanmar’s Directorate of Investment and Company Administration lists an Asian Blue Aviation Company. Shigeyuki Takemura and Toshiaki Nonaka are listed as directors. Takemura is also the name of a member of ANA Holdings’ board of directors. Ryosei Nomura, public relations manager at ANA Holdings, said that the firm had no comment.
This is not the first time that ANA Holdings has attempted to expand into Myanmar. All Nippon Airways – one of three carriers ANA Holdings owns – signed a partnership agreement in August 2013 with local Myanmar carrier Asian Wings.
Under that agreement, All Nippon Airways was to pay US$25 million for a 49% stake in Asian Wings. It was touted as the first deal between an international airline and a domestic carrier, but the two sides announced the deal had been cancelled in July 2014.
Asian Wings said that ANA was put off by the small size of the domestic market and strong competition from more than half a dozen other domestic carriers. Myanmar has 11 airlines and the ANA Holdings joint venture would be the 12th, the department director said.
By focusing only on international routes ANA Holdings’ new joint venture will avoid the cut-throat competition of the domestic market. But the international sector has no shortage of rival carriers.
“The Japanese entity may manage to attract businesspeople or tourists from its home network,” said Chris Mosebach, director at Myanmar Aviation Centre. “But there’s still so much competition from carriers flying via Hong Kong or Bangkok.”
Among the well-known firms that compete on the Yangon-to-Tokyo route are AirAsia and Malaysia Airlines, which fly via Kuala Lumpur, Vietnam Airlines via Hanoi, Bangkok Airways via Bangkok, and China Southern Airlines via Guangzhou. ANA Holdings’ airline Air Japan also flies direct to Tokyo.
“If you look at Myanmar’s neighbouring countries there are also many smaller, less well-known partnerships with Korean and Japanese investors that have struggled to survive or had their licence revoked, especially in Thailand,” Mosebach said. “Competition is fierce.”