Air Mandalay halts services, cites ‘increasingly challenging’ market

By FRONTIER

YANGON — In another setback for Myanmar’s troubled aviation sector, Air Mandalay has temporarily suspended operations effective from September 4, the carrier said in a statement.

Air Mandalay, which began operations in Myanmar 24 years ago, said it may resume services in the future subject to restructuring and an improvement in market conditions.

The announcement comes after FMI Air ceased operations in July amid higher fuel prices and a slump in the tourism industry that has also forced other domestic carriers in the highly competitive domestic market to halt services.

“It is increasingly challenging to operate in Myanmar’s aviation sector,” Air Mandalay spokesperson Daw May Thandar Win said.

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“Air Mandalay is presently working closely with the government to resolve a number of issues affecting the airline and the aviation industry. The first priority for the airline is to look after the welfare of its employees and their job security,” she said.

The statement said passengers booked to travel with Air Mandalay after September 4 would receive a full fare refund.

Air Mandalay said it had been extremely difficult to operate in Myanmar when the country was under military rule and the target of sanctions.

It said the situation had worsened after the transition to democracy began in 2011, when the approval of new airline licences resulted in “too many domestic carriers, oversupply of seats and intense competition, with airlines suffering heavy losses”.

The challenges faced by Air Mandalay included delays of more than a year in issuing import permits for two Embraer ERJ145 jet planes in 2014-2015 and of nine months in 2017-2018 for approval to import and register an unspecified number of aircraft, the statement said.

It also referred to delays in the Air Operators Certificate re-certification process.

Other domestic carriers reported to have suspended services in recent months include Asian Wings Airways and Apex Airlines, while Air Bagan stopped flying two years ago.

Regional travel industry news website, TTR, reported last month that Myanmar had about 11 airlines registered for commercial operations, with a nation-wide fleet of 60 planes.

“There are far too many airlines to serve a market of 3 million domestic passengers and no more than 400,000 foreign tourists,” TTR said.

In 2016, aviation industry consultancy CAPA-Centre for Aviation said it was “staggering” that 10 domestic carriers were serving a market of just over two million passengers.

In May this year, CAPA said the market had huge potential, but that it “continues to suffer from overcapacity and a lack of profitability” and that consolidation “seems inevitable”.

By Frontier

By Frontier

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