Letter: Fuel provision elephant in the room for airlines

SIR – I would like to respond to an article by Zeyar Hein on March 7 on domestic airlines.

Complaints on high domestic airfares – many domestic flights are more costly than flights to Bangkok, Hanoi or Kuala Lumpur – and how it is hurting Myanmar’s tourism are gaining traction these days, with recent high-profile intervention from stakeholders in the hospitality sector.

Despite our intention to protect domestic airlines, as a member of the Association of Southeast Asian Nations (ASEAN) we should be mindful that we are already party to ASEAN’s Open Sky Policy and it is only a matter of time before we have to open our sectors (including domestic aviation) to our ASEAN brothers and sisters. In the interim, we want our domestic players to become stronger.

However, strength can come from greater competition. Attempts to protect infant industries may end up stunting their growth, keeping the industry in its infancy. Protecting market participants thus fails the country, consumers and, ultimately, the companies concerned. The cessation of operations observed in The Myanmar Times on March 11 2019 may just be market forces playing out.

Before blaming our private domestic players for the lack of innovation or competitiveness, we should also look at the business environment. For aviation, we are missing the elephant in the room – the aviation fuel and the lack of real competition in fuel provision at Yangon International Airport. This means it is cheaper to refuel outside of Myanmar.

Myanmar has the most expensive aviation fuel in the ASEAN region, according to U Hlaing Bwar, a long-time aircraft engineer. Since fuel is one of the key variable costs in providing airline services, for all the strength our domestic carriers may develop, they will not flourish if undermined by disproportionate fuel costs.

As a country striving for a fairer and better business environment, and thus a vibrant economy that can improve the living standards of our people, we should be open and courageous in the face of challenges and go beyond the surface in order to deal with the root causes.

Thuta Aung

Economist, Nay Pyi Taw

Thuta Aung is a member of the Myanmar Competition Commission. This letter is written in his personal capacity and does not represent the views or position of the Commission.

Editor’s note: The Myanmar Times published an editorial last year on how protectionist policy is hurting Myanmar’s tourism and airlines.

Source: Myanmar Times

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