9 Apr, 2001
New Myanmar airline Chief Seeks Liberal ASEAN Traffic Rights Regime
Singapore: The Singaporean managing director of Myanmar Airways International (MAI) has called on ASEAN aviation regulatory authorities to start relaxing traffic rights restrictions in a way that will give the region’s smaller airlines room to grow. He also says it is about time for the smaller airlines to consider setting up their own association to defend their interests.
In a public speech and subsequent interview at the PATA Travel mart last week, Mr Prithpal Singh said the aviation cards were stacked too much in favour of established national airlines who were no longer in a position to operate the small, feeder routes that are needed to open up access to the emerging tourism destinations and secondary cities of Southeast Asia.
He said aviation regulators need to trash the outdated system of bilateral aviation agreements and allow businessmen who are willing to invest in these air-routes a chance to start flying them, accompanied by certain exclusivity rights that will allow them to get a decent return on their investment.
“Operating an airline is very expensive business. If drug companies can get a patent for their pharmaceuticals after investing so heavily in research, why shouldn’t small airlines be given those same kind of exclusive rights on air-routes, so that the big boys don’t come and take-over?” he said.
In fact, he said, the operations of the small airlines should not be subject to bilateral air services agreements at all but rather placed into a special category that would allow them to fly any number of flights to any points in the region. “These airlines are no threat to anyone,” he said. “They should be free of any encumbrance in developing their business.”
Mr Prithpal is representing a new group of Singaporean investors in MAI who this year took a 49% stake in the airline, replacing another Singaporean group who had quit about two years ago. MAI now has two 147-seat Boeing 737s wet-leased from Malaysian Airlines which are to be returned by July. Talks are under way with other parties to lease another two aircraft of around 160/170 seats.
He said Myanmar is a promising tourism destination that would become another Thailand in a few years, offering great promise for airline investors. However, because of the restricted aero-political environment in ASEAN, opportunities are few and as a result, MAI is planning to looking to Chinese and Indian cities for its future expansion.
He declined to identify which cities, but said the Myanmar-India bilateral agreement gave it the rights to fly to the four major cities of Mumbai, Chennai, New Delhi and Calcutta, while the agreement with China gave it rights to all the major cities there.
Mr Prithpal is one of the few executives in ASEAN to have been involved in running an airline, a tour operating company and a hotel group over the last few years. As a former CEO of the Singapore-based charter airline Region Air, he was instrumental in opening up access from that city-state to Samui in the mid-1990s. Most of the new investors in MAI are ex-Region Air executives.
Several Asian countries from India to Cambodia, Thailand and the Philippines have seen the emergence of new airlines in the last few years. But they operate in an environment of high costs, controlled air-fares, restricted traffic rights and stepchild treatment compared to national airlines.
He said because small airlines are not allowed into the Association of Asia-Pacific Airlines, a club of the major carriers now based in Kuala Lumpur, they may soon have no choice except to set up their own association to defend their interests and ensure that authorities give them adequate support.
Mr Prithpal said that when normal investors put money into a country, they are often given tax and other privileges but when airline investors try and launch new routes, they live under the constant threat of the ‘big boys’ coming and pushing them out of the route.
He called for hotels and others with fixed assets in emerging destinations to support the survival of these emerging airlines, and also appealed to aviation authorities to start encouraging private investment in airports. He cited the work done by Bangkok Airways owner Dr Prasert Praserthong-osoth in Samui and Sukhothai as examples of how such investments have benefited local destinations.
Mr Prithpal said proactive national tourism organisations are also a major blessing. He praised the Tourism Authority of Thailand for supporting Region Air’s original schedule of flights into Samui by investing in the marketing of the flights. “Without that money, we would not have been able to make a go of it,” he said.
He also cited the Australian state authorities for their support. Some years ago, when he wanted to start operating Boeing 767 charters to the city of Broome, the airport runway was found to be short by about 200 metres. Within a month, the authorities had it extended, paving the way for charters of 2,000 Singaporeans who shopped till they dropped.
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