Wednesday, July 26, 2017

'Lean and mean' domestic airline set for Mandalay

The domestic air market is set for a dramatic shakeup, with a new entrant planning to offer one-way fares to Mandalay for as little as K27,000 from January.

Golden Myanmar Airlines, a public company established in August, will begin flights on Friday, January 11, said Daw Kay Kalayar Aung, the airline’s public relations manager.

The five private domestic airlines charge about K80,000 for locals on the route and US$130 for foreigners but Daw Kay Kalayar Aung said Golden Myanmar could offer fares for substantially less because it used a low-cost model.

“Our airfares are very cheap because we are a low-cost carrier, not a [premium] airline. Our seat costs are low because our organisation structure is lean and mean, with no frills at all. Our management assigns us all to multiple tasks. Most of the cheap fare seats are in advance sales, the rest of our seats will be close to the average fare but we can definitely say we have no expensive seats,” she said.

Daw Kay Kalayar Aung said the K27,000 fare was not promotional and would be offered regularly.

“The other airlines have to welcome GMA because we are going to enhance the market demand. We are going to allow everybody to be able to fly. … We are not looking for a niche market. We are a people-oriented carrier.”

Golden Myanmar Airlines will fly the Yangon-Mandalay route nine times a week using an Airbus A320 with 180 economy-class seats. Passengers will be required to buy food and pay for baggage over a 10-kilogram limit.

The spokesperson from a rival domestic airline said the cheap fares had sent shockwaves through the industry, as the existing airlines all set the same prices. However, he ruled out reducing prices to compete with Golden Myanmar Airlines.

“I think the airline can’t afford to keep offering one-way fares of K27, 000 in the long-term. Fuel prices are too high for that. We won’t reduce our airfares to those levels,” he said.

Golden Myanmar Airlines was formed by 15 major investors, including U Khin Maung Aye of CB Bank and Kaung Myanmar Aung Group and U Thein Tun of Myanmar Golden Star. It sells shares to the public for K10,000 each and also has an employee share scheme.

The airline will launch in January with two Airbus A320s and plans to add a new aircraft to its fleet every six months, Daw Kay Kalayar Aung said.

“Due to the market demand we shall extend our routes not only through the Asia region but also to the Middle East, Europe, Japan, Korea, and Australia – even to the United States. We hope we can do that over the next few years.”

The head of one travel company said he welcomed the introduction of pricing competition on domestic routes and he hoped to see more low-cost airlines established in future.

“The flight takes approximately one hour and 15 minutes for Yangon to Mandalay so we can easily get by without food. Most travellers don’t mind using low-cost carriers,” U Tint Naung, managing director of travel company Golden Express.