Burma - Country Commercial Guide
Aviation

This is a best prospect industry sector for this country. Includes a market overview and trade data.

Last published date: 2021-09-27

Overview

The Burmese aviation sector is managed by the Department of Civil Aviation (DCA), which is part of the Ministry of Transport and Communications (MOTC) in civil aviation administration and air navigation services.  MOTC has engaged in 48 agreements to increase international flights, as well as to establish separate framework agreements between Burma and Cambodia, Laos, Vietnam, Bhutan, and the Netherlands.  DCA is trying to strengthen the aviation sector through its new strategic plan, which includes calling for improved infrastructure, promoting the airline business, and securing air service agreements with international partners.

Up to early 2020, with ongoing economic reforms and the growth of its middle class, the Burmese aviation sector was emerging as an attractive area for business opportunities.  According to the Myanmar Department of Civil Aviation (DCA), the number of international air passengers to and from Burma jumped from 1 million in 2010 to 6.65 million in 2016.  The number of domestic air passengers increased roughly four times from 1.2 million to 4.6 million from 2010 to 2015.  The air cargo sub-sector remains underdeveloped, even though it is a much-needed solution in the country’s remote areas. 

However, the aviation sector had its slowest growth rate in 2018 due to a decline in tourism, resulting in only a 2 percent growth in international passengers and a contraction of 5 percent in domestic traffic in 2018.  COVID-19 hit Burma in mid-2020, followed by the February 1 coup, crippled the recovery of the aviation sector. 

Burma has three international airports and 30 domestic airports (as well as 36 inactive airfields), serving 28 foreign air operators and nine domestics.  Among the nine domestic operators, Myanmar National Airlines (MNA), Burma’s national flag carrier, operates both domestic and international routes. Burma’s only other international airline is Myanmar Airways International (MAI).  Burma’s three international airports are Yangon International Airport (YIA), managed by the Yangon Aerodrome Company; Naypyidaw International Airport, managed by the Pioneer Aerodrome Services Company; and Mandalay International Airport managed by the Mitsubishi Group and JALUX, an affiliate of Japan Airlines.

Among the three international airports, YIA, which was expanded in 2017 with a new international terminal, now serves as the largest and busiest for both passengers and cargo, with steady growth in visitor traffic over the last few years.  YIA is strategically located between India and China, two countries with two-thirds of the world’s population.  YIA is also within six hours flying range of other international hubs such as Tokyo, Dubai, Singapore, Bangkok, and Kuala Lumpur.  The airport was designed to serve 2.7 million passengers per year but is currently overcapacity.  As a result, plans for a new airport, Hanthawaddy International Airport (HIA), have been established to meet demand and fill the service gap.

New Hanthawaddy International Airport

Located in Bago, 80 kilometers northeast of Yangon, HIA will become the second largest airport in Burma upon completion, offering an initial capacity of 12 million passengers annually, with a 3,600-meter runway capable of handling aircraft such as the Airbus A340 and the Boeing 777.  HIA is expected to have the capacity to serve 30 million passengers by 2048.  HIA will also include taxiways, aircraft stands, baggage handling, and other support systems.  Yongnam Holdings, Changi Airport Planners and Engineers (CAPE), and JGC Corporation submitted proposals to DCA in 2012 and 2014 for a contract to design, construct, operate and maintain the airport under a 30-year concession period.  All failed to proceed.  This project has been expected to attract new airlines to Burma’s aviation market and encourage existing local airlines to add new routes.  The $1.5 billion project is under its fifth cycle to restart, with the Japan International Cooperation Agency (JICA) estimating the project to cost $2 billion.  With guidance from MOTC, a master plan is underway, with a targeted completion of phase one in 2027.  

Given the potential of the tourism sector, the government planned to upgrade Thandwe, Nyaung U, Kawthaung, and Heho airports, allowing them to accommodate international flights.  In order to implement all the planned airport infrastructure projects, DCA has been working to strengthen its policies and drafting the Myanmar Airport Authority Law, which will regulate airport services, ensure local carriers adhere to better safety and quality standards, and enable the privatization of airports.  However, these plans have been impacted by the COVID-19 pandemic and the February 1 coup, and the subsequent restrictions and deterioration in the Burmese economy.

Legal Framework

The Myanmar Aircraft Act 1934 (XXII of 1934), the Myanmar Carriage by Air Act 1934 (XX of 1934), the Myanmar Aircraft Rules 1937, the Myanmar Aircraft Rules 1920 (Part IX), and the Myanmar Aircraft Public Health Rules (1946) govern the aviation sector, having been promulgated before Burma gained independence on January 4, 1948.

According to the Myanmar Adaptation Laws Order 1948, the Myanmar Aviation Acts and Rules are accepted in operation throughout the Republic of the Union of Myanmar relating to the control of the manufacture, possession, use, operation, sales, import, and export of aircraft applying to citizens of the Union wherever they may be, and persons on aircraft registered in the Union, wherever they may be.  The Myanmar Aircraft Act and Rules were last amended on August 25, 2004.

Importation and AOC process in Burma

Regarding importation of aircraft (including helicopters) into Burma, DCA accepts aircraft Type Certification from EASA (European Standard), or FAA (US Standard) approved designs only.  Further details can be found in MCAR Part 21, Airworthiness Notices A/9 and A/10.

Regarding the Air Operator Certificate (AOC) process, Burma, being an ICAO member, requires an AOC in order to operate in Burmese airspace.  The AOC process is handled by the Flight Standards Department of DCA (for further details, see MCAR Part 1 in the link below).  DCA prescribes Aviation Rules and Regulations according to ICAO Standards and Recommended Practices.  All potential owners/operators of aircraft must follow these Aviation Rules and Regulations in order to operate in Burma. 

Opportunities and Challenges

Currently commercial flights are operating with some restrictions.  The aviation market in Burma is competitive, especially among local airlines since the ASEAN Open Skies Policy provides rights to regional airlines to fly directly from their home countries to Nay Pyi Taw and Mandalay.  At the same time, nine local private airlines own a small number of aircraft and follow the same blueprint of scheduling, fares, and pricing conditions which hinders them from achieving economies of scale.  Recently, the government sought to expand and rebrand MNA to become more competitive internationally.  The domestic airline industry is facing heavy competition from foreign carriers in the market.  Thailand occupies the largest foreign share of the Burmese aviation market, followed by Singapore.  The top Thai airlines in the market are Bangkok Airways, Thai Air Asia, Thai Airways International, and Nok Air.  These carriers have secured significant market shares by connections from their hubs in Thailand, comparable fare prices, and brand recognition.  Next in market share are airlines based in Singapore including Silk Air, Singapore Airlines, and Tiger Air.

As part of the National Transportation Master Plan, the government is planning to allocate $8.5 billion for sea and airport projects out of a total of $21.4 billion for road, rail, ports, and aviation projects by the year 2030. It is critical for the government to prioritize meeting air passenger demand and reduce transportation time and costs.  To this end, Burma will pursue Public-Private Partnerships (PPP), creating trade and investment opportunities for foreign and private investors.

Upgrading 30 operational domestic airports and rehabilitating 36 inactive airports is a key priority for the government.  At least 22 aviation-related tenders are planned for upgrading Dawei, Heho, Kawt Thaung, Keng Tung, Kyauk Phyu, Loikaw, Lashio, Mawlamyine, Nyaung U, and Thandwe airports.  U.S. aviation companies can find opportunities in the Burmese aviation market for technological solutions, aviation training, safety, regulatory and security consultancy, aircraft maintenance services, and spare parts supply.

The air freight sub-sector in Burma is underdeveloped and underutilized and has been identified by aviation companies as a significant opportunity for foreign entities.  U.S. aviation companies could supply technologies, consultancy services, and infrastructure development, including cargo handling facilities in the air freight sector.

While local companies have a high preference for U.S. brands, products, and services, complicated financial regulations and due diligence checks from both sides stay as the main hurdle to deal with U.S. companies, not only in the aviation sector but in other industries as well.  Finding a trustworthy and efficient local partner is most needed for U.S. companies.  It is recommended that U.S. firms consult with the Commercial Service for detailed opportunities.

Resources

Department of Civil Aviation Myanmar

Ministry of Transportation and Communications

Contact Information

U.S. Commercial Service

Dr. Khine Wah Lwin

Senior Commercial Specialist

Email: KhineWah.Lwin@trade.gov