Myanmar's government is using aviation as a key policy tool in its drive to develop regional ties. The country should witness the birth of its fifth airline next year under a joint venture with Indonesia but the deal has sparked speculation that the days of the current flag carrier, Myanmar Airways, are numbered.

Indonesia's president Suharto signed the deal during a state visit to Yangon in February. Details are scarce but state-owned aircraft manufacturer IPTN will be Jakarta's representative in the joint venture and supply the carrier with aircraft. Garuda and Merpati will second managers but the state of Myanmar will hold the controlling 51 per cent stake.

This is in keeping with other joint venture carriers Myanmar has set up. The country may not be popular among Western governments, but within Asia-Pacific it is strengthening its position, bolstered by such joint venture deals. Two of the country's other carriers, Air Mandalay and Yangon Airways, involve Malaysian and Thai investors respectively.

But the multiple airline interests of the state have fostered a bizarre competition policy. Lieutenant-Colonel Aung Nyunt, managing director of Myanmar Airways, explains the government line: 'We're the majority partners in competing airlines, but this is commercially viable. We told our partners to compete in good ways, not to be cut-throat,' he says.

But analysts speculate Myanmar Airways, which operates an ageing fleet of mainly F27s with one B757 and B737, could get its throat cut. Sources suggest the proposed Indonesian startup could merge with the other joint venture airlines to form a new flag carrier with a fresh image.


Source: Airline Business