Myanmar Industry Overview

Aviation

Overview

The aviation market in Myanmar is the most underserved one in ASEAN and all of Asia. There are tremendous amount of opportunities and the investors will be encouraged by the related authorities recognizing the need to rapidly redevelop the sector. The authorities are aiming to make Myanmar a major aviation hub in Asia and this aim is being implemented by a four-point strategy: liberalizing economic regulations, establish new air links to international destinations, promoting national airlines and improving infrastructure. There are a number of national/domestic carriers in Myanmar and many are placing volume orders for new aircraft to pave the ways for new routes. They do so by either leasing or buying new planes and some of them mix both options. Each carrier normally has an average of 5 to more than 10 fleets. The surveys are showing that the number of weekly international flights from Yangon between 2010 and 2015 has increased 3.88 times. There are 28 international airlines now flying into Yangon and several more have confirmed new routes.

The Infrastructure

In 2014, the aviation authorities started the privatization of airports and the upgrading of major international and domestic airports in the country. In the same year, a US$150 million upgrade to Yangon International Airport was awarded to Pioneer Aerodrome Co., Ltd, a consortium led by an affiliate of Asia World Co., Ltd. Its first phase opened on 12 March 2016 and meanwhile the old Yangon international airport is being renovated to be opened as terminal 2. Mandalay International Airport, the airport of the second capital of the country has been upgrading by means of a concession agreement between DCA and MC Jalux Airport Service Co., Ltd, a Japanese company at a cost of US$100 million. Starting from 2015, a consortium comprises of Changi Airport International, JGC Corporation and Yangon Holdings Limited has been developing a new Yangon airport, the Hanthawaddy International Airport targeting for completion in 2020. The first phase was estimated to cost US$1.5 billion and it includes a terminal complex that can handle 12 million passengers per year. The second phase will have the capacity increasing to 30 million passengers per year. 

Legal & Regulatory Framework

The regulatory and supervisory body in the aviation industry is the Department of Civil Aviation Myanmar (“DCA”), which is now under the new Ministry of Transportation and Communications, a merger of The Ministry of Transport (“MoT”) and the Ministry of Communications and Information Technology. DCA also issues notifications, orders, directives and circulars regarding various aspects of the aviation industry. The significant progress of drafting and approving laws to encourage foreign investment in this industry includes the Airport Authority Law, the Rules Relating to International Interest in Mobile Equipment, and the Rules to the Law Relating to International Interests in Aircraft Equipment.

Allowed Types of Investment in Aviation Industry

Investment businesses permitted with recommendation of Ministry of Transportation and Communications are;

  1. Training civil aviation
  2. Aircraft maintenance
  3. Airport hotel business
  4. Ground service for flight
  5. Sales and marketing of air transport
  6. Ticket sale through computer network
  7. Chartering flight with/without crew
  8. Business relating to inflight food
  9. Cargo transportation by flight
  10. Small scale inspection and maintenance of aircraft
  11. Ground support in airport apron for flight landing/parking/taking off
  12. Airport services to passengers arriving and departure
  13. Ground support for passengers’ luggage
  14. Handling flight cargo
  15. Filling aircraft fuel
  16. Airport security service
  17. Building, maintenance, management and operation of airports
  18. Domestic and/or international air transportation
  19. Renting equipment related to aircraft

Aircraft Leasing

There are no specific regulatory requirements with respect to the leasing of aircraft. The most relevant law is the Myanmar Contract Act 1872. Foreign law can govern the relevant lease and related agreements and the relevant lease must be registered in Myanmar and stamp duty fees must be paid, which are subject to the value amount of the lease.

Sources

http://www.lawyerissue.com/aviation-industry-in-myanmar/

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