Emi­rates faces chal­lenges to Myan­mar col­lab­o­ra­tion

The Myanmar Times - - Front Page - STEVE GIL­MORE s.gil­more@mm­times.com

The gulf car­rier wants to work with lo­cal air­lines and travel agents when it starts Myan­mar op­er­a­tions in Au­gust but faces reg­u­la­tory and tech­ni­cal hur­dles.

EMI­RATES air­lines is ea­ger to work with lo­cal car­ri­ers and travel agents when it starts Myan­mar op­er­a­tions in Au­gust. There are reg­u­la­tory and tech­ni­cal hur­dles to com­mer­cial co­op­er­a­tion, but also signs some bar­ri­ers will be bro­ken down.

The gulf car­rier is sched­uled to land in Myan­mar for the first time on Au­gust 3, and will fly daily from Dubai to Yan­gon and on­ward to Hanoi.

The air­line joins com­peti­tor Qatar Air­ways in ser­vic­ing Myan­mar from the Mid­dle East, and is part of a pro­fu­sion of in­ter­na­tional air­lines ex­pand­ing their Myan­mar op­er­a­tions.

Emi­rates is keen to col­lab­o­rate with lo­cal air­lines and agents, but there are chal­lenges to over­come, said Mo­ham­mad Sarhan, coun­try man­ager for Thai­land and Myan­mar.

Th­ese stem mainly from Myan­mar’s iso­la­tion from global travel sys­tems and or­gan­i­sa­tions.

One ex­am­ple is the world­wide pay­ment sys­tem for travel and sales agents pro­vided by the In­ter­na­tional Air Trans­port As­so­ci­a­tion (IATA).

The sys­tem – known as a Billing and Set­tle­ment Plan (BSP) – means that air­lines do not have to deal with in­di­vid­ual travel agents, and re­ceive all pay­ments from agents in one elec­tronic set­tle­ment.

But Myan­mar is not us­ing a BSP yet, said Mr Sarhan, adding that this also re­quires di­rect con­nec­tion be­tween a lo­cal travel agent and Emi­rates.

Op­er­at­ing out­side of a BSP means a travel agent has to pro­vide a guar­an­tee of pay­ment to an air­line, whereas within the BSP it is the IATA that cov­ers the risk of non-pay­ment, he added.

Al­bert Tjo­eng, a com­mu­ni­ca­tions di­rec­tor for the IATA in Sin­ga­pore, said the IATA is con­duct­ing a fea­si­bil­ity study on set­ting up a BSP in Myan­mar.

The re­li­a­bil­ity of the bank­ing in­fra­struc­ture, and sup­port from lo­cal air­lines and travel agents will be cru­cial, he said.

Emi­rates is also ea­ger to col­lab­o­rate with lo­cal air­lines and form agree­ments that would al­low pas­sen­gers to fly with Emi­rates from Dubai to Yan­gon and then on­ward to in­ter­nal Myan­mar des­ti­na­tions with a lo­cal car­rier, Mr Sarhan said.

The use of a BSP would help smooth such col­lab­o­ra­tion but there are other po­ten­tial prob­lems.

One is­sue is that Emi­rates re­quires its lo­cal air­line part­ners to pass the IATA Op­er­a­tional Safety Au­dit.

The only Myan­mar air­line to be IATA-cer­ti­fied is Myan­mar Air­ways In­ter­na­tional, which does not op­er­ate in­ter­nal Myan­mar routes.

On the com­mer­cial side, an­other prob­lem is that few lo­cal Myan­mar car­ri­ers use a global dis­tri­bu­tion sys­tem (GDS) – a com­puter net­work link­ing air­lines to travel agen­cies.

A travel agent in Europe or the Mid­dle East could only book a cus­tomer a flight from Dubai to Yan­gon with Emi­rates and Yan­gon to a smaller in­ter­nal air­port such as Ba­gan with a lo­cal car­rier if both the air­lines pro­vid­ing the flights are on a GDS.

“Sys­tem in­te­gra­tion is the most im­por­tant thing,” said Mr Sarhan.

“We need those lo­cal air­lines to be avail­able on a GDS. Usu­ally, this is the first ob­sta­cle [to col­lab­o­ra­tion].”

Most do­mes­tic air­lines in­stead use cheaper Web-based sys­tems, said U Zaw Min Aung, chief op­er­at­ing of­fi­cer at lo­cal car­rier Air Man­dalay. In ad­di­tion to Web-based sys­tems be­ing cheaper and eas­ier for staff to use, slow in­ter­net con­nec­tions in Myan­mar would make mov­ing to a GDS chal­leng­ing, he said.

An­other IATA ser­vice is its cen­tral clear­ing house, which col­lab­o­rat­ing air­lines use to set­tle ac­counts.

The clear­ing house pro­cessed US$54 bil­lion in trans­ac­tions in 2015, ac­cord­ing to the IATA, and in­ter­line co­op­er­a­tion is made eas­ier if lo­cal air­lines join the clear­ing house, Mr Sarhan said.

The only Myan­mar car­ri­ers that are ac­tive mem­bers of the clear­ing house are the two in­ter­na­tional air­lines – Myan­mar Na­tional Air­lines and MAI.

An­other op­tion for lo­cal col­lab­o­ra­tion is for visa pro­cess­ing. Emi­rates would like to find a third-party firm with which it can con­nect UAE na­tion­als that need a Myan­mar visa, Mr Sarhan said.

The air­line al­ready con­nects UAE na­tion­als fly­ing to other coun­tries with third-party com­pa­nies that can help with visa ap­pli­ca­tions, he added.

The eas­i­est way to fly to Yan­gon from Dubai with Emi­rates in the past was to fly di­rect to Bangkok, where UAE na­tion­als are able to se­cure a Myan­mar visa within a day, and take a con­nect­ing flight to Yan­gon.

But there is no Myan­mar em­bassy in the UAE, mean­ing po­ten­tial trav­ellers fly­ing di­rect to Yan­gon will likely use the Myan­mar em­bassies in Saudi Ara­bia or Qatar, Mr Sarhan said.

‘We need those lo­cal air­lines to be avail­able on a GDS. Usu­ally this is the first ob­sta­cle [to col­lab­o­ra­tion].’

Mo­ham­mad Sarhan Emi­rates

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