Air transport development supports nation’s economic growth
Increasing foreign investment in Mongolia and exports of domestic products to overseas, especially livestock products such as meat, cashmere, wool and leather, will be of great importance to enhancing the country’s economic growth.
As Mongolia is a landlocked country, sharing borders with only two countries, all Mongolian products being exported to overseas are cheap, and air transport and transit transport passing through the territories of these two neighboring countries and other countries are the only two opportunities for the country to export its products to foreign markets.
The government of Mongolia claimed that tourism industry is one of the main sectors that will help boost the nation’s economic development, but many officials and representatives from tourist companies criticized that as ticket prices of airlines flying to Mongolia are very high, tourism development is murky.
Many say that a lack of fair competition in the air transport sector affects its development, and some say that despite its operation with deficit and reckless management, state owned MIAT Mongolian national airline is still blocking fair competition to keep a monopoly, but on the other hand, some politicians and officials working at MIAT believe that the government of Mongolia should support MIAT to protect its national airline.
...Many say that a lack of fair competition
in the air transport sector affects its development, and some say that despite its operation with deficit and reckless management, MIAT is still blocking fair competition to keep a monopoly...
In recent days, Minister of Roads and Transportation J.Bat-Erdene started talking about air transport liberalization. Most experts and officials specializing in aviation agree that a part of MIAT should be privatized, but they do not have a similar stance on when it should be done.
People want to know about measures that should be taken to increase the number of tourists heading to Mongolia from abroad and by how much ticket price would be lowered under the government’s efforts for dealing with challenges regarding air transport to develop the Mongolian tourism industry.
Within the first days into office late last year, Minister J.Bat-Erdene tasked the ministry’s officials and MIAT’s heads to study opportunities to decrease ticket prices of MIAT, but he could not succeed in this task. Turkish Airlines has vowed that they will reduce its ticket price by 30 percent if the government of Mongolia approves larger aircrafts between Istanbul and Ulaanbaatar, but the government has not responded to their proposals yet.
Since July, 2012, Turkish Airlines started flying its narrow-body aircraft between Istanbul and Ulaanbaatar by stopping at Bishkek, the capital of Kyrgyzstan, for two hours.
Turkish delegates visiting Mongolia noted that as the government gave Turkish Airlines a permission to carry its passengers under a limit of 500 seats per week, flights with limited seats are not promoting Turkish trade, economic and investment cooperation with Mongolia. Turkey put forward a proposal to replace its small aircraft with a widebody craft to the government, and they believe that if this proposal is approved by the government, a number of new opportunities will be offered to Mongolia.
If the government accepts the Turkish proposal, a larger craft will fly between the two cities without stopping in Bishkek. As the smaller aircraft is unable to fly non-stop between Ulaanbaatar and Istanbul due to its size of fuel tank, it must land in Bishkek for two hours to refill and Mongolian passengers spend a lot of money on purchasing duty free products like alcoholic beverages at Bishkek’s Manas airport while they are waiting for their flight.
According to a study conducted by Turkish Airlines experts about opportunities that will benefit the Mongolian economy after flying a larger aircraft, a direct investment of nearly 55 million USD will be expected to be generated to Mongolia from many different services such as landing, parking, ground handing, fueling, catering and flight crew accommodation.
As larger aircraft will cut flight time by four hours, flight time will be approximately seven hours and 40 minutes.
If daily a direct flight between Mongolia and Turkey is launched, money spent by Turkish Airlines and Mongolian passengers in Bishkek will come to Mongolia, 15-20 tons of cargo can be loaded. As cargo is available to passengers, direct cooperation between the entrepreneurs of the two countries will start. Mongolia could be a hot destination for foreign tourists because Turkish Airlines’ 334 aircrafts fly to 304 destinations of 121 countries.
According to some reports on tourism development, increasing the number of foreign tourists heading to a country increases domestic flight passengers, and therefore, domestic airlines such as Aero Mongolia and Hunnu Air should cooperate with Turkish Airlines by providing technical training, consulting and assisting with security operations, carrying out a smart marketing policy for promoting Mongolia abroad to attract foreign tourists, and provide Turkish Airlines’ passengers traveling to Mongolia with a safe, comfortable and affordable rates for domestic flights.
During a conference to promote exports of livestock and agricultural products held last year, representatives of Mongolia’s largest meat producers stressed that they are looking forward to exporting their meat to Turkey, Iran and some Persian Gulf countries if a cargo aircraft is available from Mongolia to the Middle East.
The government should worry about the future of MIAT and Mongolian air transport but we need to carry out a correct survey about what the Mongolian air transport sector will like after approving Turkey’s proposal.
As air transport is like “air tax” for a country without a sea route like Mongolia, developing this sector by tying it up with development policies of tourism and other economic sectors is a top priority for Mongolia.