Buoyed by years of surging visitor arrivals, Myanmar’s aviation sector is set for robust long-term expansion, as the Department of Civil Aviation moves forward on a number of projects aimed at boosting capacity. Chief among these is the construction of two new terminals at the country’s primary aviation hub, Yangon International Airport (YIA), one of which came on-line in early 2016. The planned Hanthawaddy International Airport (HIA) in Bago, meanwhile, will significantly augment Myanmar’s existing passenger capacity, with 2016 witnessing solid progress towards ground-breaking at the greenfield facility. However, some concerns remain about the feasibility of building a new airport outside of Yangon when YIA is already expanding rapidly, and excess capacity remains a key concern for future projects.
Recent Growth
Myanmar’s aviation sector has expanded rapidly in recent years, with the DCA reporting that international passenger volumes more than tripled between 2010 and 2015, rising from 1m passengers annually to more than 3.4m in 2015, while the number of domestic passengers rose from 1.2m to 4.6m. The number of foreign airlines operating in the country rose from 13 to 28 over the same period, with surging passenger volumes straining facilities at YIA, which was originally designed to handle up to 2.7m passengers annually.
Yia Upgrades
In an effort to manage rising passenger volumes, authorities announced plans to expand YIA’s existing terminal in June 2011, and in 2013 unveiled an Airport Master Plan outlining plans to significantly expand passenger capacity through the construction of three new terminals and related facilities. The YIA development plan will be rolled out in three phases, the first of which includes construction of two new terminals for international and domestic passengers. The second phase will expand facilities at the new international terminal, and includes construction of a VIP terminal, while the final phase includes further expansion of the new international terminal, as well as construction of a new multi-storey car park, and an airport city offering hospitality, commercial and retail facilities.
Construction of the new international terminal began in April 2014, and in March 2016 Asia World Company subsidiary Yangon Aerodrome Company, which built and manages YIA, announced that the new terminal had opened ahead of schedule, more than doubling the airport’s existing capacity to 6m. A second terminal, which will replace the existing domestic terminal, is under construction, with the airport expected to offer capacity for up to 20m passengers annually once construction finishes.
Signing The Hia Deal
The DCA is also moving forward on HIA in Bago, 80 km north-east of Yangon. Located on a 3642-ha site, the new airport will the second largest in Myanmar on completion, offering an initial capacity of 12m passengers annually.
In January 2016 a consortium of three companies – JGC Corporation, Yongnam Holdings and Changi Airports International – signed a framework agreement with the DCA for the HIA project, marking an important step towards a concession agreement, after the consortium successfully bid on the design, construction and management under a public-private partnership arrangement in October 2014. In September 2016 authorities announced that they expected the concession for the $1.5bn project would be signed in December 2016.
Capacity Issues
Both HIA and the YIA expansion could face challenges, however, owing to the fact that HIA is located more than an hour’s drive from downtown Yangon, and given that YIA’s ongoing expansion, if completed as planned, will more than triple its already augmented capacity. Similar challenges exist at Mandalay International Airport, which opened in 2000 and offers capacity for up to 3m passengers, but handled only 987,000 in 2015.
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