Thai AirAsia Abandons Nay Pyi Taw

6th Jan 2014

Thai AirAsia ceased its operations in Nay Pyi Taw, the new capital of Myanmar, on December 26, 2013 due to less than expected demand.

Dropping Nay Pyi Taw from its network will leave Thai AirAsia with only two direct routes to the country via Yangon and Mandalay.

Though the airline was already casting doubt the sustainability of the route even before it was launched, it went ahead as planned to test the water. The airline decided to abandon the route this early after they found it to be unsustainable in the long term.

Thai AirAsia, the local subsidiary of Malaysia's AirAsia Bhd, deployed the narrow-body A320 aircraft for the route during its run and it was filled to capacity during the country's hosting of the 27th SEA Games, the largest sporting event in the region which was held for the first time in Myanmar.

After the event, the plane was reportedly carrying as few as 10 passengers on some of its flights.

The majority of the passengers flying with Thai AirAsia prior and during the event were mostly athletes and supporters of Thai national team as well as journalists covering the biennial event.

The airline source was quoted as saying that the month-long operations was supposed to be a trial run for the budget carrier to spur travel demand between the two destinations. However, after the sports event concluded on December 22, the airlines received no further bookings for the rest of the year and onwards, prompting them to cancel the service.

Nay Pyi Taw, according to the source, is not yet a ripe market for leisure travel as it offers nothing more than a sole but grand pagoda and a world-class zoo. Low-cost carriers, like Thai AirAsia, mainly cater to leisure travelers who want to see places of interest or tourists attractions.

Myanmar's main market are the business travelers, for the moment, as they are building their economy after decades of isolation. Budget travel, therefore, is not yet viable for low-cost airlines to operate in the country.

Thai AirAsia's departure from Nay Pyi Taw will leave the Myanmar capital with a single route to Bangkok, the capital of Thailand, served by full-service carrier, Bangkok Airways, where it operates five flights per week using turboprops.

During Myanmar's hosting of the SEA Games, Bangkok Airways used a larger aircraft, an Airbus A319, to accommodate the temporary influx of travelers from Bangkok to Nay Pyi Taw to see the games, making four flights each week.

As it abandoned Nay Pyi Taw, the airline is increasing its frequency between Bangkok and Yangon, the old capital, where demand is much larger and sustainable.

It is also serving Mandalay, in central Myanmar, from Bangkok with once-daily service.

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