AirAsia mulls Myanmar joint venture

BANGKOK, March 21 2018: After AirAsia’s founder and CEO Tony Fernandes told Reuters, Monday, that he is talking with a potential partner to open an airline in Myanmar, the guessing game began.

Reuters said the move to establish an airline in Myanmar would fill a gap in the airline group’s Southeast Asia network.  The other gap is Vietnam where Fernandes said an airline could be flying as early as October.

AirAsia has operational airlines in Malaysia, India, Indonesia, the Philippines, Japan and Thailand.

But Myanmar perked everyone’s interest and Fernandes may have let the cat out of the bag through some of his oblique remarks to Reuters.

“It’s not going to be a big airline there, because the airport infrastructure is not there. But it is 50 million people and it will develop over time,” said Fernandes, who was in Sydney last week for the meeting of the 10-member Association of Southeast Asian Nations (ASEAN).

He added: “We had a good meeting with someone in Sydney – he’s got a good airline that we’ve known for a long time and he is a well-respected guy. We’re going through that process.”

He didn’t mention the potential partner but that didn’t stop social media netizens from throwing in their valuable insights on who the partner might be.

In minutes of Reuters’ story Myanmar watcher and travel consultant, Jaffee Yee, who heads Knowledge Media that recently released a Best of Myanmar coffee-table book, posted on his Facebook page that he was “quite sure” the potential partner was FMI Air claiming its owner, Serge Pun, founded the one airline in Myanmar that has an international outlook on business, is well-respected and politically beyond reproach.

FMI Air is backed and owned by First Myanmar Investment owned by Pun. FMI has been listed on the Yangon Stock Exchange since 2016. At a glance, it’s ticks for the all boxes  on the suitability of an airline partnership with AirAsia.  It recently concluded a partnership with  Grab and is involved in banking, mobile payments (mobile wallet) plus a tourism related company on the stock exchange in Singapore.

The airline was founded in 2012 by Serge Pun and  branded FMI Air. It has four ATR72 aircraft and flies domestic services from its base in Yangon.

Illustrating its intention to become a regional player in tourism and hospitality, the parent company, First Myanmar Investment, (FMI) together with its affiliated company, Yoma Strategic Holdings Ltd and Exemplary Ventures Ltd, transferred their equity interest, last December in MM Myanmar, a tourism assets owned business, to the Singapore Exchange listed SHC Capital Asia Ltd.

According to the press release 1 December 2017, following the stock transfer and purchase, FMI owned 13.6% of equity interest in SHC.

This resulted in SHC being named Memories Group Limited that precluded a new listing 5 January 2018 upon completion of public float compliance.

Memories Group’s initial assets consist of Balloons Over Bagan and Balloons Over Inle, Pun Hlaing Lodge, Hpa An Lodge, Asia Holidays, which is a tourism and destination management company and a new proposed commercial and tourism related hospitality development.

A new management team, headed by FMI’s chairman U Theim Wai (Serge Pun), chief executive officer, Michel Novatin, and chief operating officer  Jean Michel Romon, are now heading the management of  Memories Group.

U Theim Wai AKA Serge Pun said at the time: “This is a truly groundbreaking moment. We believe it’s unprecedented that a Myanmar company is holding stakes and investing in an overseas listed entity and we envision this move will help bring long-term capital into the country that will stay and help build Myanmar’s tourism industry and the economy.”

Looking at all the potential airline partners, AirAsia Group could talk to over the next few months, FMI appears to be the most likely choice.

AirAsia has been moving rapidly to launch additional services for its 80 million-plus customers, from financial offerings, including foreign exchange, to e-commerce and content.

“The biggest asset is our data,” Fernandes said. “While southeast Asian companies like (Indonesian ride-hailing company) Grab have to go out and spend a fortune to build that brand and data, we have 89 million customers travelling with us every year and we have data going back 18 years.”

Japan’s ANA Holdings Inc last year dropped a plan to form an airline with local partner Golden Sky World, after authorities rejected their application.

(Source: Reuters plus TTR Weekly)