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NEWS Last modified on November 18, 2014

Japanese firms win concession to operate Mandalay

Jalux, Mitsubishi Corporation (MC), and Myanmar’s SPA affiliated group-company Yoma Development Group Limited, have signed a concession agreement with Myanmar’s Department of Civil Aviation (DCA) to operate Mandalay International Airport for 30 years.

Operations are scheduled to commence around March 2015, based on the concession agreement concluded with DCA, a statement on the MC website explains.

The three companies have established a special purpose company, MC-Jalux Airport Services (MJAS) in Myanmar, which sees Jalux and MC each holding 45.5% of the shares, with YOMA holding the remaining 9%.

MJAS will undertake the operation, rehabilitation and maintenance of airport facilities, including terminal buildings and runway (excluding air traffic control).

The project also makes history as the first in which Japanese companies are involved in 100% private equity airport operations abroad.

Jalux has over 50 years of experience operating airport retail businesses (27 airport facilities) as well as in the management, maintenance of airport facilities in Japan.

The firm’s experience also includes the operation of international airport terminals abroad through Wattay International Airport in Vientiane, Laos, which it has been operating jointly with a government corporation since 1999.

MC says it will apply the wealth of experience gained in the construction and operation of airport facilities and other types of infrastructure development to operate Mandalay, while Yoma will provide the project with real estate development expertise and established local expertise being a leading Myanmar corporation.

Air travel is one of the fastest methods of transportation in Myanmar, and Mandalay is a major hub, connecting 11 domestic and four international destinations.

Since 2010, domestic passenger traffic through Mandalay, the second busiest in the county, has been increasing by 20% per annum, reaching a 60% annual growth in international flights, and has capacity for 3 million passengers a year, but only handled around 750,000 in 2013, 190,000 domestic and 560,000 international.

A statement from MC says: “The aim of the new venture is therefore to generate further expansion of domestic and international flights to Mandalay, and consequently the increase of passenger traffic at the airport.

“Jalux and MC will aim to contribute to the development of Myanmar’s economy through the operation of Mandalay, while at the same time expanding the airport development business, ranging from investment to construction and operation, in response to growing demand for enhanced airport infrastructure, particularly in emerging countries in Asia.”

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