Government considering Myanmar National Airlines bailout

Myanmar’s government is considering granting a USD22 million dollar loan to indebted Myanmar National Airlines (UB, Yangon). This is according to U Win Khant, permanent secretary of the transport ministry, who made the remarks during a tourism forum on June 1, the Myanmar Times reported. Khant added that the airline could require state protection to remain solvent. The state-owned airline has accumulated USD24 million in debt, and is spending USD4.8 million per month on operational expenses, the Myanmar Times said. It is now asking the Ministry of Finance, Planning, and Investment for a loan. Although a loan is likely to be provided, a transport ministry spokesman told the Myanmar Times, details are still being negotiated and terms may include cost reduction measures such as the layoff of staff. Myanmar National Airlines was mostly grounded between March and April due to the coronavirus pandemic, and resumed domestic flights at the beginning of May. Local carriers are resuming scheduled domestic operations but under new health and safety rules, airlines are not allowed to carry more than 75% of their capacity, the Myanmar Times noted. Some airlines have a one-year exemption for airport use, and parking fees, but the continued ban on international air travel is expected to hurt the revenues of Myanmar’s airlines.