Thai AirAsia & Bangkok Airways lead a challenging capacity surge in the Myanmar-Thailand market

The Myanmar-Thailand market is experiencing another surge of additional capacity as airlines from both countries continue introducing new flights. There will soon be about 23 daily frequencies between the two countries, up from 14 only a couple of months ago and eight from mid-2012.

So far the demand has not kept up with supply, resulting in unsustainably low load factors. The intense competition also has led to a reduction in yields.

But the market could get a reprieve as Myanmar and Thailand prepare to lift visa requirements. By the end of 2013 Thailand is expected to become one of the first visa-free countries for Myanmar. This should unleash a new wave of passenger growth although for at least the short term the market seems set to continue to suffer from over-capacity.