Air transport

Air transportation industry is a facilitator of economic growth, as well as an investment through tourism and a development factor for international trade. It occupies a central position among other industries at this time of globalization.

For a landlocked country like Mongolia, this industry, to a certain degree, is a guarantee of financial independence and protection of individual freedom. The angle from which our society approaches this industry determines Mongolia’s economic efficiency. Instead of seeing it as an important part of development and a great opportunity for creating economic competitiveness, at the present, we see it only as a tool for making a small group of individuals wealthy.

A Means for Development

Mongolia is situated on the shortest air connecting route between Asia and Europe, whose economic interrelations are growing faster than ever. We are also on the shortest route (over the North pole) of the vertical air connection between North American market with the highest purchasing power and South East Asia, its major supplier of almost all goods.

At the moment, air transportation industry is growing intensively due to increasing safety standards of flights and capacity of aircraft loads. Mongolia, as a large air traffic navigator has a great potential for self development into a major hub for international air transportation.

The United Arab Emirate, for example, saw the exact same opportunity and took advantage of it. Only a few years ago many flew over Dubai as it was just another city in the middle of sand. Today, they have transformed it into a center where millions of passengers land for connecting flights, shop in its large duty free malls and relax in the hotels inside the international airport. Just recently, they completed a construction of an inside ski resort and spa complexes in an environment where the outside temperature reaches over 50 degrees Celsius. Nothing is impossible.

As we know, Mongolia in the summer attracts tourists of most any country. In winter, we have many great mountains of the north covered in natural snow. Skiing in soft, real snow, not watery and artificial one is a dream for millions of people living south of us.

We have enough land to be the largest air cargo hub of the world. After all, Mongolia is the 17^th largest country in the world. More than that, the majority of it is a flat steppe. If we wanted, we could get all aircrafts of the world to land and line them up in a row. The huge Siberian resources and Northern Chinese people are on our two sides, waiting for integration to the world economy. Thus, a great opportunity awaits us.

A tool of plundering

Quite recently we thought only of MIAT when we talked about air transportation. Since the revolution in 1990, there were some moves towards economic liberalization in this sector that divided the “Buyant Ukhaa kingdom” into two: MIAT, the national airline company and the Civic Aviation Authority. But the privatization of MIAT and further separation of airports from Civic Aviation authority has not been accomplished not to mention the creation of alternative choices for fuel supply and catering services. Every political party promises to complete these steps before every election, but they never do it after gaining power. The main reason why this promise is not delivered is because politicians quickly realize that these two organizations are great cashier machines with endless and hard to control sources.

From time to time, the related authorities of governance conduct inspections in operations of these two organizations and make a big noise in media. The real purpose of these inspections was never in favor of increasing productivity, but actually in finding out the wrong doers and incumbent decisions makers for replacing them with their own people. This starts with sending their own people to positions abroad and ends with gaining control over the few global businesses of the industry that supply fuel and catering to all the airlines stopping over in Mongolia. It is a bloodless front for political wars.

Almost all individuals working in these organizations come and go with the political waves and the main challenge for them is to survive, then to adapt to the next tide.

In short, Buyant Ukhaa is a kingdom without a king. Light is on, but nobody is at home. MIAT’s top management changes almost every year. They fly anyway they like and stop any flight anytime if they do not like it. They recently announced that they will fly to London, and the day before they threatened to stop the flight to Berlin. They believe that the customers are not kings, but slaves. They lease only 2 aircrafts but have 800 employees. How can they compete when they do not know what to do? That is the reason why MIAT is at a loss, and all foreign airlines flying to Ulaanbaatar make money. MIAT needs not more fleet, but more heart to do the job.

Unpredictable MIAT is a stumbling block for tour operators instead of being the leading player in the development of tourism sector. They think of domestic flights as non profitable, select the best routes only for the high season and then forget it. They land in local airports aircrafts heavier than the designated weight and turn the runaway strip dysfunctional. One would assume that passenger safety is a first priority.

All these irregularities must be coordinated by the Civic Aviation authority, who is always busy with coordinating its income from the overflying aircrafts navigation fee instead. They never report publicly what is done with that revenue, 20-30 times profitable than MIAT. A part of that income must be spent for the air transportation development of the country, not for the development of their own organization only. They never treat private and public airlines equally. Though they keep talking about the new international airport with Japanese loan, but keep quiet in announcing to the public the other related infrastructure what private sector is waiting for to participate.

The point of Take-off

If we consider for a moment the Mongolian air transport industry as an aircraft, it would be a giant aircraft with a very small engine. This aircraft, full of people is not certain when to speed up on its runway and to take off. Actually this kingdom has all that is required to cease the opportunity it has. Yet, they have not accomplished any major project with full knowledge and financial resources.

Privatization of MIAT would produce a concrete owner who would really care for the property and cost. A private company never passes a supply to itself “under the table”, or makes any unnecessary cost.

The Aviation authority should not be engaged in daily operations of airports and other services that private companies can do. Instead it must be engaged in making the Mongolian air transport more global.

For this “Kingdom”, it is time to think big. We cannot go far by thinking of few individuals with their narrow interests. The motto really should be ‘the world is large, the work is enormous”. This “Kingdom” needs a long and large vision to reach this take-off point. Let us hope this take-off time will come soon.