Airlines & more

Foreign airlines carving up market for themselves

Local carriers fail to capture increasing number of flyers
Air travel tax

Even though Hazrat Shahjalal International Airport now deals with twice the number of passengers it used to 10 years ago, local carriers have been losing market share.  

The 32 foreign airlines serving Dhaka on the other hand have been carving up the market for themselves.    

The number of passengers using the Dhaka airport in 2014 was around 60 lakh while in 2023 it increased to around 1.20 crore, according to documents of Civil Aviation Authority of Bangladesh (CAAB) placed before Monday's meeting of the Parliamentary Standing Committee on the Civil Aviation Ministry.

"But Biman failed to capture the market due to the absence of proper planning, marketing, and expansion of its fleet and network."

— Kazi Wahidul Alam, editor of The Bangladesh Monitor

In 2014, the airport had 95,191 flights and in 2023, it had over 1.88 lakh, according to CAAB statistics.

Aviation expert ATM Nazrul Islam said it is good that the Dhaka airport terminals have the surplus capacity to deal with the increasing number of passengers, but the sad story is that Biman's market share of 32 to 34 percent in 1990 has come down to 22 to 24 percent.

Local carriers Biman, US-Bangla, and Novoair operate international flights. Of them, the national flag carrier with its fleet of 21 aircraft flies to 23 international destinations, while US-Bangla with its fleet of 24 aircraft operates flights to 12 destinations. Novoair flies to one regional destination, according to the officials of the carriers.

Nazrul, who served several local carriers, said when the third terminal is operational in October, five to six new foreign airlines will serve Dhaka. "The foreign carriers will serve Dhaka as we could not operate flights to new destinations or increase flight frequencies."

Nazrul said a huge amount of foreign currencies are going out of the country as foreign carriers dominate the market.

The more passenger numbers will increase, the more foreign currencies Bangladesh will lose, and the more market share foreign airlines will have, he said.

"We created an aviation market that has been captured by others," he said, adding, "It's because we have only two airlines that are operating flights on international routes and they cannot cash in on the booming passengers."

Since foreign carriers dominate the market, they have the luxury to hike airfares citing high demand, he added.

Incomes and profits of foreign airlines are so much that the government is now not able to allow them to remit all their incomes and profits due to dollar crunch.

According to International Air Transport Association (IATA) that represents some 320 airlines comprising 83pc of the global air traffic, Bangladesh was withholding $214 million of airlines' funds until June, 2023.

Nazrul said the government should reform the aviation sector and policies to promote local carriers.

Local carriers should have lower charges, like landing, navigation, and parking fees, and pay less for fuel.

He said regulatory authorities and respective governments share some blame for the eight to 10 local carriers closing shop over the last 28 years.

Kazi Wahidul Alam, editor of The Bangladesh Monitor, an aviation and tourism related publication, said foreign airlines are increasing flight frequencies to Bangladesh in a planned way to capture passengers.

"But our local carriers failed to do this. That's why our market share is decreasing," he added.

Wahidul, also a former member of the Biman board, said usually local carriers of other countries enjoy about 50 of the market share in their hubs.  

"But Biman failed to capture the market due to the absence of proper planning, marketing, and expansion of its fleet and network," he said.

This paper could not reach the managing director and CEO of Biman for comments despite repeated attempts.

Kamrul Islam, general manager of public relations at US Bangla Airlines, said the carrier is in the process of fleet enhancement and will increase flight frequencies to different destinations to better tap into the market.

"At the same time, we need policy support from the government and CAAB so that we can compete with foreign carriers," he said.

Comments

Foreign airlines carving up market for themselves

Local carriers fail to capture increasing number of flyers
Air travel tax

Even though Hazrat Shahjalal International Airport now deals with twice the number of passengers it used to 10 years ago, local carriers have been losing market share.  

The 32 foreign airlines serving Dhaka on the other hand have been carving up the market for themselves.    

The number of passengers using the Dhaka airport in 2014 was around 60 lakh while in 2023 it increased to around 1.20 crore, according to documents of Civil Aviation Authority of Bangladesh (CAAB) placed before Monday's meeting of the Parliamentary Standing Committee on the Civil Aviation Ministry.

"But Biman failed to capture the market due to the absence of proper planning, marketing, and expansion of its fleet and network."

— Kazi Wahidul Alam, editor of The Bangladesh Monitor

In 2014, the airport had 95,191 flights and in 2023, it had over 1.88 lakh, according to CAAB statistics.

Aviation expert ATM Nazrul Islam said it is good that the Dhaka airport terminals have the surplus capacity to deal with the increasing number of passengers, but the sad story is that Biman's market share of 32 to 34 percent in 1990 has come down to 22 to 24 percent.

Local carriers Biman, US-Bangla, and Novoair operate international flights. Of them, the national flag carrier with its fleet of 21 aircraft flies to 23 international destinations, while US-Bangla with its fleet of 24 aircraft operates flights to 12 destinations. Novoair flies to one regional destination, according to the officials of the carriers.

Nazrul, who served several local carriers, said when the third terminal is operational in October, five to six new foreign airlines will serve Dhaka. "The foreign carriers will serve Dhaka as we could not operate flights to new destinations or increase flight frequencies."

Nazrul said a huge amount of foreign currencies are going out of the country as foreign carriers dominate the market.

The more passenger numbers will increase, the more foreign currencies Bangladesh will lose, and the more market share foreign airlines will have, he said.

"We created an aviation market that has been captured by others," he said, adding, "It's because we have only two airlines that are operating flights on international routes and they cannot cash in on the booming passengers."

Since foreign carriers dominate the market, they have the luxury to hike airfares citing high demand, he added.

Incomes and profits of foreign airlines are so much that the government is now not able to allow them to remit all their incomes and profits due to dollar crunch.

According to International Air Transport Association (IATA) that represents some 320 airlines comprising 83pc of the global air traffic, Bangladesh was withholding $214 million of airlines' funds until June, 2023.

Nazrul said the government should reform the aviation sector and policies to promote local carriers.

Local carriers should have lower charges, like landing, navigation, and parking fees, and pay less for fuel.

He said regulatory authorities and respective governments share some blame for the eight to 10 local carriers closing shop over the last 28 years.

Kazi Wahidul Alam, editor of The Bangladesh Monitor, an aviation and tourism related publication, said foreign airlines are increasing flight frequencies to Bangladesh in a planned way to capture passengers.

"But our local carriers failed to do this. That's why our market share is decreasing," he added.

Wahidul, also a former member of the Biman board, said usually local carriers of other countries enjoy about 50 of the market share in their hubs.  

"But Biman failed to capture the market due to the absence of proper planning, marketing, and expansion of its fleet and network," he said.

This paper could not reach the managing director and CEO of Biman for comments despite repeated attempts.

Kamrul Islam, general manager of public relations at US Bangla Airlines, said the carrier is in the process of fleet enhancement and will increase flight frequencies to different destinations to better tap into the market.

"At the same time, we need policy support from the government and CAAB so that we can compete with foreign carriers," he said.

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