Committed to PEOPLE'S RIGHT TO KNOW
Vol. 5 Num 249 Sat. February 05, 2005  
   
Business


Aviation industry fails to take off as open sky policy still on paper
Govt keeps new foreign airlines at bay on Biman interest, goes strict on flight frequency


Bangladesh's aviation industry remains stagnant as the government puts all forms of red tape in allowing operation of new foreign airlines and maintains a strict policy in giving more flight frequency to operational ones.

In the last six years only two foreign airlines could overcome the bureaucratic tangles to start operations in Bangladesh. And four airlines wounded up operations as government did not agree to permit more flight frequency, which proves that government's open sky policy still remains only on paper.

If a foreign airline is to start operation, apart from government bottlenecks, it must get no objection clearance from national carrier Biman. And in most cases many interested foreign airlines cannot launch services as they fail to get Biman clearance, aviation sources say.

Most of |he 14 foreign airlines operating in the country have long been |rying to get more flight right but government ignores their demind thinking tha| it could result in financial loss to the national airline

Failing to get more flight right, Uzbekistan Airlines last month pulled out of Bangladesh. The airline sought to increase weekly flights to four from two. An official of the airline said two weekly flights are not economically viable as returnee passengers have to wait nor one week if one flight is missed.

Silk Air, Oman Air and Aeroflot are some of the airlines that pulled out of Bangladesh in the last few years. Apart from Uzbekistan Aizlines, Yemen Airlines is another carrier that launched services in Dhaka in the last six years.

Royal Brunei Airlines, Air Macau, Abu Dhabi-based Etihad Airways, Iran's Mahar Air and Sharja-based Air Arabia are interested to fly to Dhaka. But instead of welcoming the airlines and completing regulatory requirements, the government shows lukewarm interest.

Qatar Airways, which presently operates four weekly flights, wants daily flights from Dhaka while Emirates wants to add five to its current nine flights. Besides, Kuwait Airlines likes to operate seven flights up from the existing four, Malaysia Airlines wants daily fights instead of its four weekly flights and Iran Air is interested to fly twice up from once a week.

Gulf Air presently operating eight weekly flights, Saudi Arabian Airlines running nine flights, Thai Airways operating seven flights, Singapore Airlines having seven flights, Dragon and British Airways and Pakistan International Airlines all operating three weekly flights are interested to operate more flights from Bangladesh.

Foreign airlines operate about 70 flights a week from Dhaka. Biman operates some 60 international flights a week. GMG Airlines operates three international flights from Chittagong and two from Dhaka. Thai private carrier Phuket Air also operates two flights from Chittagong.

Aviation observers say as the international air traffic from Bangladesh is growing around six to seven percent, the 130 odd weekly international flights are not enough. They say passengers often cannot book tickets at convenient time due to scarcity of seats.

"This is a seller-dominated market as there is littlm option for passengers. If aviation sector is to expand, there should be a buyer-dominated market. Travellers can get tickets at lower prices, if there are many airlines in same route," an aviation expert said.

He said as some five airlines have flights on Dhaka-Kuala Lumpur rou|e, a two-way ticket for the four-hour flight co{ts $230 while as only two airlines fly on Dhaka-Bangkok route, a two-way ticket for the two-houz flight costs $320.

Both Biman and the Civil Aviation Authority of Bangladesh (Caab) benefit financially from number of flights operated by foreign airlines. Biman gets about $4,000 by providing ground handling services and Caab gets about $3,000 for navigation, parking and other services from each flight.

A rough estimate shows that Biman earns about $20 million and Caab $15 million a year from providing the ground handling and navigation services for foreign airlines. Biman also earns zoyalty from somm foreign airlines. If a national flag carrier of a country operates flights to Bangladesh but Biman does not flies to that country, Biman, as the national carrier, can demand royalty from that foreign airline.

Although the national carrier and government can benefit largely from operation of overseas airlines, the government maintains a strict policy on allowing more foreign airlines and giving the existing airlines more flight rights apparently because of Biman, which failed to make profit in 33 years of its inception.

Aviation experts term Biman a dormant airline, which could not open a new route in last 13 years. Biman's last international expansion was way back in 1992 when it launched Dhaka-New York flights.

However, a high-ranking official of civil aviation ministry dismissed that the government maintains a strict policy on allowing operations of new foreign airlines and giving more flight rights.

Airlines of two countries fly on the basis of air service agreement (ASA). If there is no ASA, airlines of the two nations cannot fly to each other. The ASA also stipulates how many times an airline can fly to a country, the official said.

A high-profile Biman official said Biman has no objection if the airlines want to increase flight frequency on point-to-point routes. But if the national carrier wants increased flight frequency to carry passengers to a third country, it may further affect Biman's traffic to European and other countries, he added.

Passengers from Bangladesh to |he home countries of most of thm foreign airlines constitute only 30 percent of the total passengers. The airlines are sending the rest 70 percent passengers from Bangladesh to European and other destinations with connecting flights, the official said.