Airlines struggle to acquire planes amid global supply shortage

Infographic: TBS

Highlights: 

• Local airlines failing for a year to secure needed aircraft
• Biman, US-Bangla, Air Astra forced to cut existing flights
• Global supply crisis blocks new acquisitions
• Used aircraft not entering lease market as makers delaying delivery
• Bangladesh's 15-year age limit for used planes adds pressure
• Also, global lessors wary of leasing to Bangladeshi airlines

Despite a growing number of passengers, local airlines are struggling to increase flight frequency or launch new routes due to their inability to acquire aircraft – either through purchase or lease – because of a global supply shortage.

Industry insiders say local operators, including the national carrier Biman, have been trying to acquire at least 15 mid-sized aircraft since last year but have so far failed to meet their immediate needs.

The aircraft shortage has severely disrupted the expansion plans of Biman Bangladesh Airlines, US-Bangla Airlines, and Air Astra, which aimed to launch services on at least 12 new international routes by next year.

These airlines are even struggling to maintain regular operations, forcing them to cut existing flights.

"We tried to source aircraft from known suppliers for our international expansion plans. We looked into both Airbus and Boeing, but couldn't find availability within a favourable timeframe," Imran Asif, CEO of Air Astra, told The Business Standard.

Bangladeshi airlines are facing an added challenge as the Civil Aviation Authority of Bangladesh (CAAB) has reduced the maximum permissible age for inducting used aircraft from 20 years to 15, a policy in effect since mid-2021.

"Due to the global aircraft shortage, airlines everywhere are suffering. But we're facing greater difficulty because the age limit for aircraft on prior lease has been lowered," Imran Asif said.

Regarding the issue, Air Vice Marshal Mohammad Monjur Kabir Bhuiyan, chairman of CAAB, said, "After careful consideration and consultations with operators, the age limit was set at 15 years.

"We have not yet received any formal written requests from operators to extend this limit."

Global aircraft supply shortage

According to industry insiders, during the Covid-induced global travel shutdown, many factories that manufacture aircraft parts and components were forced to shut down.

Although the market has since reopened, production of aircraft parts has yet to return to pre-pandemic levels. As a result, not only is the production of new aircraft severely limited, airlines are also facing difficulties in sourcing parts needed to repair existing planes, they say.

International media reports suggest that airlines around the world have seen their growth hampered by delays in jet deliveries stemming from problems at Boeing and Airbus, as well as their suppliers.

Airbus, the world's largest planemaker, lowered its delivery targets in July last year, while Boeing slowed production due to a strike and heightened regulatory scrutiny following a safety crisis, Reuters reported in December.

"Boeing has reduced aircraft production, putting added pressure on Airbus as global demand for planes continues to grow. Normally, when airlines receive new aircraft, they release older ones into the leasing market. But since new deliveries are delayed, those older planes are staying in service longer and not becoming available for lease," Mofizur Rahman, managing director of Novoair, told The Business Standard.

Aviation operators believe it will take three to four more years for the global aircraft supply to recover.

In its airline industry outlook published last December, the International Air Transport Association (IATA) noted that aircraft deliveries have declined sharply from a peak of 1,813 in 2018.

For 2024, deliveries were projected at 1,254 aircraft – 30% below the initial forecast for the year.

While deliveries are expected to rise to 1,802 in 2025, this remains well below the earlier projection of 2,293, with further downward revisions considered likely.

Operational pressure mounts on local airlines

Amid sustained passenger demand, state-run Biman initiated a move last September to lease two additional aircraft.

However, despite issuing four rounds of tenders, it received no response. As a result, Biman had to adjust flights on other routes to accommodate the Hajj operations this year.

"Biman usually operates Hajj flights using its regular aircraft," said Masud Rana, its manager. "To ease pressure on other routes during the season, we tried to lease additional planes."

He said, "We issued several rounds of request for proposal to secure an aircraft, crew, maintenance and insurance [ACMI] lease for six months but couldn't manage to get any aircraft."

Recently, Biman suspended its Narita flight where one of the causes shown by the airline is shortage of aircraft out of commercial viability. 

Novoair has been trying to acquire three aircraft since 2023 but has failed.

The airline has also been looking to sell its entire fleet of five ATR 72 aircraft, built between 1999 and 2002, as their maintenance costs have become unsustainable.

Novoair had planned to secure new aircraft before phasing out the old ones, but that plan has not materialised.

According to company sources, this is one of the main reasons behind the near-suspension of its operations and mounting business losses, compounded by a lack of adequate policy support from the government.

"We've tried hard to get aircraft over the past one and a half years, but haven't been successful. Looking ahead, we don't see any possibility of acquiring aircraft within the next year either," said Novoair MD Mofizur Rahman.

Past defaults taint reputation

Aircraft are not completely unavailable, but Bangladesh faces unique challenges, said Mofizur, who is also the secretary-general of the Aviation Operators Association of Bangladesh (AOAB).

"One of the key issues is that major global lessors are unwilling to lease to us. During the previous government's tenure, the country's balance of payments deteriorated, and the government restricted outward remittances. At that time, lessors questioned the guarantee of payment from Bangladeshi operators," he told TBS.

He further pointed out that Bangladesh's track record in honouring lease agreements is not strong.

"Aviation is an industry where, if one company defaults or causes trouble for a lessor, the entire industry earns a bad reputation. In the past, some Bangladeshi airlines failed to meet their contractual obligations, which has made some lessors reluctant to do business here," he added.

Operator's capacity crisis despite rising travel demand

Although domestic passengers have decreased in a few routes due to the developed road and rail connectivity in the past two years, the number of passengers passing through Dhaka airport grew by approximately 7% over the past year, despite significant political turmoil.

According to Dhaka airport data, around 12.5 million passengers – both domestic and international – travelled through the country's largest airport in 2024. The number was 11.7 million in 2023.

Kamrul Islam, general manager (PR) of US-Bangla Airlines, told TBS, "We may need to add at least three to four more aircraft to fulfil the growing demand. Earlier, aircraft options were available, but now the availability is much lower than the demand."