Int'l passengers growing. What's the plan of local airlines?
In a significant move aimed at boosting their capacity to cater to growing international passengers, four local airlines, including the state-owned Biman, have unveiled plans to expand their fleets by incorporating at least 11 new aircraft this year.
Currently, foreign operators are doing well in the sector, commanding a staggering 75% of the market share that gives them the power to charge fares at will, say industry insiders.
With the addition of these new planes, namely the Airbus A330-300, Airbus A321, Boeing 737-800, and ATR 72-600, both US-Bangla, Novoair, Air Astra, and Biman will get a substantial boost in their capacity. This will see their collective capacity soar by approximately 30%, translating to a capacity to transport 21,100 passengers per day.
Based on opinions of airline officials, these 11 new planes are expected to make 4,840 fresh seats available in the market.
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Biman Bangladesh Airlines has started negotiations with aviation giants Boeing and Airbus. The national carrier aims to enhance its existing fleet of 21 aircraft by procuring a minimum of two to a maximum of four new aircraft within the year, a senior Biman official told The Business Standard.
However, he did not clarify if Biman was opting for a mixed fleet by purchasing aircraft from both manufacturers.
Currently, Biman's fleet is composed of aircraft from the US-based Boeing.
At present, local carriers operate flights on 32 international routes and plan to increase this number to above 48 by the end of this year. Additionally, the total number of planes will increase to 63 from the existing 52.
Private airlines capacity grows, mostly with US-Bangla
In late 2022, the capacity of private airlines was 5,000 passengers per day on 22 planes. Over the past year, they have now had 31 aircraft with a per-day passenger capacity of more than 11,000.
However, the lion share of this growth was carried out by US-Bangla, as it has added eight aircraft in the meantime.
Shafiul Azim, managing director of Biman, told The Business Standard, "We are in the process of procuring both wide-body and narrow-body aircraft by this year."
"We need significant investment to handle passenger growth. In Asia, countries like India, Thailand, and Vietnam are planning to purchase hundreds of aircraft; they also aim to attract our passengers. If we remain passive, we will lose our market share," he added.
He said Biman aims to launch new routes this year, including Dhaka-Rome, Dhaka-Kunming, and Chattogram-Bangkok, as well as increase the frequency on existing routes. Therefore, adding new aircraft is essential.
Bangladesh airports handled 17.4m passengers last year
Bangladesh's airports saw a record 17.4 million air passengers last year, most of whom were international travellers, marking nearly 23.4% year-on-year growth, according to the Civil Aviation Authority of Bangladesh.
The number of international passengers, comprising both Bangladeshis and foreign nationals, surged by around 2.67 million over the past year, representing an around 30% increase from the previous year and an around 37% rise compared to the pre-Covid-19 period.
Sector insiders point out that the data underscore the expansion of air travel to and from Bangladesh, attributing it to various factors such as record labour exports, increasing educational migration, outgoing medical and leisure tourism, and business travel.
The growth in the number of air passengers in the country aligns with the global trend, as total traffic worldwide rose by 36.9% in 2023 compared to 2022. According to the International Air Transport Association (IATA), global traffic for the full year of 2023 reached 94.1% of pre-pandemic (2019) levels.
Airport developments worth TK32,000 cr
The huge airport development across the country, worth taka 32,000 crore, including the third terminal of Dhaka airport, is also encouraging the airlines to spread their wings to South Asia, Southeast Asia, the Middle East, and European routes.
"Local airlines should be prioritised, as seen in other countries where at least 50% of passengers are carried by domestic carriers. However, in Bangladesh, this figure remains within 25%."
Thirty-five foreign carriers currently account for 75% of passenger and cargo transport, underscoring the significant potential for further growth in the Bangladesh air transport industry.
The local carriers are looking to compete with foreign carriers to take a piece of the pie of their passenger traffic by expanding fleets and frequency.
Kazi Wahidul Alam, an aviation analyst, believes that local airlines have the potential to expand their operations and effectively compete with foreign operators.
"Local airlines should be prioritised, as seen in other countries where at least 50% of passengers are carried by domestic carriers. However, in Bangladesh, this figure remains within 25%," he told TBS.
He emphasised that due to this imbalance, foreign airlines dictate fares as they wish, resulting in high-priced tickets.
Squadron Leader Lutfor Rahman, chief executive officer at US-Bangla Airlines, told TBS, "As the number of international passengers increased, we adjusted our flight frequency accordingly. Now, we are going to add more aircraft to our fleet. Already, three new planes have been added this year. More will be added in the coming months."
The US-Bangla now has a fleet of 23 aircraft.
US-Bangla Airlines expanded its fleet in February with two aircraft, the Airbus A330-300 and Boeing 737-800, thereby becoming the largest airline in Bangladesh by fleet size.
There are plans to add another wide-body aircraft, a 436-seat Airbus A330-300, very soon.
Sources at the airline said that at least three more narrow-body airlines will be added by the end of this year. However, it is yet to be finalised as the deal is under process with both Boeing and Airbus.
The new aircraft will service routes to Dubai, Sharjah, Muscat, Doha, and Kuala Lumpur.
Additionally, US-Bangla plans to deploy the Airbus aircraft on routes to London and Rome, as well as to Jeddah, Riyadh, and Dammam in Saudi Arabia in the future.
Novoair leans towards Airbus
Currently, Novoair has five ATR 72-500 aircraft. It has plans to expand its capacity by adding at least three Airbus A321neo models.
The Airbus A321neo is the longest-fuselage member of Airbus' best-selling, single-aisle A320 Family, seating 180 to 220 passengers in a typical two-class interior layout, and as many as 244 in a higher-density arrangement.
"In the short term, we aim to focus on destinations within Asia. Our specific targets within Southeast Asia include Thailand, Malaysia, and Singapore. We plan to commence flights to these countries by 2024," Mofizur Rahman, managing director of Novoair, told TBS.
"That is why we have plans to incorporate larger aircraft into our fleet. Our fleet strategy has always been focused on Airbus. We aim to add three more aircraft by the middle of this year," added Mofizur, who is also secretary general of the Aviation Operators Association of Bangladesh (AOAB).
The airline sources said that Boeing is also approaching Novoair for sales.
Air Astra also plans to expand its wings
Entering the industry in November 2022, Air Astra currently operates flights to domestic routes.
However, the airline has applied to the Civil Aviation Authority of Bangladesh for international flight operations.
Sources at the airline said at least two more aircraft will be added to Air Astra's fleet by this year.
"We are awaiting a positive decision from the regulatory body regarding our international operations. If everything goes well, we hope to start flights to Nepal and India," Imran Asif, CEO of Air Astra, told TBS.
"Next March, we will add one more ATR. Then our daily passenger carrying capacity will be around 2,500. As of 27 February, our capacity is 1,960."
"With the ATR, we cannot operate on routes beyond Nepal and Kolkata. That's why we intended to add larger aircraft to the fleet this year. However, it is not possible to acquire aircraft from either Boeing or Airbus by this year," he continued.
