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crore Bangladesh aviation market as local airlines, especially Biman,
suffer capacity constraints, industry analysts said. The dominance is
an indicator that huge forex is drained out of Bangladesh. Much of
the money could have been saved if Bangladesh had paid enough
attention to strengthening the capacity of the state-owned carrier.
Biman's market share hovers around 30 percent in passenger haul,
down from more than 40 percent in 2001 , despite air travel growth by
the year due to the regular outflow of Bangladeshi migrants. Foreign
carriers largely account for market growth as new entrants debuted
operations and existing carriers increased flight frequencies and
enhanced products and services to catch up with an increased traffic
flow in recent years. "The reason behind the growth is that foreign
carriers are able to present tailored services to the needs of their
clients," said K Ashraful Kabir, country manager of UAE's national
carrier Etihad Airways that began flights from Bangladesh in 2006.
"Along with enhancing our products, we offer connections to our
guests' desired destinations through our own network or the
international network," he said. Onward connections, better services
and diversified products have mainly helped foreign carriers secure
much of the share in the Bangladeshi aviation market. Foreign carrier
traffic surged 47 percent to 23.32 lakh passengers in 2008 , compared
to 2005 , out of Zia International Airport, according to Civil
Aviation Authority, Bangladesh (CAB) data. By contrast, traffic to
Biman grew 11 percent in the same period. Total traffic from ZIA
surged 43 percent to 37.48 lakh passengers in 2008 , compared to
2005. "It is true that the Bangladeshi aviation market has grown. But
our capacity has not increased as much; rather it has declined over
time. That's why we are losing our market share," Muhammad Zakiul
Islam, managing director and chief executive of Biman. Since 2005 ,
the airline's fleet size narrowed to below 10 aircraft from 14 ,
which forced the national carrier to suspend flights on 10 routes
and cut frequencies to several destinations. The carrier now flies to
16 destinations, down from 26 in 2005. On the other hand, foreign
airliners increased flight frequencies by offering increased onward
destinations to Bangladeshi travellers. The latest offer was made by
Kuwait Airways, which announced a plan to operate two flights a week
from Chittagong. Early this year, Emirates added three more flights a
week to take the total weekly number to 17. The Dubai-based carrier
had earlier said it would operate 21 flights a week from Bangladesh
in "near future". New entrants have also made a mark in the
Bangladeshi skies. In the last three years, at least seven carriers
began operations from Bangladesh, with three new names this year
alone. China Southern Airlines was the latest to begin flights from
Bangladesh, followed by Kingfisher Airlines and budget carrier Air
Asia X. Biman officials said such an increase in frequencies and
foreign carrier operations and subsequent cuts in Biman's operations
led to the rise in foreign carrier market share. Government decisions
on several past occasions to increase traffic rights of foreign
carriers have also made contributions. Officials said such decisions
were not always taken by considering the basic traffic flow between
the two countries, but by looking at the onward connections that the
carriers have to offer. Insiders said Biman is also hurt by technical
glitches and irregular schedules because of an aging fleet -- the
average age of the fleet is 25 years, with the youngest aircraft, A
310-300 , being 15 years old. "Passengers have also lost confidence
on us as we cannot always provide aircraft for scheduled flights,"
said the Biman CEO. On how to regain a market share, Kazi Wahidul
Alam, editor of an aviation and tourism fortnightly The Bangladesh
Monitor, suggested: " Biman will have to bring in new aircraft to
expand capacity." To infuse dynamism into Biman, the government
turned the carrier into a public limited company in July 2007. The
carrier had later sealed a deal to acquire 10 aircraft from Boeing,
which is expected to start delivery in 2011. In the meantime, Biman
planned to lease seven aircraft to operate flights on existing routes
as well as resume flights on some suspended destinations, such as
New York. "We will be able to recover lost market share once we have
aircraft," said the Biman chief. But Alam said it is a must for Biman
to restructure its management to compete with global carriers.
