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Local airlines falling off the skies

Sohel Parvez
Foreign carriers have captured nearly two thirds of the Tk 3.000 crore Bangladesh aviation market as local airlines, especially Biman, suffer capacityconstraints, 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, " hesaid.
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 Chat 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, A310-300, 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.
sohel@thedailystar.net