Air travel options decrease with suspension of operations by three airlines in BD

- By Raquib Siddiqi 01 Dec, 2017  |    -      +
Dhaka : Three foreign airlines, have in recent months, suspended operations to and from Bangladesh, decreasing options for the passengers and making the aviation market of the country poorer.

The airlines that have suspended operations until further orders are : (1) Thai Smile, (2) Oman Air and (3) Bangkok Airways.

Of the three airlines, Thai Smile suspended operations to and from Chittagong. The airline started Chittagong operations in March this year and suspended operation four months later in July.

Oman Air suspended operations to and from Dhaka and Chittagong, from Chittagong in May and from Dhaka in October this year. Oman Air started operations to Bangladesh a decade ago.

Bangkok Airways suspended operations to and from Dhaka from November 7. The Thai boutique airline began operation to Dhaka in 2011.

Benefits of aviation

Aviation is at the heart of global economic development and is widely recognised as a key contributor to economic and social development. Over the times some governments have come to understand the importance of air connectivity built on global standards and to include it as a priority in their economic strategies. This is happening in some parts of the Asia-Pacific region, Bangladesh not included.

In South Asia, departure capacity has been growing at an average annual rate of 17.7 per cent since the start of the decade with the fastest rates of growth being recorded by the Maldives (16.5 per cent), Sri Lanka (12.4 per cent) and Bangladesh 11.1 per cent in 2016.

The growth in Bangladesh is continuing. In 2015, the number of air passenger in Bangladesh was 55,568,934 and volume of air cargo was 2,58,010 tons. The number of passengers and volume of cargo increased to 59,36,852 and 2,81,993 tons in 2016. There is no sign of change in growth trend. Figures up to June this year (2017) shows that the growth is likely to surpass growth of previous years. Up to June, the number of air passengers was 32,10,761 and volume of cargo was 1,52,825 tons.

Air transport to, from and within Bangla-desh creates three distinct types of economic benefit. Typically, studies such as this focus on the "economic footprint” of the industry, measured by its contribution to GDP, jobs and tax revenues generated by the sector and its supply chain. But the economic value created by the industry is more than that.

The principal benefits are created for the customer, the passenger or shipper, using the air transport service. In addition, the connections created between cities and markets represent an important infrastructure asset that generates benefits through enabling foreign direct investment, business clusters, specialisation and other spillover impacts on an economy's productive capacity.

Importance of air connectivity

In the past decades, global aviation has changed. The aviation industry is playing a crucial role in helping to facilitate tourism_ just over half of all tourists travel by air.n total, aviation-related tourism supports 35 million jobs worldwide, contributing more than US$800 billion to global GDP. Regionally, the impact of tourism can be even more profound with new air services increasing the propensity to travel and this is clear to see across the Asia-Pacific region.

It is a widely held belief that the axis of the global aviation industry is moving east as the Asia-Pacific region surpassing both North America and Europe in terms of passenger numbers by the end of the next decade.

Forecasts from the industry body International Air Transport Association (IATA) suggest that by 2034, 7.3 billion airline passengers will be travelling globally, more than double the 3.5 billion passengers that travelled by air in 2015, with a significant number of these additional passengers flying to, from and within this region.

Establishing new routes can open up new markets for both passengers and goods movement and not only build traffic but also generate additional non-aeronautical revenues on the ground. The Routes business, a division of UBM EMEA, has become an important facilitator for networking between airlines, airports and to an increasing degree, tourist authorities.

Changing industry landscape

In the changing industry landscape airlines are now looking beyond airports for support and are regularly seeking to engage with tourism authorities when considering a new service. The course will show tourism authorities, economic development agencies, government departments and industry associations how to take the initiative with airlines and help them to understand different airline models and types of traffic, the economic benefits of new services and how to build a compelling business case for new air routes.

The industry's growth holds big economic promise for the Asia-Pacific with an additional 2.5 billion more passengers estimated to be flying annually to, from, and within the region by the mid-2030s with one in every five global air travellers traveling to, from, or within China by 2034.

The industry already supports over 24 million jobs across the Asia-Pacific region, with a total economic impact exceeding US$500 billion and every new traveller brings an opportunity for further economic gain.

Lack of marketing

Airports and tourist boards have, of course, become extremely sophisticated in their marketing over the past decades but the need to connect them with airlines is still, as true today, as it was when the first ever World Routes took place in Cannes in September 1995.

However, Civil Aviation Authority of Bangladesh (CAAB), the regulatory body of civil aviation in the country, is yet to take step towards marketing the country in regard attractions more airlines to start their operations to Bangladesh.

BD not at fault

The suspension of operation by three foreign airlines from Bangladesh aviation market, can be considered as a set back, because global air connectivity drives tourism and economic growth and so, operation of more and more airlines are sought by all the countries of the world.

"Commercial" is the common reason given for suspension of operation, by all the three airlines. But there are other factors that contributed to the suspension of operation.

Thai Smile Airways, a Thai Airways International (THAI) subsidiary, launched a new route, connecting Thailand and Bangladesh. The airline started serving Bangkok-Chittagong route_ three times per week_ using Airbus A320s.

The carrier will codeshare with Thai under flight numbers TG 2355 and TG 2356. Flight TG 2355 used to depart from Suvarnabhumi International Airport, Bangkok at 21:20 PM and arrived at the Hazrat Shah Amanat International Airport in Chittagong at 22:45 pm, while the returning flight TG 2356 used to leave Chittagong the same day at 23:45 pm and arrive in Bangkok around five minutes after three in the morning, local time.

According to GSA of the airline, the timing was an unfavourable factor. Shortage of aircraft was another factor for suspension, Albeit "commercial" reason was cited for suspension of operation, Oman Air is now in the process of re-structuring its global operation, to reduce revenue loss. The airline enjoyed good load, despite significant capacity hike on the route, because of start of operation by private airlines of Bangladesh. Increased competition resulted in lower yield.

Bangkok Airways enjoyed good load and served mostly the corporate travellers from Bangladesh. However, with the operation of private airlines of Bangladesh on Dhaka-Bangkok route, the capacity suddenly became almost double. But issuance of visa was not increased as per capacity increase. This, along with reduction of yield might have acted behind taking decision to suspend operation.

From the existing situation, it can be safely said that Bangladesh is no way at fault for the suspension of operation of these three airlines. There is continuous healthy growth of market, load factors of two of the concerned airlines from Bangladesh market were good and there was no conflict with regulatory authority.

No adverse impact

However, absence of these airlines are not likely to have negative impact on the aviation market of the country, as despite no marketing, Bangladesh market has attracted fairly good number of airlines_ albeit all from Asia, because of increasing demand for airline seats and cargo capacity.

The country is now being served by : Air India, Air Arabia, Air Asia, China Southern Airlines, China Eastern Airlines, Cathay Pacific Airways, Druk Air, Emirates Airlines, Etihad Airways, Fly Dubai, Gulf Air, Jet Airways, Kuwait Airways, Malaysia Airlines, Malindo Air, Maldivian Air, Pakistan International Airlines. Qatar Airways, Singapore Airlines, Saudi Arabian Airlines, Spice Jet, Srilankan Air, Thai Airways, Turkish Airlines and Scoot Air.

Seven of these airlines-Emirates, Qatar Airways, Turkish Airways, Cathy Pacific, Etihad Airways, Saudi Arabian Airlines and Malaysian Airlines are also operating cargo flights.

In addition to the foreign airlines, four domestic airlines_ Biman Bangladesh Airlines, Regent Airways, NOVOAIR and US-Bangla Airlines are also serving Bangladesh market.

Moreover, there is good news that the three airlines have just suspended their flights until further order_ did not withdraw the operation. So, it seems absence of these three airlines in Bangladesh aviation market is temporary. With reason for suspension gone, they are likely to resume flights.

Also on Bangladesh Monitor