Wider skies for private airlines

The government will reallocate the frequency of local carriers’ flights from Dhaka to London to allow private airlines a wider access to global aviation.
The move comes at a time when the capacity of local private carriers to utilise opportunities is being questioned.
As part of the move, GMG Airlines and United Airways will be able to fly twice a week on the Dhaka-London route where the carriers have no flights now. Biman Bangladesh Airlines will operate six flights instead of five, officials said.
The government has also planned to seek a revision of the air service agreement with Saudi Arabia to increase frequency from the existing 14 to 24 a week.
“We will request the Saudi Arabian authorities to raise the number of flights to give more options to local airlines to fly to the Middle East,” Hedayetullah Al Mamoon, secretary of the civil aviation and tourism ministry, told The Daily Star.
“We are also making a policy on the distribution of flight frequency to local airlines to bring transparency in the allocation process.”
Analysts are expressing doubts over the move to make room for four local private carriers — three of which came in the last two years — and their ability to tap the opportunities.
Most of these carriers suffer capacity constraints, such as in funds and aircraft.
Two carriers — Best Air and Aviana Airways — are grounded. Best Air was awarded permission to fly abroad last year. The carriers are facing regulatory restrictions to fly on safety issues. Troubled by a financial crisis, Best Air had also been forced to suspend its flights early this year.
The remaining two private carriers — GMG Airlines and United Airways — are still in operation.
Best Air and United Airways launched international flights in early 2008. Best Air had been aggressive in opening new routes. The airline began its first international flight to Bangkok in mid-2008 with its only leased Boeing-737-200. It had later opened flights to several new destinations, such as Bangkok, Colombo, Male, Dubai, Singapore and Kuala Lumpur, by discontinuing the previous ones.
For the country’s oldest private carrier GMG Airlines, which began international flights in September 2004, recent statistics are not heartening, analysts said. Last year, flight suspension plagued the carrier amid aircraft and fund shortages — a couple of months after it began operations on the Dhaka- Dubai route.
Local airliners linked much of their inabilities to last year’s global oil price hike, which also hurt the global aviation industry by dampening traffic flow.
Analysts however blamed their failures on poor planning and lack of capacity.
Earlier on several occasions, the government redistributed frequency and revised air-service agreements with different countries several times to allow these private airlines to operate in the global aviation market.
Stakeholders however said much of the attempt at frequency reallocation was due to state-run Biman’s failure to utilise all the frequency because of its weak and decades-old fleet and pilferage.
The analysts said a revision in air service agreements not only opened up opportunities for more local carriers to fly abroad but also enabled a greater number of foreign carriers to enter Dhaka, increasing the pressure of competition on the existing ones.
Most of the foreign carriers now have a growing market share, as local carriers are incapable to meet demand, they added.
Analysts said the government should consider the capacity of the local carriers prior to allocating flying rights in their favour. They also said the government should frame an aviation policy instead of a frequency distribution policy.
“I don’t see any rationale for framing a frequency distribution policy. The government should prepare an aviation policy to direct the aviation industry,” said Kazi Wahidul Alam, editor of aviation fortnightly The Bangladesh Monitor.
Alam also expressed doubts over the private carriers’ capacity to exploit the opportunities offered by the government. “I expect our local private carriers to develop. But my concern is whether will they be able to exploit the opportunities.”
“The problem is, we mostly have one-way traffic, as many travellers are migrant workers,” he said. “If local carriers could offer more onward connections, travellers may be benefited.”
“Local carrier will be able to survive global competition with a ‘strong financial base’,” Alam said. He suggested the government allow them to fly on a trial basis. “The government should take a decision, based on their performance.”
Imran Asif, an aviation consultant, echoed Alam. “The government should first see whether the airline has the capacity to operate flights, before allocating frequency. The government could do it by involving stakeholders, such as bankers,” he said.
“Otherwise, if a carrier fails to continue flights, other airlines will be affected, as it creates a bad reputation,” he said.

Courtesy of The Daily Star