Private airlines claim losses on domestic flights for fuel price hike, Biman's business practice

NOVOAIR says they lose Tk 2,630 per seat due to an increase in fuel prices, fees and surcharges, and the facilities Biman is afforded as the state carrier

Published : 15 Sept 2022, 03:29 PM
Updated : 15 Sept 2022, 03:29 PM

The private airlines claim they are struggling to operate domestic flights due to losses caused by an increase in fuel prices, fees and surcharges, and the facilities Biman Bangladesh Airlines is afforded as the state carrier.

Mofizur Rahman, managing director of NOVOAIR, said at a workshop organised by the Aviation Operators Association of Bangladesh on Thursday that they lose Tk 2,630 per seat on domestic flights.

As many as 10 private airlines launched operations on domestic routes in the country in 26 years, but only two have continued services – NOVOAIR and US-Bangla Airlines.

Some general aviation and flying schools and 10 organisations offering helicopter trips are also members of the AOAB.

Speaking about the problems in operating domestic flights, Mofizur, who is also secretary general of the AOAB, said it was difficult to say where to start as the problems are everywhere.

He said fuel prices have increased to such a level that they need to spend 50 percent of flight operation costs on fuel.

“And we have only one supplier while all the airports in other countries have more than one supplier,” Mofizur said, complaining about the services provided by the sole supplier.

He said the airlines pay excessive amounts of taxes to bring plane parts.

“We are facing huge losses for these reasons. Accounts show that the losses amount to Tk 2,630 per seat.”

“But the international flights are still profitable. The private airlines are trying to cover the losses with the profit from international flights and other businesses. I don’t know how long we will be able to continue this way.”

Mofizur said they do not need cash incentives, but policy support from the government. “Flag carrier Biman’s business policy appears to have been designed to put pressure on the private airlines.”

He said Biman is using its large Boeing 777 to carry passengers on domestic flights with cheaper tickets. “Ultimately, a Biman plane engine is requiring overhaul that costs between $17 million and $20 million after 2,500 flight hours while such overhauls are required after 5,000 flight hours.”

“Their debts amount to $500 million. We need to rethink whether we have the luxury to let Biman do these things only because it is the state carrier.”

Lutfor Rahman, a director of US-Bangla, said they were expanding business on international routes, but it was getting difficult to survive the “unequal competition” with Biman on domestic routes. “We are forced to offer the same fare as Biman despite losses.”

Biman spokesperson Tahera Khandaker declined to comment on the claims of the private airlines.

Aviation expert Wahidul Alam said the foreign airlines take away tens of billions of taka from Bangladesh every year. “It will be possible for the local airlines to keep a portion of that money in the country if they can compete with the foreign ones. The government needs to provide them with policy support for this to happen.”

Anjan Chowdhury, president of AOAB who runs Square Air that operates helicopter trips, said the government was not permitting helipads on high-rise buildings for fear of crashes and risks of drug trafficking.

“Helicopters can be very useful in transporting patients from remote areas. But how will it work if it takes two hours to transport a patient to the hospital from the airport?”

Toufique Imrose Khalidi
Editor-in-Chief and Publisher