Local airlines key to make Bangladesh aviation hub

Bangladesh cannot become a regional aviation hub simply by building large airports unless the country’s local airlines are strengthened, US-Bangla Airlines Managing Director Mohammad Abdullah Al Mamun said on Saturday.

He called for lower operating costs for domestic carriers, competition in ground handling services and policy reforms to create a more business-friendly environment for the aviation industry.

“Just calling ourselves an aviation hub will not make us one. Local airlines have to lead from the front,” Al Mamun said at a policy conclave titled World-Class Aviation for Bangladesh’s Economic Progress, organised by Bonik Barta at the United Convention Centre in Dhaka.

He said foreign airlines would not play the main role in making Bangladesh an aviation hub. Instead, local carriers must be made capable and given an easier operating environment.

Al Mamun also criticised the lack of consultation with airline operators in the development of the third terminal at Hazrat Shahjalal International Airport.

“The third terminal is supposed to be built considering the needs of operators and passengers. But airline operators have not been given adequate opportunities to provide their views on what facilities are needed,” he said.

Using Singapore as an example, he said a successful aviation hub needs more than passenger-handling infrastructure. Its terminals must offer shopping, entertainment and other facilities that encourage passengers to spend several hours at the airport.

“Without adequate international brands and entertainment facilities, it will be difficult to achieve the goal of becoming an aviation hub simply by building a large terminal,” he said.

On regulatory reform, the US-Bangla MD said the government had taken an initiative to replace the existing aviation regulations introduced in 1984.

He said the new regulations could bring significant changes to the sector and called for a more effective regulatory framework in line with international standards.

He also said the reforms could help airlines reduce costs related to aircraft maintenance. Engines and other complex aircraft components often have to be sent abroad for repair, resulting in higher costs and longer turnaround times.

According to Al Mamun, a Boeing aircraft engine can cost around $9 million, while a new engine can cost about $23 million. Dreamliner engines can cost between $50 million and $60 million.

He also highlighted the additional fuel costs caused by runway congestion at airports.

A Boeing aircraft can burn around 300kg of additional fuel while waiting for runway access, while an Airbus aircraft can consume around 900kg, he said. Even smaller aircraft can burn around 75kg of additional fuel during such delays.

For US-Bangla, the runway constraint alone is causing losses of around Tk2 million a day, he claimed.

He said aircraft have to wait in multiple queues during both landing and take-off, increasing fuel costs, disrupting schedules and causing passenger inconvenience.

Al Mamun also called for competition in ground handling services, saying multiple companies should be allowed to operate at Bangladeshi airports.

He compared Bangladesh with Kuala Lumpur and the Dhaka-Kolkata route, where multiple ground-handling companies operate, and said limiting competition to protect the national flag carrier was affecting service quality and air connectivity.

He further pointed to high taxes and charges as a major factor behind relatively high airfares from Bangladesh.

A passenger travelling from Dhaka to Kuala Lumpur pays around Tk9,890 in government taxes and VAT, while the corresponding cost for a passenger travelling from Kuala Lumpur to Bangladesh is around Tk200, he said.

He said similar differences existed on the Dhaka-Singapore route, with government taxes and charges amounting to around Tk9,890 when travelling from Bangladesh to Singapore, compared with around Tk5,800 in the opposite direction.

He also raised concerns over domestic travel costs, saying taxes and other charges add around Tk1,200 to the cost of a passenger travelling from Dhaka to Jashore.

Reducing aviation costs is also important for tourism and the export of agricultural products, he said.

Bangladesh remains behind other South Asian countries in tourism, while high air transport charges make it difficult to export agricultural products by air, he added.

On fleet expansion, Al Mamun said airlines should make greater use of aircraft leasing rather than relying entirely on direct purchases.

He said US-Bangla was planning to place aircraft orders worth around $2.5 billion over the next few years. The investment, however, would not come entirely from the airline itself, as aircraft manufacturers and leasing companies would provide financing.

Civil Aviation and Tourism Minister M Rashiduzzaman Millat attended the conclave as chief guest, while State Minister for Foreign Affairs Humaiun Kobir was present as the special guest.

CAAB Chairman Air Vice Marshal Md Mostafa Mahmood Siddiq attended as the guest of honour.

Former CAAB chairman Air Vice Marshal (retd) Mahmud Hossain presented the keynote paper on World-Class Aviation for Bangladesh’s Economic Progress.

Policymakers, aviation experts, diplomats, entrepreneurs and representatives of local and international organisations also attended the event. US-Bangla Airlines was the gold sponsor of the conclave.