Low-cost airlines may get govt nod

An inter-ministerial committee strongly recommends that the government allow low-cost airliners from Dhaka to save huge foreign exchange and earn huge revenue from aviation and other sectors.
The committee after several meetings concludes that the countries signing bilateral air service agreement (BASA) with Bangladesh should be allowed to operate low-cost carriers from Dhaka subject to at least three weekly flights from Chittagong.
Representatives from the ministries of civil aviation and tourism, foreign affairs, home, expatriate's welfare and overseas employment, Civil Aviation Authorities of Bangladesh (CAAB), Biman Bangladesh Airlines Ltd and GMG Airlines comprise the committee headed by Civil Aviation Ministry Joint Secretary Fakhrul Islam.
The apprehension is incorrect that allowing such carriers will create an imbalance in airfares between the legacy and low-cost airlines, says the committee report.
"Because in the free market economy the government should ensure competitive business environment and consumers' interests so they have chances to choose on the basis of their purchase capacity," it explains.
The committee has however recommended allowing operation of only one low-cost or budget airline from each country.
"On the basis of the airline's performance in operation from Chittagong, it'll be allowed to operate five to seven weekly flights from Dhaka," an official commented.
He said the committee put the condition of operating three low-cost flights first from Shah Amanat International Airport, Chittagong to make more use of the airport's facilities.
Aviation experts welcome the recommendations saying Biman and other legacy airlines had been opposing favouring the budget airlines to protect their own interests.
Operation of budget airlines will enhance service standard and help reduce airfares that were increased by airlines due to passenger pressure, they observe.
Considering transport of only 10 percent passengers on Dhaka-Dubai and Dhaka-Kuala Lumpur routes in weekly 12 flights of two low-cost airlines, the government may earn extra around Tk 20 crore from aeronautical, non-aeronautical and ground handling sectors, the report says.
On the other hand, taking into account $100 lower airfare for each passenger on these two routes, the country would annually save around Tk 44 crore in foreign currency, it adds.
"Calculation of Dhaka to Thailand, Singapore, Hong Kong, Oman, Qatar, Saudi Arabia, and Bahrain routes will surely increase the government's revenue income and save huge foreign currency," an official of the civil aviation ministry told The Daily Star.
Besides, the government will also earn revenue from the airlines' usages of airport's offices and lounge, he noted.
The feasibility report submitted to Civil Aviation and Tourism Secretary Syed Mohammad Jobaer on Tuesday says: "The low cost carriers will play a very significant role to carry Bangladeshi passengers of low income groups who travel to various destinations for jobs."
Besides tourists, over 6.5 lakh Bangladeshi jobseekers flew to different countries, especially to Malaysia and the Middle East in 2007.
Low-cost airlines are able to offer airfares lower by $100 to $150 than that of the legacy carriers. This is because of using same category aircraft and crew, low maintenance and fuel cost, short-haul flights, curtailment of onboard services like food and beverage, restrictions on baggage weight, online booking system and non-refundable tickets. The services onboard are however available on demand.
Currently Air Asia, Air India, Express, Air Arabia and Jazeera Airways of Kuwait are pursuing the government for operating low-cost carriers from Zia International Airport (ZIA).
Air Arabia is already operating such flights from Shah Amanat International Airport.
Bangladesh has bilateral air service agreement with 44 countries, but only 19 airlines from 15 nations operate flights from Bangladesh.
ZIA has the capacity of handling yearly 85 lakh passengers, but according to an analysis on last five years' traffic, it handled only 32 lakh passengers, meaning that the airport can accommodate many more airlines, an official said.