The aviation regulator should take immediate steps to free up unused traffic rights held up by some local airlines for the sake of the sector's growth, the Novoair chief said.
Some local airlines, including a suspended one, are now holding traffic rights on different regional routes, even though they are not operating any flights on them.
“This is holding back Novoair from launching flights on international routes. We are ready to launch flights on regional routes, but we cannot do so in absence of traffic rights,” Mofizur Rahman, managing director of the airline, told The Daily Star in an interview recently.
A bilateral air service agreement or air traffic right is one whereby the two nations allow their respective airlines to launch flights into each other's territory.
Bilateral rights are national assets and are agreed upon between two countries, not for the sake of enhancing transport alone but also to further diplomatic ties. Subsequently, he urged the Civil Aviation Authority of Bangladesh to urgently look into the matter.
Novoair, which has been operating flights on the domestic route since January last year, is looking to initially operate on three international routes: Dhaka-Kolkata, Dhaka-Yangon and Dhaka-Kathmandu.
The traffic rights problem is also holding Rahman back from putting in more funds. “We want to invest in wide-body aircraft after launching international flights,” he said, adding that Novoair has so far invested around $25 million.
Rahman said the domestic airline industry is facing severe challenges due to high operating costs and new entrants. Increased competition may jeopardise the sector, he said, while ruling out the possibility of consolidation in the sector. “Airlines may sell off their business but they won't go for mergers.”
At present, Novoair is using 38 percent of its capacity; it is running six flights a day against the capacity of 16. It recently added another Embraer jet, to take its fleet size to three.
“We can double our operations with the same operating costs,” he said, adding that the airline is running on break-even now.
Around 70 percent seat occupancy is needed to reach break-even on the Dhaka-Chittagong route and 80 percent for Dhaka-Sylhet, he said.
The airline currently operates regular flights from Dhaka to Chittagong, Cox's Bazar, Sylhet and Jessore.
At present, 40,000-50,000 passengers fly on the domestic route per month, with the Dhaka-Chittagong route accounting for 70 percent of the foot count, Rahman said.
Novoair, which maintains an on-time departure rate of 90 percent, carried around 1.5 lakh passengers last year. Its passenger count this year until August stands upwards of 1 lakh, said the official.
The airline recently launched a frequent flyer programme called 'Smiles', the first of its kind by any private airline in Bangladesh.
Rahman also urged the government to simplify the tax collection process in air ticket fare.
The airline, which employs around 375, has nine sales centres across Bangladesh and partnerships with around 200 travel agencies, from whom more than 60 percent of its sales come.
Novoair belongs to a family of diversified business enterprises. Its sister concerns include Novotel, NovoHolidays and NovoCom.
In 2013, some 6.48 lakh passengers travelled nationally by air, up 10 percent year-on-year, according to data from Caab.