Welcome to Business Outlook
Related Articles
Local airlines — Biman, US-Bangla, Novoair and Regent — are on course to losing Tk 350 crore in revenue just this month alone for the coronavirus pandemic, which has forced countries to close borders and brought air travel to a near-halt.
The international route-focused Regent Airways is reeling the most from the crisis: it has temporarily suspended its operation from yesterday.
“This was the hardest decision, but we had no other option as all of our international routes are now shut,” Imran Asif, chief executive officer of the airline, told The Daily Star yesterday.
On Saturday, the airline suspended operations as per a government direction to its last destination: Singapore.
The government has cut air connectivity with 10 countries until March 31 to curb the spread of the novel coronavirus in the country. The countries are: Qatar, Bahrain, Kuwait, Saudi Arabia, the UAE, Turkey, Malaysia, Oman, Singapore and India.
Before the crisis, the Chattogram-based Habib Group-owned airline flew around 51 times on two domestic and five international routes through its four Boeing 737-800.
“We will try to return all of our aircraft to the lessor as soon as possible,” he said, adding that the airline’s loss in revenue would be about Tk 40 crore for March alone.
However, industry insiders said the airline’s loss in revenue would not be more than Tk 30 crore.
The airline’s five international routes are: Kolkata, Kuala Lumpur, Singapore, Muscat and Doha and two domestic routes are Chattogram and Cox’s Bazar.
The airline currently employs about 600 people and it will cut the jobs of about one-third of them.
Some will be sent on pay without leave, while some will be laid off, Asif said, adding that Regent plans to resume normal service after three months.
“This is an extraordinary situation that has taken a huge toll in our business and operations,” Md Mokabbir Hossain, managing director and CEO of Biman Bangladesh Airlines, told The Daily Star.
The flag carrier’s overall losses would be about Tk 250 crore in March.
The two key sources of the airline’s revenue come from ticket sales and ground handling.
“Long-term maintenance of grounded aircraft is huge. We have never faced such a situation before,” Hossain said, adding that Biman, which employs 4,200, is still assessing their losses.
The 18 aircraft-strong carrier was operating 350 flights on 17 routes a week before the outbreak.
Now, the number of weekly international flights decreased to 8 from 218.
“The passengers in local routes also dropped to half. Now, we have to cancel many local flights due to passenger shortage,” he added.
The number of daily domestic flight of US-Bangla Airlines came down to 21 from 29 as of Saturday.
Before the outbreak, the airline, which has a fleet of 13, ran 29 domestic flights to and from: Chattogram, Cox’s Bazar, Jashore, Saidpur, Sylhet, Rajshahi and Barishal and Dhaka every day.
On the international skies, US-Bangla operated about 100 flights a week to and from: Kolkata, Chennai, Singapore, Kuala Lumpur, Bangkok, Guangzhou, Muscat and Doha.
Now, it operates 6 flights a week on just one route: China’s Guangzhou. But that route too will be shut from tomorrow.
Sikder Mezbahuddin Ahmed, chief executive officer of US-Bangla Airlines, demanded waiver of all charges by the Civil Aviation Authority of Bangladesh for the next six months to help the carriers ride out the crisis caused by COVID-19.
“If the government does not extend any assistance amid the crisis, the local airlines’ existence will be endangered,” Ahmed said, while calling for low-interest loans for the airlines.
The airline’s estimated loss in revenue in March would be Tk 35-40 crore, said an official of US-Bangla wishing anonymity.
Another local airline Novoair’s daily flights on domestic routes have come down to 54 from 26. Its only international route — Kolkata — has been shut from the middle of this month, when the Indian government suspended flights from Bangladesh until the middle the April.
Mofizur Rahman, managing director of the airline, estimates the loss in revenue would be about Tk 25-30 crore this month.
Kazi Wahidul Alam, an aviation expert, forecasted that the woes of the local airlines will increase in the near future.
“This deadlock will take a turn for the very worst in the coming months and their losses will go on,” said Alam, also the editor of The Bangladesh Monitor, a premier travel fortnightly.
About 6,000 are directly employed by the four local airlines.
The government should urgently take necessary steps or else many of them would be jobless soon, he added.
The Aviation Operators Association of Bangladesh on Saturday urged the government to waive all aeronautical and non-aeronautical charges levied by CAAB from February until the coronavirus pandemic subsides.
The association also asked the government to totally remove the advanced taxes for the import of aircraft engines and the necessary spare parts and the value-added tax on jet fuel imports for domestic aircraft operators.
M Mafidur Rahman, chairman of CAAB, said the authority will place the demand of the local airlines after evaluating their losses to the aviation ministry and to the finance ministry.
“We would recommend incentives to help sustain the local airlines,” he said, adding that CAAB too is losing Tk 1 crore in revenue a day.
Md Mahbub Ali, state minister for civil aviation and tourism, said on Saturday top officials of local airlines placed some demand and the government will act after getting recommendation from the authorities.
Governments the world over are scrambling to rescue airlines that have been forced to park planes and cut jobs as the lethal, pneumonia-like virus that is spreading like wild fire has put the brakes on all forms of travel.
(TDS)
