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Private airlines struggle to keep afloat PDF Print E-mail
Friday, 18 July 2008

The aviation industry has fallen in trouble with private airlines finding it hard to cope with the spiralling prices of fuel, reports bdnews24.com

Fuel price hikes have forced some airlines to stop operations on some routes, officials said.
 
M Haider Uzzaman, chairman of Best Air and convener of the Airlines Association of Bangladesh, told bdnews24.com: "We are in trouble as fuel prices keep going up. In the last three to four months, fuel prices have doubled. But we have not increased airfare in that proportion."
 
Zilani SR Chowdhury, director (marketing and sales) of the United Airways Bangladesh, said: "We are still operating flights despite huge losses. It is uncertain whether we will be able to continue on all routes in the next one month."
 
He said the private airlines would carry 70 percent of the total five lakh passengers travelling the domestic routes.
 
Several thousand people are employed in a sector with about Tk 1,000 crore in investment.
 
The prices of jet fuel rose to Tk 95 in July from Tk 54 per litre in the same period a year ago.
 
The country's first private airlines, GMG Airlines, stopped operating flights to four international destinations—Kathmandu, New Delhi, Dubai and Bangkok—out of six international routes in the last 20 days.
 
It now operates flights to only two international destinations—Kolkata and Kuala Lumpur.
 
GMG Airline's director (public relations and human resources), ATM Nazrul Islam, said that the 'strategic decision' to dwindle operation was taken due to fuel price hike.
 
Best Air has stopped operation on the Dhaka-Chittagong route, the only domestic route it had operated.
 
The chairman of the airline, Haider Uzzaman, said: "As we hiked fares to Tk 5,495 from Tk 4,995 (on Dhaka-Chittagong route), the number of passengers dropped. Finally, we had to stop operations on the route as we could not cope with the expenses."
 
Best Air now operates three flights a week from Dhaka to Bangkok. Airfare on the route has been increased to $260 from $199, plus VAT and other taxes.
 
The United Airlines started operation on July 10 last year. It operates flights on Dhaka-Chittagong, Dhaka-Sylhet, Dhaka-Cox's Bazar and Dhaka-Jessore routes.
 
The airline's officials said that the number of passengers had dropped sharply since it hiked fares on June 3.
 
GMG's ATM Nazrul Islam told bdnews24.com that the number of passengers dropped after airfare had been hiked.
 
Haider Uzzaman sought government help to help the sector survive.
 
He suggested that import duty on jet fuel be withdrawn to reduce fuel price by 25 percent. "The sector would grow further we could run it for one year."
 
He proposed that the government leave the matter of fuel import to aircraft owners. "It will also cut costs a bit."

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