Airlines in BD struggling to survive due to poor load factor

- A Monitor Desk Report 06 Jul, 2020 | 777 Views|-+
Dhaka: After almost a three-month long suspension following the coronavirus outbreak, Bangladesh partly resumed scheduled passenger flight operations, both domestic, from June 1, and international, from June 16. However, due to continuous surge in the country's virus cases and quarantine measures or travel ban imposed in destination countries, passengers are still reluctant to travel.

Therefore, the aviation industry is yet to gain necessary momentum to survive this coronavirus crisis.

International routes

After resuming international flights, Biman Bangladesh Airlines operated its first international scheduled passenger flight to London on June 21 with 70 per cent occupancy.

But the return flight only had 23 passengers, a load factor of less than 30 per cent, causing a loss of over BDT 10 lac from its first international flight since the flight suspension from May 17 because of the pandemic.

The flight from Dhaka was full as most of the passengers had purchased their tickets prior to the suspension of flight operations and were rescheduled.

Therefore, the lack of passengers is widening the operational losses of the carrier.

Revenue losses of Biman stood at around BDT 400 crore until March, and almost quadrupled to BDT 1,527 crore in May, the airline said.

As a result, Biman has been charging a higher price than usual for the London route.

About the low passenger turnout, Md Mokabbir Hossain, Managing Director and CEO, Biman, said, "The aviation industry had started to move slowly, but quarantine measures in destination countries have discouraged passengers from travelling."

"As a result, we are operating flights at a loss. We do not know how long we can continue," Hossain added.

Till now, Biman is operating only on the London route with one weekly flight. The carrier earlier announced to resume scheduled flights to Dubai from July 6 and Abu Dhabi from July 7.

However, due to "unavoidable reasons", the national airline decided not to go through with it.

Another airline of Bangladesh US-Bangla is operating one weekly flight from Dhaka to Guangzhou, China.

The carrier currently is having a load factor of 100 per cent on the departure flight. But on the return flight, the number remains poor -- only 20 per cent, said Kamrul Islam, General Manager, Public Relations, US-Bangla.

Among the foreign airlines, Qatar Airways and Emirates are operating flight services to and from Dhaka while Turkish Airlines announced to start from tomorrow.

Moreover, Air Arabia and Malindo Air have already received approval from the Civil Aviation Authority of Bangladesh to resume flights to and from Dhaka while some other foreign airlines await CAAB's permit.

Nevertheless, passenger demand in international routes is still very poor for airlines.

The industry body International Air Transport Association (IATA) said in a recent study that passenger demand in May dropped 91.3 per cent compared to the same month last year.

"Bangladesh is the only country to have reopened scheduled flights on the international routes when infection rates are high," said Air Vice Marshal M Mofidur Rahman, Chairman, Civil Aviation Authority of Bangladesh.

While a COVID-19 negative certificate is mandatory to enter Bangladesh, other countries have even more restrictive measures such as 14-day self-quarantine, he added.

Furthermore, even the countries who are gradually easing travel restrictions for inbound travellers, they are not allowing Bangladeshis to arrive yet because of its rising coronavirus cases.

For example, on June 27, EU posted a list of 54 countries eligible for Schengen visa which didn't include Bangladesh. Meaning, no new applicant from the country is eligible for Schengen visa until further notice.

Japan and South Korea recently limited the entry of foreigners from some countries where COVID-19 infections are surging, including Bangladesh and Pakistan.

Also, Turkish Airlines was supposed to resume flights to and from Dhaka from July 3, however, it had to postpone after the Turkish government decided not to allow flights from countries with high infection rate.

At the moment, China is not allowing any foreign nationals to enter after witnessing a second wave of COVID-19 outbreak in the country.

Similarly, India has still not resumed international flights.

Thailand has recently lifted the travel ban on foreign visitors, but is only allowing some groups of foreigners to arrive in the country, such as business travellers, diplomats and government guests staying less than 14 days, even though it has been over five weeks with no recorded community virus transmission.

Domestic routes

In the domestic sector, after the travel ban was lifted on June 1, Biman Bangladesh Airlines was able to operate flights for just one day before suspending all subsequent flights following poor passenger turnout.

The cash-strapped flag carrier resumed operations after receiving a loan of BDT 1,000 crore in May from Sonali Bank under the BDT 30,000 crore stimulus package the government offered to help industries survive the economic crisis following the COVID-19 pandemic.

On the other hand, the largest private carrier of Bangladesh US-Bangla Airlines has been operating flights with a 60 per cent load factor, said Kamrul Islam, General Manager, Public Relations, US-Bangla Airlines.

Kamrul Islam further mentioned that US-Bangla has been incurring a revenue loss of BDT 100 crore per month since the pandemic.

Then, NOVOAIR, the only remaining carrier operating flights on domestic routes, is currently witnessing a 30-40 per cent load factor, said a spokesperson for the airline.

Despite losses, all three of the carriers are continuing operations to encourage air travellers to start flying again, offering tickets at low prices, minimum BDT 2,500, to bring in passengers.

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