Running an airline is more than just a business; it serves as a reflection of a nation as its national carrier. In recent years, Bangladesh has witnessed significant growth in air travel, exports, and per capita income, which now stands at around $3,000. A considerable portion of this air traffic comes from non-resident Bangladeshi passengers. Several well-known international airlines operate successfully in Bangladesh, with some offering multiple daily flights in addition to cargo services.
The aviation industry is highly specialized, risky, intricate, and fiercely competitive on a global scale. It requires substantial capital investment and faces various external factors such as fluctuating fuel prices and airport fees in different countries, which are beyond the control of airlines. Many airlines worldwide operate at a loss, and private operators frequently face bankruptcy. Some airlines rely on government subsidies as air services play a crucial role in economic development. Different strategies are needed for passenger and cargo operations, with emphasis on maintaining a strong reputation and operational efficiency to attract customers.
Despite its geographical and strategic advantages, Bangladesh misses out on significant business opportunities due to its weaknesses. By leveraging its position, Bangladesh has the potential to become an aviation hub similar to Singapore, Dubai, and Turkey, thereby generating additional revenue.
Conducting a feasibility study and developing a practical business plan are essential steps for any business, including airlines. The size of the fleet plays a critical role in an airline’s sustainability, with around 20% to 25% of aircraft typically out of service for maintenance. Fixed costs, including overhead expenses, remain constant, making it crucial to carefully determine the number, capacity, and quality of aircraft. A sizable fleet is necessary to minimize operational disruptions and effectively manage crises to maintain passenger confidence and the airline’s reputation.
The selection of aircraft, particularly in terms of capacity and category, is equally significant. It should align with country-specific requirements such as routes, passenger demographics, demand, and available funding. Risks associated with aircraft operations must be thoroughly evaluated and mitigated. Contractual terms, including post-delivery services, should be scrutinized to ensure smooth aircraft operations throughout their estimated useful lifespan.
Securing financing under a well-structured business plan is fundamental, especially for a country facing challenges in financial management, funding, and foreign loan repayment.
Addressing public concerns and frustrations is crucial. Bangladesh has experienced instances of significant financial mismanagement in public procurement, particularly in large-scale projects under previous administrations. Transparency, accountability, and compliance with public procurement rules are essential to prevent corruption and ensure proper governance.
It is evident that Bangladesh needs to acquire more aircraft to expand Biman’s fleet. However, this must be accompanied by thorough due diligence, a sound feasibility study, a realistic business plan, technical assessments, risk evaluations, appropriate funding aligned with remittances and local resources, strategic marketing, good governance, and competent management.
Enhancing airport infrastructure, streamlining immigration procedures, facilitating swift passenger and baggage transfers, offering spacious lounges for all classes, expanding dining options and duty-free shopping, and ensuring effective overall management are prerequisites for positioning Bangladesh as a leading aviation hub in South Asia. Implementing these measures could propel the country into a new aviation era and help achieve its ambitions.
The author is a senior partner at Hoda Vasi Chowdhury & Co and a former president of ICAB
