Private airlines barely staying afloat

Despite huge investments, eight passenger and over a dozen cargo airlines have declared bankruptcy in the last 30 years for various issues like uneven competition, high aeronautical and non-aeronautical charges, and high jet fuel rates.

Mofizur Rahman, secretary general of Aviation Operators Association of Bangladesh and managing director of Novoair, said this at the meeting of the parliamentary standing committee on civil aviation ministry today.

In the meeting chaired by Awami League lawmaker RAM Obaidul Muktadir Chowdhury, Civil Aviation Authority of Bangladesh informed that four private airlines -- Novoair, Regent Airways, United Airways, and GMG Airlines -- owe Tk 1,282 crore to CAAB.

Of the four, only Novoair is currently operational.

Mofizur, in a written statement, said private airlines are ceasing to exist due to uneven competition with Biman.

"Private airlines cannot survive due to the government's subsidised aircraft operating policy with many unrestricted privileges. A solution to this unequal competition is urgently needed," he said.

The Novoair MD said Biman has been fixing airfares at lower prices than the actual rate, compelling private airlines to operate flights with low fares as well.

Private airlines will not survive even if Biman survives with huge government subsidies. In this case, determining actual airfare is essential, he added.

Around 40-46 percent of an airline's operating cost is spent on fuel. If jet fuel is bought at a price 30-40 percent higher than international market and private airlines are forced to transport passengers at a low price, they will not survive. So, the price must be aligned with global market, Mofizur also said.

Mofizur claimed if the situation doesn't improve, the existing private airlines will gradually close down.