Despite plans to expand its fleet and international network, Novoair, a private airline in Bangladesh, has been unable to do so due to a global shortage of aircraft available for lease.

Since May last year, the airline has been working to lease three aircraft as part of its plan to expand its international routes to six destinations, according to Novoair Managing Director Mofizur Rahman.

Speaking to The Daily Star at his office in Dhaka yesterday, Rahman explained that the airline has been trying to expand its fleet with narrow-body aircraft.

Novoair celebrated its 12th anniversary yesterday, marking a significant milestone in its operations. Reflecting on the occasion, Rahman discussed the airline's challenges.

"While reaching 12 years of operation is an achievement, we have not yet fulfilled the expectations I had as managing director. Our fleet size and the number of international destinations should have been larger by now," he said. "I take full responsibility for not meeting these goals."

The managing director elaborated on the airline's fleet expansion strategy, stating that their original business plan was to expand the fleet with Airbus A321 aircraft.

"But due to the unavailability of this type, we revised our plan to add Airbus A320s instead. However, we still haven't been able to secure these aircraft for lease," he said.

He continued, "We then considered leasing Boeing 737s, but the global shortage of these aircraft has also hindered our efforts. Despite the challenges, we have continued our search since May last year."

Novoair also explored leasing aircraft through the ACMI (Aircraft, Crew, Maintenance, and Insurance) model, where one airline leases aircraft with a full crew and maintenance to another airline. However, Rahman pointed out the limitations of this approach.

"We realized that ACMI leasing is not commercially viable. Lessors are unwilling to provide aircraft for more than six months, and Civil Aviation Authority regulations also restrict the operation of leased aircraft under the ACMI model for more than six months."

He also noted the difficulties in securing leases due to competition from larger airlines.

"When an aircraft becomes available for lease, major airlines tend to grab it quickly, leaving lessors less willing to lease to smaller airlines," Rahman explained.

Prior to August, lessors were also concerned about Bangladeshi airlines' ability to make payments in foreign currency due to the country's US dollar shortage.

"They raised questions about how we would be able to make payments," Rahman said.

Looking ahead, Rahman estimates that it could take over a year to acquire the necessary aircraft to expand Novoair's fleet.

"Our initial plan is to add three aircraft. We are also working on upgrading our existing ATR 500s to ATR 600s. However, the availability of spare parts for ATR aircraft is a challenge, which impacts the operational efficiency of our existing fleet."

Novoair is also working on expanding its international network, with plans to launch services to six new destinations: Bangkok, Kuala Lumpur, Singapore, Dubai, Sharjah, and Muscat.

Since its inception, Novoair has invested more than $50 million in aircraft acquisition and an additional $10 million in infrastructure and support equipment. Before the COVID-19 pandemic, the airline was on a profitable trajectory. However, the pandemic caused significant losses, and ongoing price escalations due to the Russia-Ukraine war have continued to affect profitability. Additionally, the shrinking domestic market and reduced demand have compounded the challenges.

Novoair remains committed to investing between $25 million and $30 million in its expansion in the coming years.

"Our business philosophy prioritizes on-time flight operations and passenger safety above all else," Rahman said. "Novoair is dedicated to providing safe, timely, and high-quality service to its passengers."

Currently, Novoair operates daily domestic flights connecting Dhaka to Chattogram, Cox's Bazar, Sylhet, Jashore, Saidpur, and Rajshahi. While international flights to Kolkata are temporarily suspended, the airline plans to resume them soon.

Since launching its operations on January 9, 2013, with flights between Dhaka and Chattogram, Novoair has completed over 100,000 flights and served more than 7.5 million passengers.

The airline has received several accolades, including the titles of Best Domestic Airline in 2014 and 2019, and Best On-time Performance Airline in 2022 and 2023, awarded by The Bangladesh Monitor.