Local airlines lose flyers due to coronavirus

The plan for Bangladeshi airlines to expand to international routes with new aircraft has hit a brick wall due to the coronavirus outbreak, which has slashed outbound passenger growth by 40 percent in recent weeks.

Even worse, this sharp fall in passenger growth comes at the busiest period of the year when air travel for both business and tourism is usually high. 

Cargo imports also fell by more than 60 percent as raw material import remain suspended in China – one of the largest business hubs for Bangladesh – according to airlines industry insiders. 

Since airfreight demand has been weakening worldwide, the outbreak of coronavirus will further add woes if the crisis prolongs, industry insiders feared. 

Asia-Pacific carriers posted a 3.5 percent decrease in demand for airfreight last year compared to a 2.8 percent increase in 2018, according to the International Air Transport Association (IATA).

Biman Bangladesh Airlines has already begun to feel the pinch of a global slowdown as the fall in export-import growth has hit its cargo business, with revenue from goods transportation falling by 32 percent in the first four months of the current fiscal year.

"The national carrier will have to bear more costs at the end of this year if the impact of coronavirus prolongs," said Md Mokabbir Hossain, managing director Biman Bangladesh Airlines.

Biman was planning to open new routes to Guangzhou by March but the process was delayed due to the outbreak, he added. 

Mokabbir said the Biman office in Guangzhou is ready but the inspection scheduled by the Chinese authority on February 12 was suspended. 

"Moreover, outbound passengers to Singapore, Bangkok and Kuala Lumpur have dropped by more than 40 percent as tourists are avoiding travel over health concerns," he further said. 

However, Biman did not take any decision to cut flights as inbound flights are still full, he added. 

The coronavirus outbreak has also forced airlines operating in Bangladesh to backtrack from their flight expansion plans centering on the construction of the third terminal of the Dhaka airport.

For instance, US-Bangla Airlines – the only local airline company operating flights to China – moved to cut flight frequency to Guangzhou from five to only three-four per week.

"US-Bangla decided to reduce flights in China as number of both inbound and outbound passengers declined substantially, causing losses," said US-Bangla CEO Sikder Mezbahuddin Ahmed.

Passenger growth also fell by 20 percent in other tourist destinations such as Bangkok and Bali.

"Vietnam is emerging as a tourist destination and business activities as well in recent times, but passenger travel in this route has also declined since it goes via Bangkok," he added. 

Mezbahuddin said that although the country's airline operators were doing well amid fast growth of the aviation industry, the sudden break brought by coronavirus will hurt the industry, which will eventually negatively impact the overall economy. 

Singapore Airlines, which grew at over 10 percent last year in the Bangladeshi market despite a global slowdown, also cut its flights in China. 

"We have flights in around 26 destinations in China and some flights were suspended due to the coronavirus outbreak," said Rifat Kader, head of Sales and Marketing of Singapore Airlines.

However, there has not been much impact in other routes yet, he added. 

Regent Airways, which operates flights in Kuala Lumpur and Singapore, also experienced a 15 percent fall in outbound passenger growth in the last one week.

"Passengers are cancelling their ticket bookings due to safety concerns," said Hanif Zakaria, chief commercial officer of Regent.

Though, outbound passenger growth has dropped, number of inbound passengers remains high as people consider Bangladesh safer since no cases of coronavirus have been reported yet, he added.

"Currently, we have three weekly flights in these international routes and we may cut flights if the crisis prolongs," he said.

The crisis hit the aviation industry at a time when international air passenger traffic has been slowing down in the global market. 

In 2019, international passenger traffic in the global market climbed 4.1 percent compared to a 7.1 percent growth in 2018, according to IATA. 

However, Bangladesh's fast growing economy, international business connections and tourism sector spared the local aviation industry from the global slowdown.

The IATA forecasts the air transport in Bangladesh to annually grow at 8.4 percent until 2038 if the current trend continues. In 2018, air passenger flow in the country was 7.2 million, which will increase to 19.3 million by 2038.

Expecting future growth, airlines in the country are expanding their fleets.

For instance, Biman's fleet has increased manifold over the years, and with 16 aircraft – 10 of which are its own and the rest are on lease – its current fleet size is the largest in its history. 

Two more 787-9 aircraft will be added to Biman's fleet this month, and another two Dash-8 will arrive by June next year, raising the total fleet size to 20.

Other local private airlines are also expanding their fleets by adding new aircraft.