Inside Airbus's mega plan to develop the aviation ecosystem in Bangladesh

Infographic: TBS

While local air operators struggle to recruit aviators, the European aircraft manufacturer Airbus has come up with a mega plan to develop the local aviation ecosystem. They will set up an ab initio school for the first time in Bangladesh to produce commercial pilots and mechanics, saving foreign currency for the country in the process,  as air operators at present train pilots abroad. 

Ab initio refers to airline career pilot programmes that take in students with very little or no flight experience and create competent, professional airline pilots by providing ATPL (Airline Transport Pilot License) in 18 months. 

Airbus has already signed an agreement with Bangabandhu Sheikh Mujibur Rahman Aviation and Aerospace University (BSMRAAU) to set up the school in Lalmonirhat in the northern part of Bangladesh. 

Infographic: TBS

The French aerospace company has been working in this regard for the last two years, pursuing the government to allocate land to build the infrastructure and finally, they brought up the issue in the recently signed MoU (memorandum of understanding) titled 'Aviation Trade and Investment Partnership' between the Bangladesh government and the UK government. 

On 5 May during the prime minister's visit, the MoU was signed in London over purchasing 10 wide-body aircraft, including two cargo and eight passenger planes, where Airbus offered a long term plan for developing aviation infrastructure. 

The aerospace company came up with a comprehensive package which includes supporting aviation focused higher education institutions, promoting cooperation in air traffic management and airport operations to improve air traffic services, delivering Airbus capacity to build initiatives to enhance skills of civil aviation personnel and tackling environmental challenges, including reduction of aviation emissions. 

According to the signed agreement, Airbus will provide strategic advice and marketing services to Biman Bangladesh Airlines to assist in its operations. At the same time, the aerospace company will build a fleet plan up to 2030, such as how Biman can maximise the utilisation of aircraft, which routes they should go for expansion to generate more revenue, marketing plan etc.  

As the deal was signed between two governments, there is no option of a third party receiving commission, and it will reinforce Bangladesh's bilateral trade with Germany, France, Spain and the UK, which are shareholder countries of Airbus, said a senior executive of the aerospace company.  

"The trade and aviation partnership is not only limited to aircraft, but also to the development of the local aviation industry, to upskill human capital and to support Biman in its ambition to become a top airline," he said. 

"It is a win - win partnership to boost an industry, which has been slowed down by the monopoly of Boeing," he added.

At present, the UK and the European Union altogether account for 60% of Bangladesh's total exports. 

The signed MoU also includes a clause on exploring the potential for further development of trade, business and tourism between the UK and Bangladesh. Airbus will also support the holding of an annual aviation summit in Bangladesh as per the MoU. 

The Civil Aviation and Tourism Ministry, in collaboration with the UK and France, organised the 'Bangladesh Aviation Summit-2023' for the first time in Dhaka in March this year. 

In the summit Prime Minister Sheikh Hasina said Bangladesh should formulate a roadmap considering its geo-strategic advantage, to make the country an aviation hub.

"Reaping the dividend of our geo-strategic advantage, we should create a roadmap as to how we can make our country an aviation hub," she said in a video statement aired during the inaugural session of the aviation summit.

The prime minister also described the summit as very significant for Bangladesh.

The summit will help the Bangladesh government and air operators understand the real opportunities in the aviation business to make the country an aviation hub, the Airbus executive told The Business Standard when sharing their interest to enter the Bangladesh market.

Referring to International Air Transport Association (IATA) data, he said that Bangladesh's aviation industry has only a 0.3% contribution to the GDP, when the average contribution of other developing countries is 4%. 

When contacted, European Union (EU) Ambassador to Bangladesh Charles Whiteley told The Business Standard that "the confirmation by the Bangladesh authorities of the purchase of 10 Airbus aircraft illustrates the positive trajectory of trade and investment relations between Bangladesh and the EU and the UK."

"Airbus is taking an innovative and comprehensive approach to support the development of Bangladesh's aviation 'ecosystem', at an important moment when there is much potential in the aviation sector. This could  include pilot training, logistics and organisational expertise," he said. 

"The EU is exploring ways to support this innovative approach. Our Global Gateway programme is prioritising support to infrastructure and connectivity. Bangladesh is a priority partner country for Global Gateway engagement," he added. 

"Airbus stands ready to support the expansion of Bangladesh's civil aviation sector, for passenger and freighter operations, which will be a key driver of the country's accelerated economic growth," said Remi Maillard, president, Airbus South Asia. 

"Airbus is aligned with Bangladesh's Vision 2041 and is ready to contribute to develop a local aerospace ecosystem that will give wings to the 2041 ambition. The vision of 2041 will draw further investments into the country from various parts of the globe that will propel the need to grow long-haul passenger and cargo operations," he added.

Director of Trade and Investment at British High Commission, Dhaka, Dan Pasha, said, "The signing of the Aviation Trade and Investment Partnership demonstrates the UK's commitment to strengthening Bangladesh's aviation industry, helping to create jobs in both countries, driving economic growth and boosting bilateral trade. We support Bangladesh in their objective of becoming the next aviation hub in South Asia, helping to continue to boost economic growth." 

How Airbus entrance will develop aviation industry 

Amid an industry-wide severe crisis of pilots, the largest private airlines US-Bangla sent a group of students to the USA, to train them as first officers, at their own cost. Under this programme, the airlines will require to spend at least $65,000 per head. They aim to train more than 20 pilots under this initiative, as the carrier is going to expand its fleet. 

Though the demand for pilots is rising amid the entrance of new air operators and fleet expansion of existing operators, there is no pipeline for pilot production in the country. It is because only one academy - the Galaxy Flying Academy - is in operations and that too, with poor capacity. 

The country's national carrier is also running at a 50% shortage of pilots, forcing it to operate its modern fleet in short of utilisation capacity and causing revenue loss. 

Biman is not getting adequate applications even after advertising jobs for pilots, according to the carrier. 

It is in this situation that Airbus is planning to enter Bangladesh, to develop the aviation infrastructure and ecosystem by training pilots, mechanics, and engineers. 

When contacted, CEO Captain Lutfor Rahman said that the entry of Airbus is good news for Bangladesh's aviation industry as they are not only selling aircraft, but also developing the infrastructure. 

Citing the pilot demand of the industry, he said US-Bangla alone needs at least 30 pilots in a year and if the entire industry is included, the demand is 60. If Airbus sets up the school, it will help the industry meet the demand and reduce pilot training cost. 

He said US-Bangla is also adding two wide body A330-300 aircraft by August this year. Another narrow body ATR will be added by the end of year. As a result, the number of the fleet will stand at 21 by this year. The carrier will also take four Airbus next year taking the number to 25, the biggest fleet in Bangladesh, when currently Biman has 21 aircraft. 

This is the first time US-Bangla is going to add an Airbus plane to its fleet, he said. Currently, it has seven Boeing in its fleet, he added. 

He said Airbus is providing them training for pilot, cabin crew and engineers at their own cost. So, adding Airbus to their fleet will not add extra cost for them, he added. 

He said though Bangladesh aviation industry has been dominated by Boeing in the last three decades, they did not develop any training facility or ecosystem for the industry.    

If Airbus adds simulator training to their school, it will be more helpful, as there is none in the country. As a result, operators have to send existing pilots abroad to take the training, he added. 

The potential of the passenger and cargo market for Bangladesh

The Air Travel Market in Bangladesh is approximately between $600 million to $700 million for passengers, with average growth of 8% to 10% per annum, according to IATA statistics. 

IATA forecasts air transport in Bangladesh will grow by 168% in the next 20 years under the "current trends" scenario. This would result in an additional 12.1 million to 30 million passenger departures by 2038.

If met, this increased demand would support approximately $2.1 billion to $3.2 billion of GDP and around 140,000 to 222,000 jobs.

According to Airbus global projection presented at the aviation summit in March, both the passenger market and air cargo market from Bangladesh will continue to grow near the top of the world for the next 20 years. 

The passenger market will grow at 6% while the air cargo market will grow at 8% per year, or triple the world average. The growth is driven by Bangladesh's GDP growth and increasing openness of its economy. 

Developing a dedicated national cargo operation coupled with increasing Biman's passenger fleet will be vital in boosting the country's GDP and gaining the status of the high income country as per the national strategic plan, Vision 2041, according to the Airbus presentation. 

On the passenger side, Asia-Pacific and the Middle East will lead growth in the international sector with passengers set to increase over 300% and 230% respectively by 2041. 

Europe and North America both pose excellent opportunities to grow Biman's network and service, as each market forecasts to grow passenger traffic by over 150% in the next two decades. 

Air freight cargo traffic from Bangladesh is forecasted to continue to grow at a staggering rate for the next 20 years from 400,000 tonnes in 2019 to 1.1 million tonnes by 2041, according to the Airbus presentation. 

To accommodate the pressure of air travellers, especially in the Asia Pacific region, the third terminal of Hazrat Shahjalal International Airport is getting into shape and by 2023, it is expected to be functional, and three operational international airports, including one in Cox's Bazar, will join the list soon.