Aviation nosedives on corona fallout

The worldwide travel ban amid the coronavirus outbreak has directly hit the country's airline businesses, putting operators under extreme financial pressure. 

The disruption in air connectivity has tripped up other sectors such as tourism, labour market, readymade garments and job market under a chain reaction effect. 

Local airline operators are now considering asking the government to reduce airport charges. 

The Biman Bangladesh Airlines has made a loss of Tk300 crore since the virus outbreak as it had to cut 70 percent of flights around the globe owing to travel bans and a fall in passenger growth. 

Out of 218 flights on international routes, Biman has cut more than 150 flights so far. 

The coronavirus fear also hurt businesses in local routes, compelling Biman to cut domestic flights. 

Biman on Saturday slashed flight frequencies in Jashore, Rajshahi and Saidpur routes.

With coronavirus continuing its onslaught, Biman had to retreat from its route expansion plan. It is now planning to cutting down costs by reducing business.

The national carrier has postponed its decision to begin flight operations to Guangzhou and Chennai, slated for March this year.

Biman also backtracked from its plan to expand its wings to two new routes – Sharjah of UAE and Bahrain. With six new Dreamliners in its fleet, Biman was planning to increase flight frequencies to India and Middle Eastern countries, but coronavirus has now forced Biman to put those plans on the backburner.

Biman is now limiting its businesses by cutting various costs instead of expansion, said Md Mokabbir Hossain, managing director of Biman.

The drastic cut in flights in both domestic and international routes put severe pressure on the cash flow of the company, he said. 

If the situation lingers, it will be difficult to continue even loan payment for the airlines, he added.

Biman will need the government's support to reduce charges on airlines' operations and loan rescheduling facility, considering the current disaster, he added. 

US-Bangla, the largest private local airline, has cut more than 60 percent of flights on international routes. The slash in flight frequencies caused it to suffer a loss of Tk25 crore to Tk30 crore on an average in the last two months, according to the company. 

The airline put on hold its route expansion plan to Delhi and Chennai. 

Instead, the carrier slashed its international routes to four from the existing eight. 

Domestic routes affected 

Not on international routes only, the business also decreased significantly on domestic routes because of a fall in passenger growth. 

The number of passengers fell by 25 to 30 percent on domestic routes after the virus outbreak as people are avoiding mass gatherings and travelling out of fear, said Sikder Mezbahuddin Ahmed, an adviser to US-Bangla.

He said the airlines are now going for cost-cutting measures to survive. 

Although, US-Bangla has not yet gone for job cut, if the situation does not improve soon, it will have to do that, he added. 

The carrier is now limiting its other expenses and stopping capital investment in an effort to handle the current situation, he added. 

Airline companies need support from government banks reducing the interest rate of running capital to let them overcome the losses, the adviser to US-Bangla said. 

The grounding of flights caused immense sufferings for overseas workers, posing a severe effect on remittance inflow which was on a downward spiral in the first two months of the current year. 

The manpower export has been declining for the global financial crisis, and a fall in oil price and the outbreak of coronavirus worsened it. 

Biman, which carries 40 percent of total passengers to Middle Eastern countries on employment visa, suspended flights to Kuwait and Qatar. The number of flights in other routes of the Gulf region, the hub of the labour market for Bangladesh, has also been slashed drastically.

Middle Eastern countries account for more than 65 percent of total remittance inflow to Bangladesh. 

Emirates, one of the world's biggest international airlines, has suspended all of its flights to Italy from March 15 in response to the virus outbreak across the globe. 

As a result, many expatriate workers could not go to their destination countries following flight suspensions from Bangladesh.

Manpower recruiting agencies are also worried about their business as only a few countries are allowing Bangladeshis to enter. 

"Some 130 workers are scheduled to go to Kuwait through my recruiting agency within the next one month. Their journeys have become uncertain after the Kuwait authorities imposed the ban," said Kamal Sikder, managing partner of SB International.

"Around 1,000 workers who have come to Bangladesh on vacation are waiting to return to Kuwait. But now they are uncertain about their timely arrival at the destination country," he added.

Travel bans in different countries hit the tourism industry as travel agencies are not getting travellers. 

Explaining his predicament, Sabbir Ahmed, proprietor of Cosmos Holidays, said they were not getting a single tour package order now. They are receiving only ticket orders for emergency business meetings. 

He said his travel agency has 55 employees and their monthly expenses are above Tk30 lakh. But earnings came down to around Tk7 lakh. 

If the situation continues two more months, he will have to shut down his business, he added. 

Aviation and tourism are among the sectors most affected by the coronavirus outbreak, said Dr Khondaker Golam Moazzem, research director at the Centre for Policy Dialogue.

He said the government should estimate sector-wise losses to provide the necessary support. 

The government should seek financial support from international donor agencies which built funds for coronavirus-affected countries, he added. 

The International Air Transport Association (IATA), in a press release issued on Sunday, said the coronavirus impact would create enormous cash-flow pressures for airlines.

It said airlines would need emergency measures to get through this crisis. 

The governments should be looking at all possible means to assist the industry through these extreme circumstances. 

Extending lines of credit, reducing infrastructure costs, lightening the tax burden are all measures that governments will need to explore, said the press release.