How air transport helps Bangladesh’s economy fly

The booming aviation industry is taking the country a step ahead in economic advancement by integrating it into the global economy. 

International flights and the number of passengers travelling to and from Bangladesh nearly doubled from the pre-pandemic level. The total number of international air travellers was nearly 800,000 per month this year (till October), which was below 500,000 in the pre-pandemic year of 2019. 

The number of international flights per month was nearly 3,500 this year, up from nearly 2,200 in 2019. 

Domestic air travel also grew steadily in the last five years with rising income levels. 

Monthly domestic air passenger travel reached 170,000 this year, up from nearly 100,000 in 2019. 

The rising number of air travellers both in the international and domestic market indicates that total passenger traffic will cross 12 million at the end of this year, although airport capacity at present allows handling of 8 million passengers annually. 

However, the third terminal, which is expected to go into full operation next year, will enhance passenger handling capacity to 24 million annually.

More air travel, more growth 

With rising air travel demand, the airline industry also grew remarkably in the last decade. 

For instance, US-Bangla, which started its journey with only eight Dash-8 aircraft in 2013, now has 20 aircraft in its fleet. The airline is planning to further expand its fleet by adding Airbus to its fleet in the next few years, targeting the opening of the third terminal at the Dhaka airport. 

Another private airline, NovoAir, also started its journey in 2013 with only two 50-seat Embraer aircraft, but now has seven planes in its fleet. 

The national carrier Biman now has the biggest and most modern fleet in its history, with 21 aircraft, after adding 10 wide-bodied Boeings in the last decade. 

Biman is now planning to expand its fleet more by adding Airbus planes to its fleet, while other private airlines are planning to enter the market as well. 

The country is also opening up its sky by connecting to more countries through Air Service Agreements (ASAs).

At present Bangladesh has an ASA with 54 countries and 12 more are under process, according to the Ministry of Civil Aviation and Tourism. ASA is an instrument that provides the basis for airlines of the countries involved to provide international air services for passengers, cargo and mail. It is generally executed between two countries, though it can be a multi-party agreement too. 

Such agreements allow more flights to and from a country and help boost the economy through different aeronautical and non-aeronautical revenue for the Civil Aviation Authority, taxes for the government, job opportunities and promotion of trade. 

This kind of exposure of a country to the greater aviation industry ultimately promotes the growth of countries' airlines. For example, a small country like Sri Lanka has ASA with 87 countries. It has an open sky agreement with 14 countries, including Singapore, Malaysia and Thailand.

M Kamrul Islam, executive director of Hazrat Shahjalal International Airport, said, "at present, HSIA has the capacity to serve 8 million passengers annually, whereas the expected annual passenger traffic is projected to rise to 24 million. Cargo handling capacity is anticipated to grow from an annual 285,000 tonnes to an impressive 820,000 tonnes, with an economic growth rate (EIRR) estimated at 15.24%. Thus, the expansion of the existing airport is an imperative move to cater to the surging number of passengers."

Turning Bangladesh into an aviation hub

Aviation stakeholders consider the construction of the much anticipated third terminal at Dhaka airport a major step towards turning Bangladesh into an aviation hub. 

However, airline operators think that there needs to be strategic planning, massive investment and policy support for the country to be an aviation hub and utilise its potential emanating from its geographic location.  

They also stressed the need for reopening the six closed domestic airports that are not in commercial operation due to insufficient infrastructure for takeoff and landing of aeroplanes.

These airfields – located in Ishwardi, Shamshernagar, Thakurgaon, Bogura, Lalmonirhat and Cumilla – were constructed in the British era and saw commercial operations during the Pakistan period.

"You are probably aware that Switzerland is often regarded as a central hub in Europe. In a similar vein, Bangladesh possesses the potential to serve as a strategic hub. With its advantageous geographical location, this country can act as a pivotal transit point for global destinations," shared Air-Vice Marshal M Mafidur Rahman, the Chairman of the Civil Aviation Authority of Bangladesh (CAAB).

"This opportunity resonates with the vision of Bangabandhu, who dreamt of making Bangladesh a prominent hub. Building upon this legacy, our Prime Minister Sheikh Hasina has diligently taken steps towards realising this vision. Consequently, we are witnessing the progress of ambitious projects like the third terminal, which is nearing full-fledged operation," he added.

As an example, he pointed out all South Asian countries can be reached within two hours from Bangladesh. Besides, any country in Asia can be reached in four hours and all European countries in about eight hours. 

Some 13 million of the total 170 million population of Bangladesh resides abroad, while 250,000 foreigners stay in the country. 

These segments can be great sources of air passengers. "Currently, we handle 8 million passengers a year. If we can grab the aforementioned diaspora, we can increase the passenger number to 20 million," claimed the CAAB chairman.

"If Singapore and Dubai, countries with very small populations, can become the aviation hub of the world in five decades, why can't Bangladesh become a regional hub with a population of 170 million and an advantageous geographical position in East, Southeast Asia and South Asia?" 

An airline hub or hub airport is a name given to the airport that airlines use outside their headquarters. The hub is also used as a term that expresses the connectivity of an airport to other airports. And the more space an airport provides access to, the higher the flight frequency is and the greater the hub.

"Hub simply means more air connectivity. And if we can ensure that, the movement of domestic and foreign airlines will increase and we will get a lot of revenue," Squadron Leader ATM Nazrul Islam, an aviation expert, told The Business Standard. 

Prime Minister Sheikh Hasina recently stressed the need for preparing a roadmap aimed at making Bangladesh an aviation hub in the region.

At the first-ever Bangladesh Aviation Summit in March this year, she said the government has undertaken several measures in the last decade, including a number of projects to upgrade airports, airport security and ground handling, to support the development of an aviation hub.

The country is currently implementing various airport development projects, worth around Tk32,605 crore, including the third terminal at Hazrat Shahjalal International Airport.

What do local airlines say?

When asked about the potential impact of the third terminal in establishing Bangladesh as an air hub, Squadron Leader Lutfor Rahman, CEO of US-Bangla Airlines, commented, "if we look at the Middle East, it used to serve as a bridge connecting the East and West. However, the dynamics have changed, and the distance between regions has expanded. Now, we are looking at a global hub; the concept of a regional hub has evolved."

He added, "if we can have favourable tax policies, get efficient customs services, and be offered bonded warehouse provisions for airlines, we will be poised for significant growth. This will enable us to invest in superior equipment and enhance the quality of our services. Under these conditions, Bangladesh is on track to become a prominent hub."

Mofizur Rahman, Secretary General of the Aviation Operators Association of Bangladesh (AOAB) and Managing Director of NovoAir, offered a more cautious perspective, "certainly, Bangladesh holds the potential to become a regional hub. However, our current status in achieving hub status is not entirely favourable, as we lack some essential components."

He emphasised, "infrastructure alone is insufficient to transform us into an aviation hub. We need a skilled workforce, up-to-date aviation-related laws that align with global standards, competitive oil prices, and various other factors — where we currently fall short."