Why it is important to establish an aviation hub in Bangladesh

Bangladesh is regarded as a highly predictable aviation market, supported by robust historical data and well-established economic and demographic factors that indicate significant potential for future growth. 

With its central position in South Asia, proximity to Southeast Asia, and a population of around 170 million, this country is well-positioned to become an aviation hub. 

Moreover, nearly 10 million Bangladeshis are living abroad. Aviation experts and analysts and major players like Boeing and the International Air Transport Association (IATA) forecast that our growth will be robust and sustained. 

Boeing is forecasting air travel in Bangladesh to double in the next decade, driven by the country's growing population and expanding economy. 

Through 2032, Bangladesh is expected to achieve an annual economic growth rate of more than 5% and air-traffic growth at nearly 8.5% per year (statistics presented by Boeing). 

In fact, prior to the COVID-19 pandemic, our GDP growth and air-traffic growth were almost at par, both following a sharply rising trend reaching annual rates of up to 8.13% for GDP and 8–9% for average passenger growth.

This massive passenger growth, supported by economic progress, dictated the urgent augmentation of airport operation capacity. Due to the tremendous shortfall in accommodating more aircraft and passengers, projects were undertaken to fulfil routine and forecasted operational demands. 

The new Terminal 3 at Hazrat Shahjalal International Airport is designed with limited hub capabilities and is intended to accommodate 12 to 14 million passengers, addressing the current capacity that exceeds the existing limit of 8 million. 

This new terminal will have the capacity to handle 16 million passengers and only 900,000 tonnes (approximately) of cargo annually. 

The current infrastructure only allows passengers to avail air travel and have limited cargo transportation facilities. Meanwhile, our region is witnessing a significant surge in air transportation. 

IATA, Boeing, Airbus, and many aviation thinkers forecast that Bangladesh's air travel is going to boom and double over the next 10 years. Infrastructure development and the addition of more passenger and cargo aircraft will be necessary to meet the forecast demand. 

At present, only three Bangladeshi air carriers operate on international routes, and they utilize less than one-third of the available capacity. A major share (almost 80%) of this air transportation is being executed by foreign air carriers. 

Existing ground handling facilities are inadequate to support the growing demands of airlines operating to and from Bangladesh. Further expansion would necessitate an inclusive process for capacity development for airports, airlines, and regulators. 

By establishing required infrastructural facilities and facilitating the growth of airlines in Bangladesh, we could really reap huge economic benefits from this rapidly growing aviation industry. 

Singapore, the UAE, Qatar, and Turkey are the prominent examples of aviation hubs in this region. Our closest neighbour, India, has also excelled tremendously in this arena over the past decade. In contrast, we are significantly lagging behind. 

Immediate actions

Creating a full-fledged aviation hub is a long-term process. 

Bangladesh is currently in the transition phase toward establishing a stable political government. The new government will likely need time to settle before implementing their plans. Hopefully, the new cabinet will be able to undertake appropriate development plans and successfully execute them to make our country better for our citizens. 

To boost economic growth, the new government is expected to focus on developing the aviation sector and creating an aviation hub in Bangladesh. Therefore, it is highly advisable for the new government to promptly implement the following actions as soon as it assumes functioning:

Firstly, it is crucial to fully operationalise Terminal-3 of Hazrat Shahjalal International Airport as soon as possible, with the support of efficient ground handling facilities and capable operators. 

Given technical and operational requirements, construction of the second runway is essential, and CAAB needs to take the necessary steps immediately. At the same time, all ongoing development projects, including the upgrading and modernisation of other international and domestic airports, should be completed without delay.

With immediate effect, the process to establish another international airport near the capital – integrated with an aerotropolis city and supported by fast-track multimodal transport connectivity – should be initiated. 

In parallel, BIMAN management must undertake essential reforms to establish itself as a commercially credible airline. A feasibility study may be conducted to determine whether privatising its management or retaining its government-owned status with structural reforms would better align it with successful international airline practices.

Independent CAAB regulatory functions must be ensured in line with the ICAO Charter, including its Annexes and Standard and Recommended Practices. Simultaneously, the separation of facilitation functions in civil aviation – particularly airport operations and maintenance – needs to be implemented. 

A joint committee may also be convened to develop strategies to encourage the growth of more Bangladeshi commercial airlines and to create policies aimed at attracting and retaining qualified aviation professionals. 

Furthermore, to prevent conflicts of interest and align with global best practices, a decision should be taken on whether Civil Aviation and Biman should operate under separate ministries or remain within MoCAT with appropriate structural reforms.

Sketch: TBS

M Mafidur Rahman is a retired Air Vice Marshal and a former chairman of the Civil Aviation Authority of Bangladesh (CAAB).

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.