Tuesday, January 20, 2009

Two more airlines home in on Dhaka skies

Two more foreign carriers are expected to appear across Dhaka skies in three months, intensifying competition on busy routes, industry insiders said yesterday.

Reactions to the entry of two foreign carriers -- Indian Kingfisher Airlines and the Malaysian budget carrier AirAsia Berhad -- have been mixed. One local airline said it feels the pinch of a decline in traffic to Kolkata and Kuala Lumpur destinations.

Other local private airlines seem unruffled.

Of the two entrants, Kingfisher Airline of Indian liquor baron Vijay Mallya seeks to operate on the Dhaka-Kolkata route beginning in mid-February. Kingfisher will be the sixth airline on the route, blessed mainly by Bangladeshi medical treatment seekers, tourists and business people.

One of the biggest low-cost carriers in Asia, AirAsia or AirAsia X, won government approval and aimed to start Dhaka-Kuala Lumpur flights in early March.

The carrier said it would operate seven flights a week on the route, where Bangladeshi workers destined to Malaysia are the main travellers.

But aviation analysts said the share of the aviation pie becomes smaller for the airlines due to slowing recruitment of workers in Malaysia, and an increase in alternative travel means between Dhaka and Kolkata, such as bus and railway.

�We want to begin the Dhaka-Kolkata services by February 16. Initially, we want to operate daily. But we have to operate two flights a day,� said a senior official of Air Galaxy Ltd, general sales agent for Kingfisher in Dhaka, yesterday.

Kingfisher, one of the fastest growing carriers in India, seeks to attract travellers from Biman Bangladesh Airlines, GMG Airlines, United Airways, India\'s Air India Express and Jet Airways.

The entry of Kingfisher will enhance the overall capacity of the route, resulting in over 200 air-travellers a day. Aviation industry analyst Kazi Wahidul Alam believed that the volume of passengers on the route has not increased, but the increase in alternative travel modes likes the bus and the rail has dispersed passengers.

�The market appears saturated. The available seat capacity of the carriers will be more than the market demand, after entry of another carrier,� he said, cautioning local airlines that overall traffic might be hurt.

The Air Galaxy official however believed that Kingfisher would have an edge over others thanks to its "reliable services".

Budget carrier AirAsia X initially wants to operate five flights a week, after its Bangladesh debut in early March, said Enam Ahmed Chowdhury, managing director of AirAsia\'s local partner Dahmashi Tours and Travels Ltd.

With the entry of AirAsia X, the total number of airlines on the Dhaka-Kuala Lumpur route will be five. Other operators include Biman Bangladesh Airlines, GMG Airlines, Best Air and Malaysia Airlines. All of them depend mainly on Bangladeshi people working in Malaysia.

But the trend in hiring chunks of workers from Bangladesh is nearing an end. Starting in August 2006, Kuala Lumpur recruited over four lakh Bangladeshi workers.

Officials said the number of workers going to Malaysia is gradually declining and signs of a boost in manpower exports to Malaysia appear dim.

Enam however expected that the carrier would be able to attract traffic because of the relatively low fare. �Still there is some recruitment in the pipeline. We will also work for attracting tourists,� he said.

But an official of Biman Bangladesh Airlines said the carrier counts a drop in outbound traffic to Malaysia.

Aviation industry analyst Kazi Wahidul Alam also pointed to slowing recruitment in Malaysia. �Overall, competition in the market will be intense."

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