Promoting the private aviation industry
Ziaur Rahman | Friday, 6 March 2009
Expectations ran high about the growth of the private local aviation industry, but these have not been met. Many tend to point to faulty government rules and regulations for this failure. Much of the four billion dollar aviation market in Bangladesh is controlled by international airlines. According to rough estimates, the state-run Biman accounts for around 28 per cent of the total market while the local private airlines together control only 7.0 per cent with the rest going to foreign airlines.
People involved with private sector airlines conveniently state that unfriendly policies and government regulations create the major roadblocks to the growth of the local privately-operated aviation industry. Insiders say that the aviation industry in Bangladesh has a good future, but for the potentials to be realized government support is needed. This would involve taking decision about operational role of international airlines that are allowed to do business here. This step can be taken without violating the open air policy. The government can, if it wants, limit the frequency of international airline flights of foreign airlines, without running afoul of the open air policy. Some such airlines now run operations more than what can be termed due and fair. This particular initiative would provide space for the local private sector airlines to grow.
Bangladesh Biman currently enjoys unfair edge over private airline operators in the domestic and international routes. Private companies have only limited access to these routes and this policy is designed to help Biman to maintain its unearned sway over the aviation market. Clearly, this unjustified stranglehold of Biman must be broken to effectively promote the private airlines.
Aircraft with less than 80 seats capacity do not have to pay for takeoff, landing and parking in India. But the government here does not extend similar facilities to the fledgling privately-owned local airlines. There is scope for concession also in the area of 10 per cent tax on the import of aircraft parts. Another major problem is in the area of the capital market that has not developed yet in the country for this sector. There is poor access to bank loans. Consequently, the companies have to use their money or to lease in aircraft. The banks should give them loans on the basis of their goodwill in the market.
Thus, the new government that has taken over needs to formulate quickly a favourable policy about local private sector aviation. The giving of stimulus in the above manner should be aimed for, in such a policy.
People involved with private sector airlines conveniently state that unfriendly policies and government regulations create the major roadblocks to the growth of the local privately-operated aviation industry. Insiders say that the aviation industry in Bangladesh has a good future, but for the potentials to be realized government support is needed. This would involve taking decision about operational role of international airlines that are allowed to do business here. This step can be taken without violating the open air policy. The government can, if it wants, limit the frequency of international airline flights of foreign airlines, without running afoul of the open air policy. Some such airlines now run operations more than what can be termed due and fair. This particular initiative would provide space for the local private sector airlines to grow.
Bangladesh Biman currently enjoys unfair edge over private airline operators in the domestic and international routes. Private companies have only limited access to these routes and this policy is designed to help Biman to maintain its unearned sway over the aviation market. Clearly, this unjustified stranglehold of Biman must be broken to effectively promote the private airlines.
Aircraft with less than 80 seats capacity do not have to pay for takeoff, landing and parking in India. But the government here does not extend similar facilities to the fledgling privately-owned local airlines. There is scope for concession also in the area of 10 per cent tax on the import of aircraft parts. Another major problem is in the area of the capital market that has not developed yet in the country for this sector. There is poor access to bank loans. Consequently, the companies have to use their money or to lease in aircraft. The banks should give them loans on the basis of their goodwill in the market.
Thus, the new government that has taken over needs to formulate quickly a favourable policy about local private sector aviation. The giving of stimulus in the above manner should be aimed for, in such a policy.