Airlines teetering on the edge of collapse

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The country’s airline industry is grappling with strong headwinds and may drift further towards the verge of collapse without substantial financial support from the government, according to Mofizur Rahman, managing director of domestic carrier Novoair.

As airlines offer a critical lifeline to the economy by providing one of the fastest and most essential means of communication, many countries have come forward with rescue packages for their aviation industry.

“And our government should also follow suit,” Rahman told The Daily Star in a recent interview.

The aviation industry in Bangladesh has remained largely grounded for the last couple of months to contain the spread of the deadly novel coronavirus.

In the middle of March, Bangladesh banned passenger flight operations with all countries but China, plunging the sector into mounting losses.

The pandemic could erode passenger volumes in Bangladesh and wipe $190 million or Tk 1,615 crore off the revenues of airline operators in 2020, according to an estimate by the International Air Transport Association (IATA).

The IATA forecasts airlines across the globe will lose $314 billion in passenger revenue this year amid the coronavirus outbreak and those in the Asia-Pacific region $113 billion.

“The pandemic wreaked havoc on the aviation industry across the globe but the impact is more profound in Bangladesh,” Rahman said, adding that air travel is not going to return to normalcy in the foreseeable future.

Novoair with seven aircraft in its fleet used to operate one international flight and seven domestic ones before the pandemic began to sweep the globe.

“We don’t know what the future holds for us. We only see uncertainties looming large. So, it’s difficult right now to devise strategies. But one thing is for sure, we can’t be back on track anytime soon.”

Besides, new regulatory measures and restrictions to ensure safety and hygiene in these extraordinary pandemic times will jack up costs.

There will be cuts in capacity, retrenchment of the workforce and structural adjustment in payroll for the survival of the airlines.

About their activities during the shutdown, he said: “We are now virtually connected with our staff members and trying to warm them up through counselling.”

Professionals like pilots and engineers are getting their skills revamped by attending online classes.

On the challenges they foresee, Rahman said they are going to face unprecedented risks, which will be difficult for them to deal with.

“There will be multi-tier restrictions across the board — from regulators to governments — that will make things even harder. Economic survival will be the greatest among all the challenges.”

The Aviation Operators Association of Bangladesh has recently put forward its demands to the government seeking support to cope with the financial losses inflicted by the pandemic.

“We have received assurance from the authorities concerned for the assistance we have demanded,” Rahman said.

Talking about the barriers the aviation sector faces, the Novoair MD said: “We have a fundamental structural deformity for which the airline business can’t flourish in the country.”

The other challenges include a lack of policy support from all levels, the absence of a transparent regulatory and policy regime, high fuel prices and exorbitant operating costs.

“Problems compound with high import tax on aircraft spare parts and high bank interest. We also need to hire pilots and engineers from abroad, which raises our costs.”