With geographic advantage and growing foreign interest, Bangladesh aims to become an aviation hub, but strategic planning and investment are crucial to overcome challenges and turn the dream into a potential reality. SM TANJIL-UL-HAQUE writes in details.
Bangladesh, a country known for its vibrant economy and thriving industries, is now setting its sights on becoming a significant player in the global aviation sector. Bangladesh’s ambition to become an aviation hub has sparked discussions among industry insiders, raising questions about whether this dream can be achieved. Prime Minister Sheikh Hasina has expressed her commitment to developing the country’s aviation sector and transforming Bangladesh into a regional hub. However, challenges such as massive investment requirements and strategic planning need to be addressed. While the country has made progress in upgrading airports and enhancing security measures, it still lags behind neighbouring countries in terms of airport infrastructure and fleet expansion. Moreover, while promising indicators and foreign interest highlight the nation’s capacity for growth, several challenges must be addressed to ensure sustainable development in the sector. Hopefully, with the government’s ambitious plans and PM Hasina’s proactive leadership, the dream of establishing Bangladesh as an aviation hub is gradually transforming into a potential reality.
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GEOGRAPHIC ADVANTAGE AND INFRASTRUCTURE DEVELOPMENT
Bangladesh’s strategic location offers significant potential for becoming an aviation hub. With the ability to reach all South Asian countries within two hours, and Asian and European countries within four to six hours, the country can serve as a convenient transit point for various routes. This geographic advantage, coupled with the large number of Bangladeshis residing abroad and a growing number of foreign visitors, presents a significant opportunity to increase air traffic and revenue.
Bangladesh has been investing in airport development projects, including the construction of a third terminal at Hazrat Shahjalal International Airport in Dhaka, to expand its capacity. Currently, the country has only eight operational airports, and six closed domestic airports remain unused due to inadequate infrastructure. Insufficient funding and suspended projects pose challenges to upgrading airports like Saidpur and Cox’s Bazar to international standards. Furthermore, the need for additional runways at Dhaka Airport highlights the limitations of land availability and need for development.
AIRBUS’S PLAN TO ADVANCE AVIATION INFRASTRUCTURE
Airbus, the European aircraft manufacturer, has put forth an ambitious plan to support the development of Bangladesh’s aviation ecosystem. The company aims to establish an ab initio school, a first in the country, to produce commercial pilots and mechanics locally. Currently, air operators rely on training pilots abroad, which incurs significant foreign currency expenditure. By setting up the school, Airbus seeks to address the shortage of pilots and reduce training costs for the industry. An agreement has already been signed between Airbus and Bangabandhu Sheikh Mujibur Rahman Aviation and Aerospace University (BSMRAAU) to establish the school in Lalmonirhat in Rangpur. This initiative was also mentioned in the recently signed ‘Aviation Trade and Investment Partnership’ memorandum of understanding (MoU) between the governments of Bangladesh and the United Kingdom. The comprehensive package offered by Airbus also includes support for higher education institutions focused on aviation, cooperation in air traffic management and airport operations, skill enhancement programs for civil aviation personnel, and initiatives to address environmental challenges such as reducing aviation emissions.
Furthermore, Airbus will provide strategic advice and marketing services to Biman Bangladesh Airlines, aiding the national carrier in maximising aircraft utilisation and expanding routes for revenue generation. The entrance of Airbus and the development of aviation infrastructure have the potential to transform the industry and establish the country as a prominent player in the global aviation sector.
GROWING INTEREST OF FOREIGN AIRLINES IN THE AVIATION MARKET
Attracting the attention of foreign airlines, Bangladesh’s aviation market is witnessing a surge in interest from international carriers, with at least eight airlines expressing their desire to enter the country’s aviation sector. The number of foreign airlines operating is expected to surpass 40, up from the current 33, following the upcoming soft launch of the third terminal at Dhaka airport in October this year. This influx of airlines holds the potential to reduce ticket prices on various routes, but concerns have been raised regarding the outflow of foreign currency amidst the ongoing dollar crisis around the globe. To ensure market competitiveness and retain foreign currency within the country, industry experts emphasise the need to enhance the capacity of local airlines by expanding their routes and fleets, as well as allowing the entry of more local carriers. The Civil Aviation Authority of Bangladesh (CAAB) has already granted permission to Egypt Air, Ethiopian Airlines, and Pakistan International Airlines (PIA) to operate flights from Bangladesh, while discussions are underway with other airlines such as Wizz Air, Air France, and Air Canada. The increasing interest of foreign airlines in connecting with Bangladesh reflects the country’s growing appeal as a travel and business destination, and efforts to address infrastructure constraints will be crucial in accommodating the rising number of flights and passengers.
UNLOCKING POTENTIAL IN PASSENGER AND CARGO MARKETS
To fully leverage the potential in the passenger and cargo markets, it is important to understand the significant growth projected by international aviation organisations. According to statistics from the International Air Transport Association (IATA), the air travel market for passengers is valued at approximately $600 million to $700 million, with a steady annual growth rate of 8% to 10%. IATA forecasts that under current trends, air transport will experience a remarkable 168% growth over the next 20 years, resulting in an additional 12.1 million to 30 million passenger departures by 2038. This substantial increase in demand has the potential to contribute $2.1 billion to $3.2 billion to the country’s Gross Domestic Product (GDP) and generate 140,000 to 222,000 jobs. Airbus, in its global projection presented at the Bangladesh Aviation Summit, highlighted the significant growth potential in both the passenger and air cargo markets for the next two decades. The passenger market is expected to grow at 6% annually, while the air cargo market is anticipated to grow at 8% per year, tripling the world average. These projections are driven by Bangladesh’s growing GDP and increasing economic openness. To fully leverage this potential and achieve the goals outlined in the national strategic plan, Smart Bangladesh Vision 2041, Airbus emphasised the importance of developing a dedicated national cargo operation and expanding Biman’s passenger fleet. The AsiaPacific and Middle East regions are expected to lead the growth in international passenger traffic, with projected increases of over 300% and 230%, respectively, by 2041. Similarly, opportunities for growth in Biman’s network and service are highlighted in the European and North American markets, where passenger traffic is expected to grow by more than 150% over the next two decades. Furthermore, air freight cargo traffic is projected to grow significantly from 400,000 tonnes in 2019 to 1.1 million tonnes by 2041. With the construction of the third terminal at Dhaka Airport and the upcoming operational international airports, including one in Cox’s Bazar, Bangladesh is poised to accommodate the rising air travel demand, particularly in the Asia-Pacific region.
PRIME MINISTER’S VISION PAVING THE WAY
Amidst Bangladesh’s aspirations to become an aviation hub, Prime Minister Sheikh Hasina’s resolute leadership and visionary approach have positioned the country on the path to realising this ambitious goal. The current government has undertaken substantial measures to upgrade airports, enhance security, and improve ground handling services, demonstrating a strong commitment to bolstering the aviation sector. Under her leadership, Bangladesh is implementing various airport development projects, including the construction of the third terminal at Hazrat Shahjalal International Airport in Dhaka. In a recent statement, PM Hasina emphasised the significance of strategic planning and investment in transforming Bangladesh into a regional aviation hub. She stated, “We need to be ready. You can’t become a hub only with a third terminal. A third terminal will enhance passenger comfort but not operational facilities.” Recognising the potential of Bangladesh’s geographical location, the premier envisions transforming the country into a pivotal transit point for regional and international routes. She stated, “If Singapore and Dubai, countries with a very small population, can become the aviation hub of the world in five decades from a very backward background, why can’t Bangladesh become a regional hub?” Her statement underscores the determination to leverage Bangladesh’s advantageous position, with its ability to connect South Asian, Asian, and European destinations within a few hours’ flight time.
Furthermore, PM Sheikh Hasina’s leadership in the aviation sector extends beyond domestic efforts. She has emphasised the importance of an open-skies policy to attract foreign airlines, pointing to the success of aviation hubs like Dubai, Singapore, Bangkok, and Kuala Lumpur. Her approach promotes collaboration and the removal of unnecessary restrictions, allowing airlines from various countries to operate flights in and out freely. As the PM continues to lead the way, Bangladesh’s aviation hub potential becomes increasingly tangible. Her strategic vision, focus on investment, and commitment to collaboration lay a solid foundation for transforming the country into a regional aviation hub.
TECHNOLOGICAL AND FINANCIAL CHALLENGES PERSIST
In this modern technological era, Bangladesh needs a robust fleet expansion plan to become an aviation hub. Currently, Bangladeshi airlines operate with only 45 aircraft, with limited prospects of adding 15 more this year. In contrast, neighbouring countries are acquiring hundreds of planes, highlighting the gap in fleet planning and development. Experts suggest that strategic planning, strong financial capabilities, and an open-air sky policy, which allows foreign airlines to operate freely, are essential for achieving hub status. However, it is crucial to strike a balance between protecting the national carrier and attracting foreign airlines to ensure sustainable growth.
Another one of the major obstacles to realising Bangladesh’s aviation hub potential is funding. The Covid pandemic has further strained the financial situation, delaying the development work at airports like Saidpur. The estimated new cost of Tk5, 000 crore required for the expansion of Saidpur and Cox’s Bazar Airports poses a significant challenge. The Civil Aviation Authority of Bangladesh (CAAB) is exploring options to secure the necessary investment. Without adequate funding, the vision of an aviation hub may remain unattainable in the near term. Despite the aspirations for an aviation hub, Bangladesh faces issues related to blocked airline funds. The country has withheld approximately $214 million, making it the second worst-performing nation in terms of blocked funds. IATA has raised concerns about the impact on airline connectivity and urged the government to collaborate with the industry to resolve the issue. Failure to address this challenge could hinder economic growth and connectivity in the country.
To conclude, Bangladesh’s potential to become an aviation hub is a dream that can be transformed into reality with the right strategic planning and leadership. PM Sheikh Hasina’s commitment to developing the aviation sector is commendable, but challenges such as massive investment requirements, infrastructure development, fleet expansion, and funding must be addressed. Bangladesh’s geographic advantage, coupled with a large diaspora and growing foreign visitor numbers, presents significant opportunities. However, it requires careful planning, collaboration with industry stakeholders, and a sound policy framework to attract foreign airlines and enhance air connectivity. Despite the challenges, with proper strategic planning and support, the country could position itself as a regional aviation hub in the coming years, driving economic growth and creating job opportunities.
