The world of Biman getting smaller due to improper routenet planning

Dhaka : Biman Bangladesh Airlines Limited has shut down it’s operations to and from Rome from April 6, squeezing the international network further and in fact smaller.

It is irony, that in the face of mounting losses, Biman is discarding international destinations, one after another, when for the first time in its history, the carrier has dependable capacity in a modern fleet and more in the pipeline.

Proper utilisation of increasing capacity in the fleet has become equally important, to stop incurring losses, that it is trying to stem by discarding destinations.

The slogan
The national flag carrier once used to advertise its expanding international network with slogan “world is getting smaller”actually meaning that the airlines is bringing the world closer to Bangladesh.

Now, at the sad turn of history, the meaning of that slogan will no more convey the same message. It is conveying just the literal meaning. With drastic reduction of international network, it is the network that has become significantly smaller and distance of the world from Bangladesh is growing longer.

Not so long ago, the international operation of Biman at its peak, expanded to 28 destinations, across four continents-Asia, Europe, Africa and North America. For various reasons the number of destinations started reducing and with Rome gone, the international destinations of Biman has now come down to only 17 across two continents– Asia and Europe and thus the world of the carrier has really become smaller. It must be noted that in Europe, operation of Biman is limited to only one destination-London.

No alternative
Talking informally to me recently, Air Marshal Jamal Uddin Ahmed (Retd), Chairman, Board of Director, of Biman said considering interest of large number of Bangladeshis living in Italy, sincere efforts were made to save the route. Various alternative routes were examined to keep the Rome station alive. But all ended in negative, mainly because of low yield.

The Chairman of Biman Board informed that the airline is losing nearly one crore taka per flight on Rome route. This is despite average load factor of 70 per cent on the route. The yield on the route is so low that Biman will continue to lose heavily, even if the load factor is 100 per cent, on regular basis. Under such circumstances, there is no alternative but to close the route, he said.

Lack of network planning
It is sad and unfortunate to see Biman in its present poor state. While a large number of airlines in the region are in growth path at rapid speed, Biman is struggling to survive by clipping-off destinations one after another to halt operational losses.

The network planning of Biman lacked the analytical tools and strategic insight necessary to optimise operational efficiency and business performance. There was general professional deficiency in building proper network for Biman and enhance connectivity across existing routes, while uncovering valuable opportunities to add or adjust scheduled flights.

There was no holistic approach to network planning, optimising not just route schedule, but the entire strategic outlook.

While opening new routes, different important aspects like elasticity and passenger demand, schedule development, route profitability analysis and network growth strategy were not probably analysed or considered seriously.

The lack of proper network planning is possibly the single most important factor behind bad performances some routes and their closer subsequently.

It seems that from the very beginning, route planning of Biman centered around ethnic passenger traffic. For example, in the initial period, London was the most important high-density route. From the decades of 1980s, with the movement of expatriate workers to Arab and Gulf countries, the importance was shifted to these places and to Libya in Africa. In 1990s, with the increase in ethnic people in the USA, for the brief period Biman started operation to New York.

It is interesting to note that three of these airlines from Middle East-operating to and from Bangladesh– have become dominant world players in the global airline industry and none of these has ethnic air traffic base, similar to Biman. Despite having comparatively strong ethnic air traffic support, Biman could not sustained or maintain a number of destinations on its route network-Rome is one of them.

No effort to look beyond
In its 43-year history, Biman never showed much interest in serving non-ethnic and air travellers intend to go beyond the destinations that Biman is serving. The airline made no serious effort to develop air connections, through code-share arrangements, SPA arrangements with other airlines with good network.

This over emphasis on point-to-point service, in a small network of routes, must be considered as a great weakness of Biman’s international operations. This weakness made route network of Biman very unattractive in one hand and exposed to be fully exploited by other airlines operating to Bangladesh, on the other.

With the growth of economy and commercial activities, the movement of people to and from Bangladesh continues to increase. But Biman failed to provide proper services to those who are required to travel to destinations beyond small route net of Biman. It is difficult to understand why Biman made no efforts to improve connectivity through code share arrangement-or through other such means, which are important aspect of modern operation with other airlines.

Due to inability to provide dependable travelling options, beyond points, Biman gradually lost significant market share. Even at its home base, Biman failed to keep its status of being the first choice carrier.

Following negative commercial results, Biman had no alternative but to close 11 international destinations in the recent past. The collapse of Biman’s route network is due mainly to over dependence on ethnic traffic and over-emphasis on point-to-point service with limited option to travel beyond.

Biman’s failure to develop proper route-net proves that proper route-net and dependable services are more important than having ethnic passenger traffic. The situation immensely helped new and comparatively young airlines like Emirate, Qatar and Etihad grabed lion share of Bangladesh travel market.

The contrast
Biman is now 43 years old and in very bad shape in respect of route network. But some airlines– operating to Bangladesh– much younger than Biman and have no ethnic traffic base, are shaping the global aviation through new airline routes.
Perhaps nothing illustrates the ambitions of the well-established Gulf carriers — Emirates, Etihad and Qatar Airways and Turkish Airlines so much as the swift expansion of their route networks. Turkish Airlines, the only one among these airlines older than Biman, currently flies to more than 263 destinations, and plans to add another 60 to its network in the next five years.

With good modern fleet, these carriers can fly long distances and they are connecting from their hub to almost anywhere else in the world, either non-stop, or one-stop.

Carriers like Emirates, Etihad and Qatar can access emerging markets in Africa, Asia and Latin America and connect them in a way that is meaningful to travellers.
Even budget carriers like Air Arabia and flydubai have become particularly attractive to cities and towns across Central and Eastern Europe.

Air Arabia and flydubai is a good fit for the medium-haul, thinner routes that are high-yielding and growing.

Capacity utilisation
The reduction of international destination has left Biman with excess capacity and urgent need to use properly, the existing capacity and those to be added in near future.

According to Biman source, increase in frequency in some existing routes and opening of new routes are on the card.

The airline is trying to increase frequency to Jeddah from existing five flights a week to seven; to Riyadh from five flights a week to six and to Kuala Lampur from seven flights a week to 10.

At the same time Biman is planning to introduce flights to Colombo and Male in Sri Lanka and Maldives, Guangzhou in China, Tokyo in Japan and Medina in Saudi Arabia by 2016.