Indian airlines make a beeline for Dhaka

Pre-pandemic, Dhaka was an important point for Indian carriers. Not only did they bank on O-D (Origin – Destination) traffic between India and Bangladesh but the likes of Jet Airways and Air India also vied for the Bangladeshi traffic to Europe. As things start getting normalised post pandemic, Indian carriers are making a beeline for expansion at Dhaka.

IndiGo, Vistara and Air India are expanding flights to Dhaka with new connections and frequencies. Vistara has announced flights to Dhaka from Mumbai effective Nov 15, 2022. The airline will operate the flights twice a week, The airline already has Daily flights to Dhaka from Delhi. The airline had launched flights to Dhaka (from Delhi) in November 2020, as part of the air bubble services.

Air India, which is currently operating to Dhaka from Kolkata, is showing Delhi – Dhaka flights beginning mid January in its timetable.

IndiGo is currently operating twice a week flights from Hyderabad, 13 weekly from Kolkata, 4x weekly from Chennai and six weekly from Delhi. Starting the winter schedule, the airline will add four times a week flights from Mumbai. 

Air India, now a TATA group company, has started listing its daily flight to Dhaka from Delhi starting January 01, 2023. The flight is not yet open for sale, presumably because of uncertainty over the aircraft delivery or getting grounded aircraft back in air. 

ASA and competition

The India – Bangladesh Air Services agreement restricts carriers from both sides to 61 weekly services with Bangladeshi carriers having access to Delhi, Mumbai, Chennai, Kolkata, Hyderabad and Bengaluru and unlimited rights to 18 points in the country, the same airports which have open skies for ASEAN. For the Indian carriers, the access is to Dhaka, Chattogram and Sylhet and rights to any place in Bangladesh from 18 airports which have open skies as part of the agreement. 

Data shared by DGCA shows that the traffic between two countries averages between 1600 to 1900 passengers each way per day. Bangladeshi carriers take about 35% of this traffic with the rest with Indian carriers. Post reopening of international flights in the Summer 2022 schedule, the traffic is half of pre-COVID between India and Bangladesh. 

Dhaka is the largest airport in Bangladesh and serves the capital of the country. The single runway airport is congested and struggles for slots. The airport has been undergoing expansion in phases and continues with the process. The airport is a hub for Bangladeshi national carrier Biman Bangladesh and also serves as hub for other private carriers in the country.

Bangladesh and India have had good relations since the birth of Bangladesh in 1971. There has been a rapid increase in trade and medical tourism between the two countries. In 2021, India exported $14,471 million worth goods and services to Bangladesh, while it imported $1,831 million of goods and services. The export growth was 81%. The top exports included Cotton, Cotton yarn, Cotton fabric, Wheat, Rice, Petroleum products, Bulk minerals while top imports included Spices, Cotton fabrics, Vegetable oils.

Network Thoughts

Vistara has been selectively adding international capacity from Mumbai. Dhaka adds to its current international portfolio of Singapore, Abu Dhabi, Dubai and Jeddah. With just twice a week operations, Vistara will aim for O-D traffic rather than connections, before increasing frequency. 

Air India’s operations to Dhaka will see an early morning departure from Delhi, going by the current timings on its website. This will connect to London, both ways, on most days if not all. The split schedule at London for Air India is going to be painful from selling as well as connections point of view for the airline. IndiGo’s expansion seems to be towards O-D traffic as well as some connections to the middle east. 

Dhaka airport has its own challenges in terms of slot allocation and distribution. This means that desirable slots may not be available or granted to the airline. Biman Bangladesh the local carrier has been expanding and wants to protect its turf, thus discouraging connecting traffic. Indian carriers also have to compete with the middle eastern carriers like Emirates, Etihad and Qatar Airways for connecting traffic to Europe. 

Colombo, Dhaka and Kathmandu are the prime cities which Indian carriers should aim at for connecting traffic. However, these cities also see operations of the middle eastern carriers and Air India will take a while to improve its product and service to be competitive to take away the premium traffic. Jet Airways had done well in terms of connections, though one does not know if the impact was positive financially. 

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