NovoAir Launches Domestic Flights in Bangladesh

A new airline has taken to the air this week in Bangladesh initially linking Shahjalal International Airport in the country’s capital Dhaka to three domestic cities – Chittagong, Cox’s Bazar and Jessore - but with plans to further boost local schedules and expand into the international market. The carrier, NovoAir, inaugurated flights on the morning of January 9, 2013 using a fleet of two Embraer ERJ 145s.

The start-up is part of the wider Novo Air aviation services company which already includes diversified activities such as third party passenger and air cargo transportation, travel and holiday services and high end aviation technology solutions. The business also acts as the general sales agent (GSA) for China Southern Airlines and low-cost venture Tiger Airways in the Bangladeshi market.

NovoAir is mainly serving the popular route between Dhaka and Bangladesh’s second largest city, Chittagong, a key trading post and home to the country’s main seaport. The venture is offering up to four daily flights on this route in direct competition with national carrier Biman Bangladesh Airlines, regional operator Regent Airways and United Airways. This month there are already eleven flights per day between the cities offering almost 29,000 seats in each direction.

Through its debut on the route, NovoAir will increase frequencies between Dhaka and Chittagong by a quarter, boosting capacity by 16.8 per cent. In 2011 an estimated 419,000 O&D air passengers travelled between the two cities, up 10.4 per cent on the previous year with average fares of $72 each way.

Alongside the Chittagong route, NovoAir is offering daily flights between Dhaka and the domestic points of Cox’s Bazar and Jessore. Both routes are already served by Regent Airways and United Airways with an estimated O&D demand of 55,000 and 105,000 air passengers a year between the capital and the two destinations, respectively.

NovoAir is the first operator of aircraft from Brazilian manufacturer Embraer in Bangladesh. It acquired two pre-owned 50-seat ERJ 145s which were last operated by UK carrier Flybe in a deal with Airstream International Group last year and is already considering expanding its fleet to support a planned network growth to include select regional and international routes from the second year of operations. The airline has already revealed plans to add Sylhet to its destination list but is also understood to be considering the likes of Bangalore, Chiang Mai, Kathmandu, Kolkata and Yangon.

“With the introduction of our ERJ 145’s, we are pleased to offer an all-jet domestic service which will appeal to the business traveller in Bangladesh. In the future, we aim to connect our key cities with other top destinations in the region,” said a tight-lipped Mofizur Rahman, Manaing Director, NovoAir.

The executive was a former Group Captain in the Bangladesh Air Force with more than 25 years of flying service. He is joined in the carrier’s senior management team by Arshad Jamal who holds the position of Director and Chief Finance Officer and Faiz Khan, who is Chairman and Chief Executive Officer. Both have strong business backgrounds with a wide range of experience in both the private and public sectors.

NovoAir plans to become the airline of choice for business travelers in Bangladesh with a good quality and most importantly, reliable flight schedule. Around 686,000 passengers flew internally on point-to-point services in Bangladesh in 2011, but yields are relatively poor with average fares of just $69 each way. This compares with $239 in Australia’s domestic market and $105 in UK domestic skies, but remains slightly higher than the domestic market in neighbouring India, where average one way fares were $59 the same year.

The Bangladesh domestic market has seen capacity peaks and troughs for much of the 2000s but overall seat availability is up 13.2 per cent since 2000 thanks mainly to rapid growth in 2008 and 2011. In the table below we highlight the largest air carriers in the local market and look at how their capacity has changed in the past two years.

For Embraer, the launch of NovoAir is a notable step in its growth ambitions in this region of the world. The Brazilian manufacturer’s jets are now in service with 85 airlines in 51 countries around the world and NovoAir becomes the 13th operator of its commercial aircraft in the Asia Pacific region, where an Embraer aircraft takes off once every 45 seconds, according to the manufacturer.

“NovoAir's decision to buy the ERJ 145 reflects the potential for 50-seat regional jets to develop markets with small units of capacity,” said Alex Glock, Vice-President – Asia Pacific, Embraer Commercial Aviation. “The operating economics of used aircraft today can be quite attractive in lower density markets, such as Bangladesh, where 50-seat jets have the ability to build airline networks and frequency, as they have done in other parts of the world.”