SAIA needs proper facilities to harness it's potential & to get out of trouble
Published Date : 16 September, 2009
_By Raquib Siddiqi
Dhaka : The refurbished and expanded Shah Amanat International Airport at Chittagong has become a white elephant due to lack of proper use. Presently, this highly under utilized airport cannot even meet its operation cost from its income.
In addition to proper marketing, SAIA urgently needs some basic facilities to attract airlines to use the airport. These basic facilities include Departure Control System (DCS), proper catering, fuel and water supply and cargo handling facilities.
It may be noted that the competition dynamics of airports and airlines have changed dramatically in the past several years. The old business models are of questionable value and the speed of change is accelerating. Airport-airline relationships and their route development activities in particular have under gone radical change.
While the a number of countries have traditionally favoured private ownership and control of economic enterprise, there always has been a recognition that some functions are so "affected with the public interest" that governmental involvement is required.
Airports traditionally have been considered classic examples of "public enterprises," a type of enterprise that is distinguished from private-sector firms in that they operate as government-approved monopolies that supply an indispensable service to society.
Considering the critical role of airports to the regions and the cities in which they are located, coupled with the high costs of constructing and operating these facilities, public control of airports has not been questioned throughout most of the history of aviation.
In the United States_ the largest single aviation market in the world-- the mixed system of privately- and publicly-owned and -operated airports has created what arguably is the most successful airport system in the world.
However, a number of recent developments have led to increased efforts to commercialise or privatise publicly-owned airports, both in the United States and elsewhere throughout the world. Airport privatisation proposals provide testimony to the strength of the privatization movement; in general, since commercial airports long have been considered as falling within the proper scope of government.
In one recent year, IATA member airlines and its passengers paid in their regular international services US 13.700 million of which 54 per cent (7.400 million) were landing fees at airports and related charges, and the rest (6.300 million) were air navigational aids charges which translate to 10 per cent of their operating costs.
The airlines support the tendency to commercialise (and in some cases to privatise) the airports in the world, so that the infrastructure used by the airlines and its passengers is not managed by government entities.
Today, about 55 states have partially or totally privatised their airports or operate an autonomous manner and in the future more and more airports will be privatised.
IATA supports this tendency to commercialise the airports and the air navigational services, if these processes are implemented in a proper manner. To answer today's concerns, aviation experts are adopting new Airport Strategy and Marketing designed to provide a better understanding of the increasingly competitive nature of business, changes in evolving interline agreements, code sharing and alliance synergies.
The airport project at Chittagong, initiated on March 12, 1998, was completed on scheduled in March 2001. Funded by OECF of Japan, the airport was expanded and modernised, not only looking at the future need, but as an alternative to Zia International Airport, Dhaka at the time of need.
With 1.80 lakh square feet terminal building and other modern facilities like boarding bridges and luggage conveyors SAIA is capable to handle about 1.5 million passengers a year and nearly 6000 tons of cargo. The expanded and strengthen runway is able to allow landing of any aircraft now in operation commercially in the world.
The SAIA is situated on the route from Europe and Middle East to Far East. Around 20 airlines over fly Chittagong daily. With attractive fuel price, ground handling facilities and charges, some of these airlines can be encouraged to use Chittagong as transit. But marketing effort to this direction is yet to come.
It may be recalled that despite prospect and potential, the future of SAIA looked bleak. Lack of perspective plan for its use and lack of effort to market the property are to blame for the sorry situation.
The CAAB is required to spend nearly Tk 500 million annually for debt servicing and running the airport. At present, the income is even far short of the cost of operation.
Apart from some international flight of national flag carrier Biman Bangladesh Airlines, three foreign airlines-Puket Air (a private airline of Thailand), SilkAir of Singa-pore and Thai Airways International started international flights to and from Chittagong.
Unfortunately, Puket Air did not last long. It folded its operation soon after it began. SilkAir also pulled out it operation from January 2004. Thai continued its operation before closing in 2008.
At present four domestic airlines-Biman, GMG, United and Aviana and two foreign airlines-Air Arabia and Oman Air are operating to and from SAIA. Kuwait Airways and budget carrier of Dubai, Fly Dubai are expected to start operation soon.
In the absence of proper management as well as adequate user airlines, SAIA has failed to keep up with the current requirements for proper handling. Some of its facilities are also not functioning and need repair or replacement.
The few of airlines that are using SAIA now are facing difficulties of various natures to make their operation smooth.
Major problem of SAIA as stated earlier are absence of DCS, absence of proper catering, re-fueling, cargo handling facilities and water supply. Limit is operation time is also another great handicap of SAIA. At present the airport is shut down for flight operation between 10:30 pm to 7:30 am.
It is not known the reason for limit in operation time. If it is due to lack of number of airlines currently using the airport-it is acceptable. But if it is due to technical inadequacy or shortage of manpower, than these should be immediately solved.
Existing other problems include :
Repair or replacement of scales and belts laying unserviceable at some of the check- in counters.
Need for more than one entrance to the airport building to meet the demand and pressure of passengers as they are to stand in queue outside and airlines on time departure gets effected.
Security at the Airport should be tightened as a large number of people are seen-- in ground floor, first floor and arrival areas_ involved in matters which are not related to their duties.
Connection must be given to the Internet booths that have been setup at the airport for the benefit of the passengers.
Airline as well as travelling public needs uniform method of announcement. But at SAIA, most of the time there's no staff available to make announcement.
Moreover, speakers installed outside the terminal are out of service for some time.
There is need for installation of CCTV in the baggage loading unloading area.
There should be arrangement for proper ramp cleaning. This is posing serious safety hazard as the debris on the ramp can cause serious damage to the aircraft.
Air conditioners on the first floor of the airline offices are not working.
For the benefit of travellers, arrival and departure flight information monitor to be installed out side the terminal building.
Information counter should be operated by CAAB where information about all airlines could be obtained.
CAAB has fixed landing, parking and other fees for SAIA at the same rate as ZIA. Airlines are considering this as unfair. They said that according to system followed all over the world SAIA can not the equated with ZIA and fees cannot be the same.
This is important because, the landing fees and in general all airport charges are an important component of the airlines? operational costs. The traditional criteria that for higher costs there are higher fees are not anymore applicable in most markets. Fees and tariffs depend on the competitive situation of the relevant market. SAIA should made its fees attractive to airliners.
SAIA has great potentials. But to exploit the potential proper marketing must be made and before that_ the airport should be equipped with all the essential modern facilities to attract airlines to use it.
In the absence of efficient management SAIA has failed to exploit its potentials and remain a liability. There is no need for SAIA to live on ZIA's income, it can be a profitable concern, provided the CAAB come up with appropriate measures.
From the very start, the government decided to privatise the management of SAIA- keeping the regulatory functions with the CAAB. But the government has failed to privatize management_ ground handing and other non-technical airport services of the airport mainly due to opposition.
The first try to get international operator to run the airport ended in failure due to lack of response. Several years later, the government decided to hand over the management of SAIA to Thai Airways International, selected on the basis of international tender. Thai was to manage SAIA for 10 Years. The decision was announced on June 23, 2005.
Under the outsourcing plan, Thai Airways was to be responsible for functioning of the airport-ground handling, maintenance etc. and do it on profit sharing basis. CAAB will retain responsibility of Air Traffic Control and Security.
In return, Thai Airways International was to pay CAAB Taka 529 million in foreign currency over the next 10 years.
But to the delight of the opposition and shame on the part of the government, the CAAB after number of postponements failed to handover the management of SAIA to Thai.
In requesting several postponements, the government demonstrated timidity and failure to counter the pressure of Biman union and opposition political circle of Chittagong. Finally, Thai found no alternative but to withdraw from the project.
No backup action
While formally opening the Tk 5400 million, refurbished and expanded Chittagong Airport, the then as well as current Prime Minister Sheikh Hasina said "with the inauguration of this airport, Chittagong as a commercial capital will now be directly well connected to all international destinations," and expressed the hope that the "airport would open up a new era in promoting export, investment and tourism in Chittagong".
Unfortunately no follow-up government action has come this far to materialise the vision expressed by the Prime Minister. Time has come to do some thing positive to realise the potentials of SAIA. Modern facilities must be created to attract modern users.