FlyDubai will begin serving the western Bangladeshi city of Chittagong from January 17th, on a four-times weekly basis, which will become a daily service from March 27th. The route is currently served by the national airline of Bangladesh, Biman Bangladesh on a four-times weekly basis and during the twelve month period from October 2009 and October 2010, over 90,000 O+D passengers flew between the city pairs, with Biman Bangladesh not surprisingly having an 83% share.
There are currently 36 weekly flights between Dubai and Bangladesh, with Dhaka, the capital of Bangladesh accounting for 28 of these flights, with Emirates, Biman, GMG Airlines, United Airways and China Eastern all operating this sector.
Over 448,000 O+D passengers have flown between Dhaka and Dubai between October 2009 and October 2010, with Emirates having a 48% share of this traffic. With Chittagong having a population of over three million compared to that of Dhaka, 10 million, FlyDubai will be confident that it can stimulate traffic on the Chittagong sector with low-cost fares. With a large number of Bangladeshi workers needing to travel to the Middle East for work and large Visit Friends and Relatives flows, there would appear to be significant potential for increased capacity between Dubai and the second largest city in Bangladesh.
The wider Middle East to Bangladesh market saw nearly 2.5 milion passengers travel between October 2009 and October 2010, with Biman having a 32% share of this traffic, Saudi Arabian Airlines 14%, followed by Emirates with 13%. Emirates’ major competitors, Qatar and Etihad have just a 5% and 4% share respectively. Etihad serves Dhaka on a daily basis from Abu Dhabi, whilst Qatar serves Dhaka, eleven-times weekly from Doha. Neither carrier serves Chittagong.
With the average one-way yield in excess of 200USD, FlyDubai will be confident that it will be able to penetrate the existing market and attact new business, particularly in respect to the ethnic flows. There is very little demand in these markets for business class travel with IATA BSP data showing that only 24,000 business class passengers flew between the Middle East and Bangladesh between October 2009 and October 2010, with the average business fare at just over 460USD.
FlyDubai continues to expand into markets that the airline was designed for, operating to smaller cities, complementing the Emirates network rather than competing with it, although they do interline on certain routes. Using their smaller aircraft and much lower cost base, FlyDubai can operate to those markets which consist mostly of migrant traffic. These markets which are large in volume struggle to offer the yields that are attractive to Emirates and a widebodied fleet. Chittagong represents another major city that should be able to sustain Gulf services and FlyDubai will join the likes of Bahrain Air and Air Arabia serving Chittagong.
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