GMG to resume three int'l flights as oil price eases

The country's largest private airline GMG will resume three international flights and add a new route as oil price eased both in the international and domestic markets, an official said Tuesday.

The company had to suspend its flights to Dubai, Kuala Lumpur, Kathmundu and New Delhi nearly two months back as oil price shot past 140 dollars a barrel in the global market.

The 10-year-old GMG has now decided to resume flight to Kuala Lumpur on August 20, Kathmundu on August 22 and New Delhi later this month, company spokesman Nazrul Islam told the FE.

"Oil price has started to ease in the global market. So we think it's best time to resume our international flights," Islam said.

The price of jet fuel also came down five cents a litre in the local market last week after its sole government seller, Bangladesh Petroleum Corporation, lowered the price in line with the international market.

The GMG said it would also launch a new route to Pakistan's port city and commercial capital Karachi later this month, as part of its expansion drive.

"A lot of visitors travel to Karachi every day. We think it's going to be a lucrative route," he said, adding, the airline would extend the New Delhi flight to Karachi.

The company has hired a 150-seater new MD-83 aircraft to operate the flights to international destinations, he said.

But the resumption of the flight to the Gulf aviation hub of Dubai looks unlikely for the time being as the company sees no profit in the long-haul destination.

"Dubai is still in our mind. We have to reassess the situation first before deciding we are going to resume the flight to Dubai," Islam said.

GMG took a huge gamble in February when it became the first Bangladeshi private operator to fly to Dubai.

The company hired a Boeing 747-200 aircraft on an expensive wet-lease agreement--- in which an airline pays for everything--- to operate seven flights a week to the United Arab Emirates city.

But it losses piled up after months of non-stop flights, as the operator could not find enough return passengers to Dhaka to make the money for the costly lease payment.

Analysts said the company had to suspend the Dubai route and returned the hired aircraft to the leasing company in the face one of the worst financial crisis in the company's history.

The airline had earlier this year projected around Tk 13.50 billion revenue, which is more than three times its 2007 revenue, banking on the Dubai and other new regional route.

But analysts said, the Dubai debacle and the high cost of oil meant it now would have to end the year in red and the turnover nowhere near the target.

At present, the company operates three domestic flights to Chittagong, Jessore and Sylhet and 18-21 weekly flights to Indian city of Kolkata with its three Dash-8 and two MD-82 aircraft.

Sourece: The Financial Express Dated 20-08-2008