Air travel to become costlier from next week | The Daily Star
12:00 AM, August 11, 2020 / LAST MODIFIED: 11:37 AM, August 11, 2020

Air travel to become costlier from next week

Airline passengers will face higher ticket prices from next week onwards as the aviation authority has imposed new fees aimed at funding airport development and strengthening security, according to a notice from the Civil Aviation Authority of Bangladesh (CAAB).

The new fees were levied on ticket prices and will vary depending on the traveller's destination. All airlines operating in Bangladesh will begin to collect the fees from 16 August, according to the notice issued last month.

Passengers departing for SAARC nations will have to pay an additional $5 as development fees and $6 as security fees for each ticket.

Tickets for other international destinations will carry a $10 charge for a per fee while domestic travellers will face Tk 100 each and Tk 70 as development and security fees respectively.

On top of the fees, fliers will now have to pay 15 per cent as value-added tax (VAT), according to a notice issued by the National Board of Revenue (NBR) at the end of July.

Various airline executives said the measures will only increase the overall cost of air travel at a time when the aviation sector is struggling to recover from the financial crisis that resulted from a global effort to the keep the coronavirus outbreak in check by closing international borders.

In June, the International Air Transport Association forecasted that the aviation industry would suffer one of its biggest losses in human history -- more than $84 billion in 2020 and nearly $16 billion in 2021 – due to the ongoing pandemic.

Previously, airlines lost about $31 billion due to the Global Financial Crisis and oil price spike in 2008 and 2009, they said.

Similar fees are collected at other international airports, said Mofizur Rahman, managing director of Novoair, a local airline.

"But the question is timing. It has been imposed at a time when travel is very limited. Now, the flow of travellers is very low and we are offering reduced rates to encourage their return but the added burden of the new fees and taxes will ultimately fall on passengers," he added.

Four domestic airlines and 33 foreign carriers operate in Bangladesh, mainly from Dhaka's Hazrat Shahjalal International Airport, the country's premier airport that handled about 20,000 passengers daily before coronavirus outbreak began.

A majority of the travellers are migrant workers who collectively sent home $18.2 billion last fiscal year, providing much-needed support for the coronavirus-ravaged economy of Bangladesh.

The aviation authority allowed air travel to resume on 16 June on the condition that airlines maintain a minimum seat vacancy of 25 per cent to ensure adequate social distancing between passengers in a bid to curb the spread of the deadly pathogen that has sent the global economy into recession.

The vacancy restriction is not applicable for business and first-class cabin passengers of wide-body aircraft. However, one row of seats in each class will be reserved for potentially infected travellers, the CAAB said.

Since then, some carriers resumed passenger flights on select domestic and international routes, according to several airline operators.

Still, though, air traffic is considerably below what it was until February, before coronavirus arrived on these shores, they added.

The average load factor on domestic routes dropped to 25-30 per cent while it was 80 per cent in the pre-COVID-19 era, said Rahman, also the secretary-general of the Aviation Operators Association of Bangladesh.

"There has been some improvement in passenger flow but it is happening very slowly," he said, adding that the number of flights had also declined significantly as a result.

The Hazrat Shahjalal International Airport (HSIA) currently hosts about 100 local and international flights daily, down 60 per cent from what it was before March, said AHM Touhid-ul Ahsan, HSIA director.

Meanwhile, an executive body member of the Board of Airline Representatives (BAR) in Bangladesh, said that not all carriers have resumed flights while the ones that have are operating in a reduced capacity.

For instance, Emirates used to operate 21 flights each week before COVID-19 was detected in the country. Now though, the Dubai-based airline conducts just six flights weekly, he said.

The airline executive also said that foreign carriers are paying additional ground handling charges as the sole ground handling operator in Bangladesh, Biman, slapped an additional $120 charge for each turnaround flight in a bid fund some of its expenses related to the purchase of personal protective equipment for ground staff to reduce the risk infection.

The state carrier also imposed a charge termed 'escort' for providing security.

The official said airlines will levy the additional expenses and fees on fares.

"This will impact the user in the end. Ultimately, passengers will have to pay more," he said.

The cost of air travel had already increased 10-50 per cent depending on routes following a reduction in demand for outbound flights while ticket prices will increase by a further 5-10 per cent because of the new fees and taxes, he added.

Various airports worldwide are offering incentives and discounts in a bid to help carriers survive the coronavirus fallout.

"But here, expenses are only increasing," the official said.

All else aside, the fees were imposed mainly to fund airport development and increase passenger facilities, said CAAB Chairman M Mafidur Rahman.

Such fees also exist in other countries while the process to implement them here had been ongoing for the past two years.

The coronavirus outbreak caused some delays in finalisation and approval but now, the relevant authorities can begin collecting the fees to support the developmental activities taken by the government, Rahman added.

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