Foreign airlines have reduced 45 flights from Dhaka and Chittagong due to the ongoing dollar crisis, resulting in decreased flight availability and soaring airfares. Airlines are unable to repatriate earnings from ticket sales, which are stuck in local banks due to the dollar shortage. As a result, the number of available seats has decreased by more than 9,000 per week, exacerbating the pressure on passengers and driving up ticket prices.
According to aviation experts, this increase in airfares is largely due to a combination of factors including high travel taxes, ground handling charges, and the rising cost of funds. The dollar crisis, which has led to significant challenges for airlines in securing foreign currency, is also to blame for the price hikes. Furthermore, a recent directive from the Ministry of Civil Aviation and Tourism regarding the sale of group tickets has stirred additional frustration among airlines, adding to the chaos.
The ministry’s new circular stipulates that airlines must issue tickets within 72 hours of booking, with full passenger details, including passport numbers, to prevent speculative pricing. If airlines fail to meet this deadline, the booking will be automatically canceled. The circular aims to control abnormal price increases but has been met with backlash from airlines.
Industry representatives, including the Board of Airline Representatives Bangladesh (BAR), argue that this restriction is counterproductive and violates international aviation norms. They contend that the 72-hour rule is impractical and could hinder normal commercial operations, ultimately damaging the air transport sector’s economic sustainability.
Furthermore, airlines have warned that the circular could lead to a shift in the Bangladesh travel business to foreign online travel agencies, resulting in significant financial leakage abroad. The implementation of this rule has forced local travel agencies to rely on foreign agencies for group bookings, which in many cases involves money being transferred via informal channels such as hundi.
The BAR has written to the Ministry of Civil Aviation and Tourism, requesting the cancellation or amendment of the circular, arguing that it is a violation of international competition and anti-trust laws. They also pointed out that the circular disrupts the business of Bangladeshi travel agents, who are now being sidelined in favor of foreign intermediaries.
Experts have raised concerns that if this situation persists, Bangladesh’s entire airline ticket market, estimated at 40,000 crore taka, could be at risk of being smuggled abroad, further exacerbating the country’s ongoing foreign currency crisis.
The Ministry of Civil Aviation and Tourism confirmed that it received a letter from BAR expressing concerns over the circular and has indicated that a decision on the matter will be made in the next meeting. Meanwhile, airline operators and travel industry representatives continue to call for a resolution to the issues created by the dollar crisis and the new regulations.
The ongoing dollar crisis in Bangladesh has led to a sharp increase in air ticket prices and a reduction in flights, creating chaos in the country’s aviation sector. Foreign airlines have been unable to repatriate their earnings due to a shortage of dollars, leading to financial strain and the cutting of 45 flights from Dhaka and Chittagong. Aviation industry experts have raised concerns that government actions, such as a recent circular on group ticket sales, are exacerbating the situation.
The Ministry of Civil Aviation and Tourism issued a new directive that imposes restrictions on group ticket sales, including a 72-hour limit for issuing booked tickets and the mandatory inclusion of passport details. This move is seen by industry representatives as a violation of international aviation laws and a hindrance to airlines’ commercial freedom. The Board of Airline Representatives Bangladesh (BAR) has sent a letter to the ministry, highlighting that the circular undermines the economic sustainability of air transport services and could damage the travel market and Bangladesh’s broader economic development.
According to BAR General Secretary Ahmed Reza, the circular, which imposes a 72-hour booking and ticket issuance requirement, does not take into account the different policies of airlines and the visa approval process for Bangladeshi passengers. This rule, they argue, is unrealistic as visa approvals often take more than 72 hours. The BAR also criticized the disclosure of ticket sales prices to the Ministry, warning that it could lead to price-fixing, violating both national and international competition laws.
Aviation experts also pointed to other factors driving up ticket prices, including high taxes imposed on the aviation sector in Bangladesh. For example, passengers traveling from Bangladesh to destinations such as Malaysia and Singapore face taxes nearly three times higher than those flying in the opposite direction. High fuel prices and steep landing, parking, and ground handling fees in Dhaka, compared to international standards, are also pushing up ticket prices. Additionally, foreign airlines are burdened with a 7 percent commission to local travel agents, further adding to the cost of tickets.
Furthermore, the remittance issue has created significant challenges for foreign airlines, with approximately Tk 219 crore of ticket sales stuck in local banks. This is forcing airlines to factor in the cost of capital and increase ticket prices accordingly. With funds stuck in Bangladesh since March of last year, the airlines have already started reducing flights, further reducing the availability of seats and increasing ticket prices for passengers.
The dollar crisis, combined with the government’s recent actions, has led to a challenging situation for the aviation sector. Industry leaders are urging the government to revise or cancel the controversial circular, which they argue is damaging the airline business and pushing money out of the country through informal channels like hundi. If these issues remain unresolved, experts fear that the aviation sector’s ticket market, worth around Tk 40,000 crore, could be at risk of being smuggled abroad, exacerbating the ongoing foreign currency crisis.
As of now, the Ministry of Civil Aviation and Tourism has received the letter from the BAR and is expected to address the issue in an upcoming meeting. However, it remains to be seen whether the ministry will amend the circular or take further action to resolve the ongoing crisis in Bangladesh’s aviation sector.
