IATA urges Bangladesh to reconsider airfare control provisions

The International Air Transport Association (IATA), the trade association for the world’s airlines, has objected to the proposed airfare control measures under Section 43A of the Civil Aviation (Amendment) Ordinance 2026, warning that the move could have unintended negative consequences for consumer choice, air connectivity and overall economic productivity.

In a letter to the Ministry of Civil Aviation and Tourism, IATA said it remains unclear whether the proposed fare-filing requirement is intended for informational purposes or for regulatory intervention.

It noted that if the requirement is purely informational, the administrative burden imposed on airlines may not be proportionate to the benefits. Any regulatory use of the provision, it added, would effectively amount to price control.

IATA warned that regulating airfares would undermine airlines’ ability to use dynamic pricing to manage load factors, financial performance and customer needs. Such restrictions could lead to higher fares for price-sensitive passengers, reduced service quality and risks to the viability of marginal routes.

Citing global experience since airline deregulation began in 1978, IATA said average airfares have more than halved in real terms due to pricing freedom and competition. It added that fare caps could create shortages, limit investment and reduce capacity.

The association urged the government to reconsider the proposed provisions and uphold the principle of pricing freedom, noting that many countries -- including Bangladesh under the 2013 US Open Skies agreement with the United States -- already allow airlines to set fares based on commercial considerations.