Airlines cheer as surcharges slashed

The government has slashed the fees for landing, air navigation, parking and embarkation, much to the relief of the local airlines which have been saddled by the high surcharges.

The yearly surcharge for runway use, control room, aircraft parking and terminal facilities across the country’s seven airports now stands to 14.25 percent, down from 72 percent, after the Civil Aviation and Tourism ministry amended the rules.

The move comes following long-term requests from the Aviation Operators Association of Bangladesh (AOAB), a platform of privately-owned airline operators, to reduce the annual surcharge from 72 percent to 12 percent to help keep the airlines stay afloat.

The annual surcharge in India is 12 to 18 percent, in Singapore, 8 percent, in Oman 10 percent and in Pakistan 2 percent, according to Mofizur Rahman, managing director of private airline Novoair.

As much as 78 percent of the local airlines’ total outstanding dues of Tk 7,351.45 crore with the Civil Aviation Authority of Bangladesh (CAAB) comprises of the late fee for the surcharges.

At least three to four airlines were forced to cease their operation only because of failure to pay their dues to CAAB, said Kazi Wahidul Alam, an aviation expert.

For instance, the now-defunct GMG Airlines owes CAAB Tk 368.29 crore: the main amount is Tk 56.98 crore and Tk 311.30 crore are surcharge and other charges, according to AOAB.

United Airways, which has ceased operation, owes CAAB Tk 355.37 crore: Tk 56.88 crore is the main amount and the remaining Tk 298.49 crore is accumulated surcharge.

Regent Air, also defunct, owes Tk 283.38 crore: the main amount is Tk 136.18 crore and the remaining Tk 147.20 crore is late fee.

“We have been urging the regulatory authority to reduce the rate for many years, but nobody paid heed to our request to save the industry. Finally, our demand has been met. We are completely satisfied with the government’s move which will be helpful for the country’s aviation industry,” Mofizur said.

The move will also benefit the passengers, according to aviation experts.

At present, only three private airlines are in operation: US-Bangla Airlines, Novoair and Air Astra.

If more airlines enter the market, the price of ticket will reduce due to competitiveness, said Wahidul. 

“When we took the move to revive the operation of United Airways, foreign investors declined to invest when they came to know about the black law of high rate of surcharge,” said ATM Nazrul Islam, another aviation expert.