Government considers waiving aviation charges

The civil aviation and tourism ministry is planning to waive aviation charges for all airlines since they are reeling from the effects of the Covid-19 pandemic.

A meeting is scheduled to be held on this issue Tuesday, said Md Mohibul Haque, senior secretary to the civil aviation ministry.

Local private airlines held an informal meeting last week with the civil aviation secretary and requested him to exempt aviation charges to help reduce their operational costs.

When asked about the meeting, Mohibul said the private airlines have been going through a severe financial crisis. Private banks are reluctant to finance them as the recovery for the aviation industry will take time.

The airlines demanded that aviation charges be waived against this backdrop, he said.

On March 25, the Civil Aviation Authority of Bangladesh (CAAB) sent a letter to the civil aviation ministry, seeking necessary measures to support the industry.

Citing examples of Australia and Indonesia, the CAAB in its letter said these countries have already extended support to their local airlines by waiving aviation charges. 

Some foreign airlines have also requested the CAAB to waive aviation charges. The CAAB has proposed that the government should consider the waiver for all airlines.

"We are planning to waive aviation charges for airlines as we do not have the capacity to provide them with grants," said Air Vice Marshal M Mafidur Rahman, chairman of the CAAB.

He said the waiver will be given in consistence with the economic capacity of the country.

"So, we are still observing how other countries are acting on this issue. Primarily, we are planning to give the waiver for all, but who will get how much will be determined later," he added.

The CAAB earns around Tk90 crore to Tk100 crore per month from airlines in the form of aviation charges, but in March its revenue dropped to almost zero due to flight suspensions amid the coronavirus crisis, he said.

The CAAB provides various types of aeronautical services such as landing, parking and housing, route navigation, boarding bridge and embarkation facilities to airlines for operating both international and domestic flights.

The National Board of Revenue (NBR) collects 15 percent VAT on the aeronautical charges.

There are 24 international airlines operating in Bangladesh, out of which four are local.

Regent Airlines, a local private airline, has already suspended its operations for three months due to a severe financial crisis caused by the coronavirus outbreak.

Biman Bangladesh Airlines, the national carrier, has demanded Tk628 crore from the government to keep its operations functional.

The civil aviation ministry will sit with the NBR and the finance ministry to finalise the details of the waiver, said a senior executive of the ministry.

Meanwhile, the International Air Transport Association (IATA) has projected that Bangladesh would see a 37 percent fall in passenger demand this year, which is the fourth highest in the South Asian region.

India, Sri Lanka, Pakistan and Maldives will see the largest impact with above 40 percent drop.

Bangladesh will see a revenue loss of $842 million or Tk7,000 crore in 2020, said the IATA.

The country will lose 4,218,000 passengers this year which will impact 47,200 potential jobs in the aviation industry.

The IATA said Australia, New Zealand and Singapore have announced a substantial package of measures to support their aviation industries.

"But others in the region, including India, Indonesia, Japan, Malaysia, the Philippines, Republic of Korea, Sri Lanka and Thailand, have yet to take decisive and effective action."