High fuel prices, Biman subsidies: Pvt airlines seek government support to prevent bankruptcy

Private airlines' operators have sought government support to ensure the existence of the industry in the face of spiralling jet fuel rates and the subsidies Biman, the state-owned airlines, enjoys.

Speaking at a meeting of the Parliamentary Standing Committee on the Civil Aviation Ministry on Wednesday, Mofizur Rahman, secretary general of Aviation Operators Association of Bangladesh and managing director of Novoair, highlighted eight passenger and over a dozen cargo airlines that have declared bankruptcy in the last 30 years.

The bankruptcies stemmed from various issues like uneven competition, high aeronautical and non-aeronautical charges, and high jet fuel rates.

In the meeting chaired by Awami League lawmaker RAM Obaidul Muktadir Chowdhury, Civil Aviation Authority of Bangladesh informed that four private airlines -- Novoair, Regent Airways, United Airways, and GMG Airlines -- owe Tk 1,282 crore to the CAAB.

Of the four, only Novoair is currently operational.

Mofizur, in a written statement, said around 40-46% of an airline's operating cost is spent on fuel.

If jet fuel is bought at a price 30-40% higher than the international market and private airlines are forced to transport passengers at a low price, they will not survive.

So, the price must be aligned with the global market, read the statement.

It said private airlines are ceasing to exist due to uneven competition with Biman.

"Private airlines cannot survive due to the government's subsidised aircraft operating policy with many unrestricted privileges. A solution to this unequal competition is urgently needed," said Mofizur.

The Novoair MD said Biman has been fixing airfares at lower prices than the actual rate, compelling private airlines to operate flights with low fares as well.

Private airlines will not survive even if Biman survives with huge government subsidies.

In this case, determining actual airfare is essential, he added.