The fees are much lower compared to other countries, according to CAAB
The Bangladesh government has decided to charge fees under two new categories to all outbound passengers for using airports in Bangladesh from Sunday (August 16).
The increase in fares will not have a significant impact on international airlines, but are likely to affect domestic ones, several airlines authorities said.
The Ministry of Civil Aviation and Tourism is of the opinion that the newly imposed charges are very low compared to other countries.
Mohibul Haque, senior secretary of the ministry, said these fees are nothing new. Such charges have been in effect in many countries, including neighbouring India, and there it is much higher.
Airlines will first collect the fees on behalf of the government. Later, they will be paid using the International Civil Aviation Organization’s (ICAO) online process.
The Civil Aviation Authority of Bangladesh (CAAB) believes these freshly imposed fees will not have a negative impact on passengers and will not make travel costly as the charges are minimal compared to other countries.
CAAB Chairman Air Vice Marshal M Mafidur Rahman said: “We did not introduce the charges on a whim. We sent a letter regarding this issue in 2017, and the government took the decision to impose fees for purposes of security and airport development.”
Security and airport development fees in other countries
Security and airport development fees in Pakistan, India, the United Kingdom, and the United States, were discussed with the ministry concerned and thoroughly reviewed. CAAB issued a letter signed by its Director (Finance) Mohammad Moazzem Hossain in this regard on July 22.
Pakistan collects $20 as security and development fees from each passenger. In India, the security fee is $15 and the development fee is $5.18. The US charges $5 and $4.5 for security and development respectively, according to the International Civil Association Organization, or ICAO.
According to CAAB’s notice, all outbound passengers using the country’s airports will have to pay a “Passenger Safety Fee” and an “Airport Development Fee” from August 16.
The decision to impose these fees was taken to improve passenger safety, and airport service quality and infrastructure, CAAB said.
The aviation regulatory body of the country has set different fees depending on the destination.
The National Board of Revenue says a 15% VAT on the newly imposed security and development fees would be applicable to all air passengers.
Domestic passengers will have to pay a total of Tk170 — Tk70 as Passenger Safety Fee and Tk100 as Airport Development Fee.
Passengers to Saarc countries will be charged $5 for Airport Development fee and $6 for Passenger Safety Fee.
Meanwhile, passengers on flights to other countries will have to pay $10 for each purpose.
On February 27, the Finance Ministry sent a letter to the Civil Aviation and Tourism Ministry to take necessary steps regarding these fees, sources said.
However, the authorities of domestic airlines fear that the increase in charges could have an impact on domestic passengers during the pandemic as passengers traveling by air will have to pay an additional Tk196 on domestic routes including VAT for each trip or journey.
Kamrul Hasan, general manager (public relations) of US-Bangla Airlines said even though the ticket price will remain the same, extra costs will have to be borne by passengers.
Echoing the statement, Mes-bah-ul Islam, head of marketing and sales of Novoair, said passengers would be reluctant to pay these fees amid the pandemic. The whole situation will be clear after a few days.
Currently, every domestic airline, including Biman Bangladesh, is operating two flights per day.
Biman CEO Mokabbir Hossain said: “We have taken the decision to operate our flights between morning and afternoon every day to prevent losses on domestic routes. Biman is now operating three domestic flights on the Chittagong, Saidpur, and Sylhet routes.”
CAAB asks for incentive package
CAAB has sent a letter to the government asking for an incentive package to deal with the Covid-19 situation and its impact on the aviation sector.
It will be difficult to pay the salaries and allowances of officers and other employees without receiving incentives from the government, it said.
The letter was sent to the Finance Ministry on August 11.
The aviation secretary said CAAB’s earnings have declined by 15%-20%. However, the CAAB chairman said the percentage is much higher.
According to the letter, the salaries and allowances of officers and employees were curtailed in March and April but CAAB’s income has also declined at an alarming rate subsequently. As a result, it has become difficult to pay the salaries and allowances of staff, which is why CAAB has sought help from the government.
On May 11, the CAAB chairman told Dhaka Tribune that they want government health insurance for working on the frontlines in the war against coronavirus so that if any official gets infected or dies, they or their families will receive financial support.
CAAB’s revenue decline
CAAB’s revenue from all airports of the country has decreased a lot. Analysing their income for six months from January to June this year, it is seen that there was a slight decrease in the first two months. However, from April to June, their income saw a decrease from 46% to 88%.
As of June, the organization has earned Tk35.22 crore; by the same time last year, its income was Tk138.14 crore.
CAAB’s revenue has two components — aeronautical income and non-aeronautical income. Aeronautical income includes airspace charges, ground handling charges, etc. Non-aeronautical income includes rent from shops inside airports, various stalls, lounges, ponds, car parking spaces, rent from farmland, etc.
CAAB has sent a letter to the ministry concerned to implement 25% charges on the two aforementioned sectors.
Its chairman said they proposed 25% charges on aeronautical income for three months, and four months for the non-aeronautical side.
“We took this decision to support our airlines to operate flights smoothly amid the pandemic,” added CAAB chief.