The Bangladesh government has directed all domestic and foreign airlines to use local currency taka instead of dollars to prevent passengers from being charged extra when buying tickets.
The decision will be effective from July 1 this year.
The decision was announced in a circular signed by the deputy secretary of the Ministry of Civil Aviation and Tourism recently.
Following the directive, all local and foreign airlines operating in the country will have to determine airfare in taka instead of dollars.
Bangladeshi airlines outside the country have been setting airfare in the currencies of those countries, so airfare in Bangladesh should be in taka too, according to the circular.
Last year, a delegation of foreign airlines wrote two letters to the Ministry of Civil Aviation and Tourism that said they faced financial losses because they had to convert ticket sale money twice before sending it to the respective countries.
Later, the ministry reviewed proposals from the foreign airlines and found that not only are the airlines facing problems but also some airlines and ticket agencies were taking extra charge from passengers quoting a dollar crisis.
The ministry also observed that the state-run airline, Biman, also pays all fees to their foreign countries in their respective currencies.
Later, the Ministry of Civil Aviation and Tourism sent a proposal to the Finance Division to permit airlines to use taka instead of dollars for bank transactions.
An official from the Ministry of Civil Aviation and Tourism, requesting anonymity, told Dhaka Tribune: “A strong syndicate has plundered a lot of money by using dollar exchangers in the aviation market."
The official further said: “The same syndicate had also manipulated the ticket prices at various times."
The official noted that the government's recent step would benefit both the passengers and airlines.
The International Air Transport Association (IATA) has also been promoting a similar step for quite some time.
Meanwhile, industry insiders said all countries have their currencies unstable due to various reasons, but Bangladesh's currency is now stable.
They observed that as the taka is stable, it will not affect ticket prices.
Aviation expert Kazi Wahidul Alam said: "The government has taken the right decision though it is late. This practice is maintained worldwide.”
He believes the pricing of airline tickets will no longer be subject to dollar-centric fluctuations.
However, the airlines may face devaluations of dollars but they can do business keeping in mind the situations, he added.
On April 16, a circular signed by the Deputy Secretary (CA-2) Rocksinda Farhana said: All domestic and foreign airlines in Bangladesh will have to use the local currency “Taka” as the head currency in determining the fares for passenger and goods transportation from Bangladesh."
