Aviation sector faces rough ride | The Daily Star
12:00 AM, June 11, 2021 / LAST MODIFIED: 03:04 AM, June 11, 2021

Aviation sector faces rough ride

Jet fuel prices hiked; domestic air travel to get pricier

Air travel within the country is going to get costlier as Padma Oil Company, the only source of jet fuel in the country, has once again increased the price of the fuel.

This is the seventh time in eight months that Padma, a subsidiary of the Bangladesh Petroleum Corporation, has increased jet fuel prices, dealing a another blow to local carriers that have yet to recover from the sharp decline in business due to the pandemic.

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Aviation industry insiders told The Daily Star that the local airlines that operate international flights will lose their competitiveness.

Air travel will inevitably get costlier and it is the passengers who will have to spend more, they added.

The BPC decision, put in effect on June 8, has increased the price of each litre of jet fuel by Tk 3. A litre of the fuel now costs Tk 63.

In October, the price was Tk 46, meaning the BPC has increased the price by 37 percent in the last eight months.

In December, the price of a litre of jet fuel was Tk 48, in January, it was Tk 53, in February Tk 55, in March Tk 60, and in April it was Tk 61. Then in May, the price was lowered by Tk 1.

Mofizur Rahman, secretary general of Aviation Operators Association of Bangladesh, told The Daily Star that there was no rationale behind the price hike at a time when prices were stable in the international market.

"The country's aviation industry is on the verge of collapse due to the first and second wave of the pandemic. The increased jet fuel cost will be an additional burden. The BPC's monopoly and whimsical decisions should come to an end," said Mofizur, also the managing director of Novoair.

"At a time when we need the government's support on an emergency basis, the BPC has illogically increased the jet fuel price," he added.

"Our survival is at the stake now."

Kamrul Islam, general manager (public relations) at the US-Bangla Airlines, said, "Aviation is one of the worst-hit sectors by the pandemic. Operations on many international routes have been suspended since March last year. The number of flyers is also low.

"The increase of jet fuel prices is a severe blow to the local airlines.

"We will have no choice but to increase airfare."

He also said 40 to 46 percent of operational expenditure of an airlines is fuel.

"We will be bankrupt and the aviation industry will collapse if we don't raise the airfare in accordance with the fuel price," he said, adding that tourism and hotel businesses were related to the aviation industry.

"If the aviation industry does not sustain, tourism and hotel businesses will be affected."

Aviation expert Kazi Wahidul Alam, who is the editor of travel magazine Weekly Monitor, said different countries were looking into how they could support their aviation industry.

"But our government has so far done nothing in this regard. Instead, it has increased the jet fuel price although oil prices have not increased in the international market.

"I can't find any reason that warrants the jet fuel price hike. Survival of the country's airlines industry is at stake. Due to the repeated hikes in fuel price, it will become a big challenge for the local airlines to compete with foreign airlines."

Syed Mehdi Hasan, director (operations and planning) at the BPC, yesterday said the local price of jet fuel corresponded to the international market.

Mehdi, head of a committee that decides jet fuel prices, also said jet fuel still costs less in Bangladesh than in India and other neighboring countries.

BPC had not hiked the price to make profits. "We did it to keep up with the international market."

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