Aviation sector gets the cold shoulder
The proposed budget for 2020-21 has frustrated the country's aviation industry, with officials of different airlines pointing out that there was no mention of a bailout despite it being one of the hardest hit sectors for the Covid-19 pandemic.
Aviation is a major sector in the country involving millions of dollars of investment, generating a huge number of jobs and earning foreign currencies, said Ashish Rai Choudhury, chief operating officer of Regent Airways.
"The aviation sector suffered the worst due to the global Covid-19 pandemic. But the government didn't say anything to salvage the sector," he told The Daily Star.
"We had placed various demands to the government for a bailout. But this budget didn't address any of our demands," he added.
There is no specific proposal in the budget for the aviation industry, said Kamrul Islam, general manager for public relations at US-Bangla Airlines, the country's leading air-operator having 13 aircraft in its fleet.
Instead, Finance Minister AHM Mustafa Kamal proposed to increase supplementary duty on chartered flights from 25 percent to 30 percent in the budget.
This will significantly increase the cost of operating chartered aircraft and helicopter flights which people and different groups are opting for on an emergency basis amidst the suspension of regular flight operations for the pandemic.
In the current budget of fiscal 2019-20, the government had increased supplementary duty from 5 percent to 25 percent. Earlier in fiscal 2018-19 it was nil.
Operation of chartered flights increased significantly following the outbreak of Covid-19 in early March as people in groups alongside different organisations started hiring aircraft to repatriate people stranded in different countries.
In the budget, Kamal has proposed to allocate Tk 3,688 crore for the civil aviation and tourism ministry.
As airlines offer a critical lifeline to the economy by providing one of the fastest and most essential means of communication, many countries have come forward with rescue packages for their aviation industry, said Mofizur Rahman, managing director of domestic carrier Novoair.
Different airlines demanded that the government waive various aeronautical and non-aeronautical charges for the time being, he said.
"But in the proposed budget, we didn't see any such measures to rescue the industry although this industry is grappling with strong headwinds and may drift further towards the verge of collapse without substantial financial support from the government," he said.
In the middle of March, Bangladesh banned passenger flight operations with all countries except China, causing the sector to incur mounting losses.
Limited scale flight operations on domestic routes resumed from June 1 while flights on international routes are scheduled to resume on a very limited scale from June 16.
The pandemic could erode passenger volumes in Bangladesh and wipe $190 million or Tk 1,615 crore off the revenues of airline operators in 2020, according to an estimate by International Air Transport Association.