Aviation industry on the brink of collapse | The Daily Star
12:00 AM, May 21, 2020 / LAST MODIFIED: 01:38 AM, May 21, 2020

Editorial

Aviation industry on the brink of collapse

Air travel as we know it could disappear without support

According to an estimate by the International Air Transport Association (IATA), the coronavirus pandemic could wipe off USD 190 million or Tk 1,615 crore off the revenues of Bangladeshi airline operators in 2020. IATA data suggests that airlines, airport operators, airport on-site enterprises (restaurants and retail), aircraft manufacturers, and air navigation service providers employ 17,000 people in Bangladesh, and a total of around 129,000 jobs are supported by air transport and tourists arriving by air—all of which are now at risk.

The Bangladesh aviation industry has managed to connect the country in a way that seemed impossible even a few decades ago, providing an essential means of transportation and communication that has boosted economic activity in the region. However, due to the pandemic, almost all of these flights have been grounded, and plans for future expansion have been put on hold while airlines struggle to cope with huge financial losses. Airlines have warned that without government support, air travel is unlikely to return to normal in the foreseeable future.

Biman Bangladesh has already secured a loan worth Tk 10,000 million to help offset its negative cash flow, and we urge the government to consider doing the same for the private commercial airlines operating in the country. The Civil Aviation Authority of Bangladesh (CAAB) has also asked the Ministry of Civil Aviation and Tourism for an immediate waiver of aeronautical and non-aeronautical charges to stop the industry from collapsing. We urgently ask the government to consider even partially waiving these charges, even at the risk of reduced revenue for the CAAB. The long-term impacts of reduced revenue can be dealt with in a planned way, such as by postponing the expansion of Hazrat Shahjalal International Airport, whereas the collapse of the aviation industry is a concern that needs to be dealt with immediately. The local airlines' demands for reducing fuel prices and operating costs, reconsidering the decision to impose VAT on aeronautical services and implementing a transparent regulatory and policy regime, should also be carefully considered.

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