‘Save the ailing aviation industry’

Aviation Operators Association of Bangladesh (AOAB) yesterday called upon the government to meet its three-point demand for the survival of the country's ailing airline industry.

AOAB in a letter to State Minister for Power, Energy and Mineral Resources Nasrul Hamid made these demands.

Mafizur Rahman, AOAB secretary general and managing director, and Abdullah Al Mamun, vice president of Novoair and AOAB, submitted the letter to the state minister's office at the secretariat.

The three demands are -- approval of the direct purchase of fuel from Partex Petroleum for domestic private sector airlines as well as helicopter operators, import of jet fuel from abroad at competitive prices if necessary and adjustment of jet fuel prices between the domestic and the international routes.

AOAB said airlines in neighbouring countries can directly import their required fuel. On the other hand, the price of the domestic route is higher than the international route due to the difference in fuel prices.

In the letter, AOAB said they have made maximum efforts and invested a huge amount of money to establish Bangladesh as a regional aviation hub.

"However, due to the high prices of jet fuel in Bangladesh, the aviation sector is facing a crisis. Around 40-46 percent of the operating cost of the airline is dependent on the cost of fuel," read the letter.

AOAB leaders also said the aviation sector is on the brink of collapse due to the impact of the prolonged Covid-19 enforced lockdown. The skyrocketing fuel price as a result of the Ukraine-Russia war has hit the sector hard. It's only a matter of time for the country's airlines to go bankrupt.

They said Bangladesh often has to purchase jet fuel, especially for domestic flights, at prices 30-40 percent higher than the international market. Promising airlines such as GMG, United and Regent went bankrupt for this reason.

As Padma Oil Company has sole authority to sell jet fuel, airlines are denied the right to purchase jet fuel at competitive prices. On the other hand, the same fuel for domestic flights costs 15-25 percent more than the fuel for international flights.

Most recently, the fuel price for domestic flights has been increased to Tk 130. Meanwhile, the fuel price of international flights has been reduced to 1 dollar, which is unprecedented.

AOAB also said overvaluation of domestic fuel has pushed airline ticket prices beyond passengers' purchasing power, resulting in a sharp decline in passenger demand. As a result, the total tax collection of the government will be less than Tk 7.2 crore per month.

At present, private-sector airlines transport more than 75 percent of domestic passengers. But the collapse of this sector is inevitable in the current situation.

The entire business and trade of the country will come to a standstill due to the absence of much-needed means of air communication.

AOAB urged the state minister to take necessary steps to protect the sector from disaster.