Private airlines barely staying afloat

We are really concerned to learn that our private airlines have been struggling with a host of problems, which are not only impeding their growth but also have forced a number of them to completely stop their operations. According to a report by The Daily Star on February 5, regulatory malfunction, excessive tariffs, high jet fuel price and undue patronisation given to their main rival, the national flag carrier Biman Bangladesh Airlines, are the major reasons behind this.

According to the Civil Aviation Authority of Bangladesh, while 1.3 million people opted for air travel in 2000, the number increased to about 6 million in 2020. While our private airlines could have expanded their operations taking advantage of the high demand for air travel, they could not do so due to a lack of support from the government and other concerned authorities, experts say. 

The most important challenge for these airlines is to survive against the state-financed Biman, which has a bonded warehouse facility as well as a hangar at the airport which other airlines don't have. What this means is, when it comes to servicing an aircraft or replacing spare parts, the private airliners fall far behind Biman as they can't keep the spare parts at the airport, leading to a regular disruption of flight schedules. Sometimes, the private airlines have to wait for months to import the spare parts. Moreover, they have to import many of the parts—such as the multiple generators used in the aircraft, various types of LCD panels and computer displays used in the cockpit—at a very high price, due to the unreasonable tax they have to pay at the Customs. Some of the parts are taxed between 15 and 150 percent while they should be cleared on zero-tax, according to industry stakeholders. Then there is a 5 percent advance tax (AT) which has been imposed recently on the import of aircraft, engines and spares.

Another major reason why the private airlines are struggling is their due surcharges. According to aviation analysts, it is the piled-up surcharges that forced GMG Airlines, United Airways and Regent Airways to ground their fleet. The high price of jet fuel is another barrier for them.

Therefore, in order to revive our aviation industry, there needs to be a clear directive from the authorities to stop the arbitrary and whimsical practice of taxation on the private airliners. They also need bonded facilities at the airport to easily service their aircraft and replace the spare parts as needed. Getting permission from the authorities to import the parts should not also take so long. Most importantly, like Biman, private airlines also need financial assistance from the government, that is until the playing field for them is level.