Who is controlling the country's airlines business?

Md. Kamrul Islam: The price of jet fuel increased by 19 rupees at once, which was beyond the imagination of the airline business.

But Bangladesh Petroleum Corporation has made it a reality. Just before the start of the Eid-ul-Azha holiday, Bangladesh Petroleum Corporation instructed the airlines to pay the new price for jet fuel at the end of the last working day on Thursday, July 8, starting from Friday, July 8. By routinely increasing the price of jet fuel every month, Bangladesh Petroleum Corporation is destabilizing the aviation business in Bangladesh.

Jet fuel prices have risen 163 percent in the last 20 months since the Corona epidemic. In September 2020, the price of jet fuel was Rs 48 per liter and in July 2022, it stood at Rs 130 per liter. Everyone involved is worried about the future of the aviation business. Investors are spending time in uncertainty about the future of the business.

On July 8, the price of jet fuel on domestic routes was increased from Tk 111 to Tk 19 to Tk 130. The price of jet fuel per liter on international routes has been increased from ০ 1.09 to ১ 1.22. In the last five months, the price of jet fuel has gone up by Rs 50 per liter, which has been abnormally adjusted by Bangladesh Petroleum Corporation.

The dynamics of a country's airspace will be maintained only when the airlines of the country are in the right orbit in the air transport business. In order to be in the right orbit, the operating costs of the airlines must be logical and consistent with the survival of the competition with the international airlines. But in the aviation business in Bangladesh, the airlines, especially the private airlines, have not been able to orbit properly for the last twenty-seven years. Which is extremely sad. 8 to 9 private airlines have become history in Bangladesh Aviation for various reasons. But the last two airlines, US-Bangla and NovoAir, are fighting for the right orbit.

Private airlines are constantly having to compete unequally with the national airline Biman Bangladesh Airlines. This is the normal way for private airlines to try to survive in business. Two more airlines Air Astra and Fly Dhaka are waiting for a fresh start in Bangladesh Aviation. Can airlines adjust fares to compete with rising jet fuel prices? Is that possible? Increasing passenger fares in competition with jet fuel has a negative impact on passenger numbers.

The cost of jet fuel is 40% of the operation cost of any route. There is a huge difference in the income and expenditure of the airline business. When the price of jet fuel rises in the international market, the price of jet fuel rises in the domestic market. Bangladesh Petroleum Corporation often adjusts the price of jet fuel to make up for their previous financial losses, which directly affects the airline business.

Due to the economic downturn of 2008 and the rise of global jet fuel, the then newly established Best Air, Aviana Airways, was forced to suspend operations in Bangladesh within days of its launch. At that time, United Airways and GMG Airlines also had to deal with the extreme economic crisis.

Given the current situation, if the price of jet fuel cannot be controlled, the aviation sector will be severely damaged. And if the aviation sector is damaged, the revolving tourism sector of Bangladesh will be severely disrupted. All the airlines around the world have been severely damaged during the Kovid period.

Governments and government agencies of every country have come to the side of airlines and tourism companies to keep aviation and tourism alive. I have seen various activities including various incentives, subsidies, waivers of charges. But in our Bangladesh, the opposite is true. During the Corona epidemic, requests from airlines to reduce excessive aeronautical and non-aeronautical charges were ignored.

Increasing the price of jet fuel from time to time, adding airport development fees, security charges has threatened the aviation sector. The price of jet fuel is determined by Bangladesh Petroleum Corporation as well as diesel and kerosene. It also determines the price of octane, petrol, LP gas and marine fuel. Sadly, the price of diesel and kerosene mentioned on the website of Satya Bangladesh Petroleum Corporation was last fixed on November 4, 2021 and octane and petrol were fixed on April 24, 2018. LP gas was fixed on May 16, 2021 and even marine fuel was priced at Rs. On 2022.

However, the price of jet fuel has been fixed more than fifteen times since September 2020, which is very sad. It is important for all concerned to make a well-thought-out decision on pricing for jet fuel to secure the future by properly understanding the present. In this case, it is very important to keep the aviation industry afloat by adjusting prices with subsidies if necessary.

Otherwise, the market share of Bangladesh's international routes will go to foreign airlines. So that the airlines investing in the country will suffer. As a result, the share in GDP will be reduced from the aviation sector. Which will have an adverse effect on the overall economic situation of the country.

 

Author: Md. Kamrul Islam

General Manager-Public Relations

US-Bangla Airlines