Fare too high to fly

Air travellers, including migrant workers or those preparing to perform the Umrah, are in for a shock. Airfares are now reaching dizzying heights. 

In the last month and a half, airfare in different crowded international routes like the Middle East and Malaysia jumped again, almost touching the fare during the Covid-19 pandemic. 

The fare for the Dhaka-Jeddah route has climbed to Tk75,000-Tk80,000, up from a maximum of Tk50,000 just two months ago.  

Rising demand for air travel amid the peak Umrah season, the rebound of the Malaysian labour market and the upcoming Eid season have all pushed up the airfares, according to travel agents and recruiting agencies.

These, however, are among several reasons being identified. Others include reduction of flights by foreign airlines, a ticket syndicate feeding into high black market prices and a higher price charged by Bangladesh Biman, the national carrier. 

"If the fare on the Dhaka-Jeddah route is Tk70,000 in Fly Dubai, it will be Tk90,000 in Bangladesh Biman. And for Umrah passengers, if the fare is Tk90,000 taka [round trip] in Fly Dubai, it will be Tk1.30 lakh in Bangladesh Biman," Mahmudul Haque Piaru, proprietor of travel agency Haque International told The Business Standard.

He said the airfare in European and American routes remained unchanged, though it has increased in Middle Eastern and Malaysian ones. 

Abdul Salam Aref, general secretary of the Association of Travel Agents Bangladesh (Atab), said, "When Bangladesh Biman increases the fare, other airlines follow suit. And there is no limit… they can increase the fare as they wish," he added.

Besides the major airlines, budget carriers, such as Air Arabia, Fly Dubai, and Salam Air, charge only Tk500-Tk1,000 less than their premium counterparts. 

"They had projected before the government that they would take passengers from Bangladesh to other destinations at a cheaper fare. As there is no monitoring by the regulatory body, they are charging whatever they wish," Aref said.

Biman's Managing Director MD Shafiul Azim told TBS, "The allegation that other airlines increase fares because of us is not correct. Rather, in many cases, other airlines object to why we charge low fares."

Explaining the pricing model of the Hajj flight, he said, "In 2023, taking into account the increased exchange rate of the dollar, the increase in the price of jet fuel, and the increase in taxes by the governments of both countries, the air fare for Hajj pilgrims this year has been fixed at Tk1.97 lakh, up from Tk1.40 lakh last year," he said.

He further said Biman couldn't provide services while incurring losses during the current financial crisis.

Meanwhile, the airfare has also doubled and tripled for the Dhaka-Kolkata route centring on the upcoming Eid, according to airline operators.

They believe that travel to India has increased due to upcoming Eid, medical and post-Covid opening up. A round-trip ticket now costs Tk16,000-Tk40,000.

Previously, the fare had never exceeded Tk20,000 for a round trip, according to airline operators.

Novo Air Head of Sales and Marketing Mesbahul Islam told TBS, "The Dhaka-Kolkata route is one of our daily flights. Despite the increase in fares, we are selling single trips at Tk8,000-11,000 and round trips at Tk 16,000-17,000."

A top executive of a general sales agent of at least seven foreign airlines operating in Bangladesh, requesting anonymity, told TBS, "Besides the demand-supply issue, there is an imbalance between outbound and inbound passengers in Bangladesh. I work with a foreign airline that takes 90% of passengers from Bangladesh but can only bring 30% maximum on arrival."

About allegations of airlines increasing prices fares by too much, he said, "In the global context, ticket prices are now higher worldwide than the pre-Covid period and it is slightly higher in Bangladesh. But fares may come down after Eid."

According to an expert, a flight from Bangladesh to a destination country often costs more than a flight from that country to Bangladesh.

For instance, the airfare for the Dhaka-Muscat route is Tk80,000 now. However, a Muscat-Dhaka-Muscat ticket would cost Tk55,000.

Meanwhile, amid the price hikes, which started to climb gradually in January, passengers now opt for cheaper flights with layovers or connecting flights in spite of the longer travel. 

Turning to transit

Abu Taher, 32, from Shariatpur, is scheduled to fly to Saudi Arabia on March 23 this year. 

He confirmed his ticket with Indigo Airlines three days ago. Instead of a direct flight, he got one with a transit: Dhaka-Delhi-Dammam. 

While the flight time will be more or less the same, he will have to queue up more times and it also comes with a waiting period to catch the connecting flight. But that would be more than compensated with the Tk65,000 airfare. A direct flight would cost higher. 

Saving some money is preferable to Abu Taher, like many, over comfort and convenience.

Migrant workers hit most

Migrant workers have been disproportionately affected by the painful fare hike.

Bangladesh sent 2.13 lakh workers in the first two months of this year, most to countries in the Middle East and Malaysia, according to the Bureau of Manpower, Employment and Training (BMET). 

The number of Malaysia-bound workers has gradually increased since last August, after a four-year hiatus, as the country accepted more than 29,000 workers in February this year. 

After the workers started going to Malaysia, the Dhaka-Kuala Lumpur fare suddenly jumped to Tk80,000 a few months ago, say travel agents.

Many airlines started to fly passengers to Kuala Lumpur with transit flights in Bangkok, Colombo or other cities. This reduced fares to between Tk30,000-Tk40,000. 

The fare for flights with stopovers, too, has risen to around Tk50,000 since January, almost double the pre-Covid fare.

"Why this difference can be answered only by those who allow airlines to operate flights," said Association of Travel Agents Bangladesh (Atab) General Secretary Aref. 

Airlines, however, claim that there are several reasons behind the fare hike.

High costs

Airlines say rising operational costs have resulted in adjusting airfares. 

"Jet fuel prices began to rise in October 2020. The price per litre that month was Tk46. Now it is Tk118. It is impossible to expect pre-Covid prices now," Md Kamrul Islam, US-Bangla's general manager (marketing support and public relation), told TBS. 

He also said high demand was another factor.

"Especially on the Malaysia route, the passenger demand is three to four times the seat capacity. Now every seat is sold within six hours," he added.

He said the fare inflation would continue until seat capacity and flight frequency were increased.

Currently, many foreign airlines have slashed their flight frequencies to and from Bangladesh as they cannot remit money in proceeds from ticket sales from Bangladesh due to the dollar crunch. 

US-Bangla's Kamrul also said, "All domestic and international routes have 10-12 segments according to fares. Low fares on these routes are no longer available due to high demand," he said, adding, "Although many airlines sell tickets at group fares, we do not."

Group fares have also been identified as a reason behind the hike in ticket prices. This reason, however, is more nefarious than others.

Black market woes

Allegations have emerged of an "artificial crisis" of tickets created by a syndicate of travel agents. This crisis has pushed up the cost of tickets, say industry insiders.

Labour recruitment agencies typically send workers abroad by groups and they get what is known as "group fare". 

Mizanur Rahman, finance secretary of the Bangladesh Association of International Recruiting Agencies (Baira), told TBS, "Some unscrupulous agencies show photocopies of passports of expatriate workers from airlines to buy group tickets and create a shortage.

Then they change the names on the tickets and sell them at higher prices. 

"Basically those who work as travel agents and manpower agents at the same time are involved in these syndicates," he added.
How Umrah season affects ticket fare 

Travel agents said the airfare was still high for Saudi Arabia as people have been going to the country to perform Umrah, pushing up the demand and thus the ticket price. 

The surge of passengers has also created pressure on other Middle Eastern routes for connecting flights to Saudi Arabia.

"For example, Riyadh, Dubai, Muscat, Bahrain routes also reach peaks as Umrah passengers join regular ones," Akbar Ali,  a travel agent and proprietor of the Hajj agency At-Tyaara Travels International said.  

An Umrah ticket for a direct flight (round trip) from Dhaka is Tk1.08 lakh- Tk1.10 lakh, up from Tk80,000 a month ago. 

On some flights, it has gone up to Tk1.20 lakh. 

For flights with transit, the fare comes to around Tk95,000-Tk1 lakh.

Although Umrah can be performed all year round, most pilgrims from Bangladesh undertake the journey from November-April, according to the Hajj Agencies Association of Bangladesh.

Typically, around 1 lakh pilgrims perform Umrah in Ramadan.     

Like Umrah pilgrims, Hajj pilgrims in Bangladesh also have to bear high airfare this year which has reduced the number of hajj-registration. 

Md Tipu Sultan, joint secretary of Baira and president of Recruiting Agencies Oikkya Parishad, told TBS, "Basically due to the dollar crisis, some airlines have reduced flights. In contrast, Biman Bangladesh Airlines does not have the capacity to deal with the crisis by operating more flights, as they operate only 8% of the total flights."

Airfares to Middle Eastern routes started to edge up at the end of 2020 as air travel resumed after months of Covid-led suspension.

All local and foreign airlines with international flights doubled or tripled ticket prices, while airfare for other South Asian countries remained unchanged, according to travel agents.