The Ministry of Civil Aviation and Tourism has waived all aviation charges for both local and foreign airlines operating in Bangladesh to support the ailing aviation sector.
This decision came at a meeting between the aviation ministry and the Civil Aviation Authority of Bangladesh (CAAB) held at the secretariat on Tuesday.
Aviation, the sector that is the most-affected by Covid-19 at present because it was the first to go out of operation with the pandemic outbreak, receives such a waiver from the government for the first time, after demanding for it since March.
According to the decision, aeronautical charges for domestic flights have been waived fully until 2021 and 50 percent for international flight operations until December this year.
Non-aeronautical charges have been completely waived for all until December this year.
Confirming the matter, Md Mohibul Haque, senior secretary to the civil aviation ministry, said the decision to waive these charges was sent to the Ministry of Finance for final approval as there are VAT-related issues to be considered.
The National Board of Revenue (NBR) collects 15 percent value-added tax (VAT) on aeronautical charges.
The CAAB levies the charges for providing aeronautical services such as landing, parking, route navigation, boarding bridge and embarkation facilities to airlines for both international and domestic flights. Non-aeronautical charge includes outlets for operators in the airport.
An airline has to payTk3,700 per domestic flight with a Dash-8 as aviation charges, according to the CAAB. In case of international flights, aviation charges vary on the size of aircraft from minimum Tk1.16-Tk5 lakh per flight.
The CAAB earns around Tk90 crore to Tk100 crore per month from airlines from aviation charges, but in March, its revenue dropped to almost zero due to flight suspensions amid the coronavirus crisis.
Meanwhile, welcoming the decision, Biman Bangladesh Airlines Managing Director Md Mokabbir Hossain said it will reduce operational costs.
"When airlines are going through such a severe financial crisis and also cutting jobs to minimise operational costs, this waiver will give them some relief," he added.
Biman incurred losses of around Tk400 crore in March this year.
The national carrier has been bearing operational costs by taking a Tk1000 crore loan from the Sonali Bank under a stimulus package announced by the government.
US-Bangla, the largest private carrier in the country, incurred losses of Tk600 crore since March, said its managing director Mohammed Abdullah Al Mamun.
The carrier has sought a loan from a private bank under the stimulus package to run operations, he said.
There are 24 international airlines operating in Bangladesh, out of which four are local.
Regent Airlines, a local private airline, has already suspended its operations for three months due to the financial crisis caused by the pandemic outbreak.
Meanwhile, the International Air Transport Association (IATA) has projected that Bangladesh will see a 37 percent fall in passenger traffic this year – the fourth highest in South Asia.
India, Sri Lanka, Pakistan and Maldives are set to see the highest impact with above a 40 percent drop.
Bangladesh will see a revenue loss of $842 million, or Tk7,000 crore, in 2020, said the IATA. The country will lose 4.22 million passengers this year, impacting 47,200 jobs in the aviation industry.
The IATA said Australia, New Zealand and Singapore have announced a substantial package of measures to support their aviation industries.
"But others in the region, including India, Indonesia, Japan, Malaysia, the Philippines, the Republic of Korea, Sri Lanka and Thailand, have yet to take decisive and effective action."