Biman Bangladesh Airlines has increased the prices of all domestic and international tickets by 10 percent from January to – what it says – minimise the gap between its revenue and operational costs.
The hike is the first since 2010, but it also comes at a time when ticket prices are falling globally amid rise in the number of air travellers, the market getting more competitive and declining fuel costs.
Talking to The Business Standard, Biman's Managing Director Md Mokabbir Hossain claimed that in spite of the hike the carrier's ticket prices are still lower than what other airlines are offering.
Low ticket price in comparison to other carriers was a major cause of loss for the organisation, he added.
The Business Standard, however, did not find much difference between Biman's ticket price and those of other carriers.
An economy class ticket of Biman Bangladesh Airlines from Dhaka to Bangkok is between Tk18,000 and Tk 19,000, whereas the price of a local private carrier's ticket for the same route is between Tk15,000 and Tk16,000 and an international carrier's ticket is between Tk22,000 to Tk23,000.
In November last year, Biman launched a mobile app and is currently offering a 10 percent discount on all ticket purchases through the app.
According to industry experts, Biman is still a comparatively low-cost carrier despite the surge in ticket prices.
Biman defended the price hike saying the national flag carrier's investments have increased significantly in the last decade, including expansion of its fleet size, higher salaries of employees and improved services for its customers.
In addition, the prices were revised because travel agents are reluctant to sell Biman tickets due to its low cost, claimed a senior executive of Biman Bangladesh Airlines.
The management decided to increase the ticket price to bring balance with other carriers, he added.
Statistics revealed that average global airfare grew by 12.2 percent in 2010. However, the growth fell between 2012 and 2014, and then grew again by 2-3 percent since 2017.
George Robertson, general manager of Singapore Airlines, Bangladesh, said the average global airfare has remained stable for the last few years amid rising competition in the aviation industry.
Singapore Airlines, which has been operating in Bangladesh since 1986, saw a slight reduction in airfare last year, Robertson told The Business Standard, adding that airlines are trying to make flights cheaper by using modern fuel-efficient aircraft.
Meanwhile, air transport costs halved in the past 20 years, according to the International Air Transport Association.
The national flag carrier saw a rapid expansion of its fleet in the recent years with the inclusion of six Dreamliners in 2019. It is now planning to purchase four additional Dreamliners and two Dash-8 aircraft.
Biman brought massive changes in the ticketing system by fully automating it and this multiplied its ticket sales and contributed to the revenue, said an official.
The national flag carrier earned a net profit of Tk218 crore in 2018-19 fiscal year.
Earlier in 2018, the aviation ministry launched an investigation in Biman Bangladesh Airlines following allegations of corruption.
Following the investigation, Biman's managing director AM Masaddique Ahmed was removed in May last year on charges of corruption in ticketing and other sectors.