Air Travel Will be Incurring Additional Expenses From January 1

The Civil Aviation Authority of Bangladesh (CAAB) has proposed an increase in the development and passenger safety fees at the country’s airports.

This proposal is set to take effect on January 1, 2024. If implemented, it will result in higher costs for air travellers. The decision is influenced by the recent fluctuations in the exchange rate of the US dollar.

Letters have been sent to the Ministry of Civil Aviation and the Ministry of Finance in the form of a proposal to finalize the decision taken at the board meeting of CAAB last month. According to the decision of the board meeting of CAAB, the airport development and passenger security fee for SAARC countries has been proposed to be BDT 1540 instead of BDT 1199. In the case of other countries, it has been proposed to increase this fee from Tk 2800 to Tk 2800, and for domestic passengers, the fee is to be Tk 250 instead of Tk 170.

Private airline officials have pointed out that an increase in airport fees would result in higher ticket prices for passengers. In essence, this means that the cost of travel for passengers would rise.

It has been proposed to determine the fare of passengers and goods from Bangladesh by all domestic and foreign airlines in local currency from January 1. On the other hand, airport development and security fees are being collected in US dollars for passengers using Bangladesh airports for international routes. In order to coordinate the currency management in the two cases, the Ministry is directed to send a proposal to fix the fees in Bangladeshi taka instead of the existing two US dollars. In view of this, CAAB has proposed to increase the fee.

According to the proposal, the airport development fee and passenger security fee were Tk 937 as per the dollar rate of Tk 85.20 in August 2020 for passengers from SAARC countries. In August 2023, considering the dollar rate at Tk 109 and inflation of 13%, the port development fee and passenger security fee became Tk 1199 in Bangladeshi taka. This fee will be Tk 1540 until 2025, considering the average inflation of about 13%. August 2020 for passengers outside SAARC countries The airport development fee and passenger security fee were Tk.1704 at the dollar rate of Tk.85.20.

In August 2023, taking into consideration the dollar rate of Tk 109 and inflation of 13%, the port development fee and passenger security fee became Tk 2180 in Bangladeshi taka. This fee will be Tk 2800 until 2025, considering the average inflation of about 13%. For domestic passengers, the airport development fee and passenger security fee were Tk 170, according to the dollar rate of Tk 85.20 in August 2020. In August 2023, considering the dollar rate of Tk 109 and inflation of 13%, the port development fee and passenger security fee became Tk 170 in Bangladeshi taka. This fee will be Tk 250 until 2025, considering the average inflation rate of about 13%.

It is known that according to the dollar exchange rate set by Bangladesh Bank on August 28, 2023, if the airport development fee and passenger security fee are levied, the fee for the passenger from the SAARC country is 1445 taka, the fee for the passenger outside the SAARC country is 3000 taka, and the domestic passenger fee is 170 taka.

A look at the value of the dollar shows that it has increased in value by about 13% annually from 2021 to 2023. If the fee is fixed in rupees instead of two dollars and if the dollar appreciates in the future, there is a possibility that the amount of fees collected in this sector will decrease in the future. Due to this, in the future, the value of the dollar can be increased to take inflation into account. The decision to fix the fee at the proposed rate was taken at the board meeting of CAAB.

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