The government has once again deferred the use of taka as the headline currency in fixing airfares in Bangladesh until July 2025 from this January deadline, according to officials.
In this case, the Ministry of Civil Aviation and Tourism has cited it as "time extension" to "complete the procedure to make it effective".
Stakeholders, however, expressed resentment over repeated delays in making the decision effective which, according to them, has been causing "immense financial loss" to the country.
On 16 April 2023, the ministry in a circular asked all the local and foreign airlines operating in Bangladesh to charge airfares in local currency from July 01.
Later on June 11, another circular re-fixed 01 January 2024 for executing the decision deferring the timeline by six months without citing any reason.
Moreover, on September 12, the ministry once again postponed the date until 16 January 2024. It did not mention the reason of deferral that time too.
Now, only a month ahead of making the decision effective, the ministry again deferred it until 16 July 2025.
The move to use BDT as headline currency was made to create price stability of air tickets since taka had been facing devaluations and fluctuations as US dollar price was rising continuously.
The dollar-taka exchange rate increased to Tk 108 in February 2023 from Tk 86 in April 2022. Now, it stands at Tk 119 raising fares beyond the capacity of outbound people, especially those going to the Middle East for low-paid jobs.
Higher air ticket prices had been hurting them significantly.
At one point, amid heightened demands from both travel and recruiting agencies, the ministry decided to calculate airfares in taka instead of dollar.
Contacted, a senior official at the ministry on Friday said that despite deferment of the decision several times, the Biman Bangladesh Airlines could not complete the entire procedure to date.
"In case of ticketing, Biman successfully converted airfares in local currency from dollar in its online system. But it couldn't convert cargo transportation charge in local currency until now."
The official told the FE that the ministry had made further deferment as Biman might face financial loss in case of the effectiveness of the decision in January without completing entire procedure.
Nurul Amin, vice-president, Bangladesh Freight Forwarders Association (BAFFA), says Biman has only 15-per cent market share in the domestic aviation industry, while 85 per cent is controlled by foreign airlines.
Despite this, Biman has been entrusted with the task to fix the exchange rate of airlines charge in taka from dollar, according to him.
Since then, Biman has been fixing the charge by nearly Tk 1.0 higher compared to the rates of commercial banks.
Biman makes some gain this way. However, at the same time, foreign airlines are taking away billions from the country, he told the FE.
Had there been the airline fee fixed in taka instead of dollar, air passengers and freight forwarders might not face this loss, Mr Amin said, adding that Biman was deliberately making an obstacle to fixing taka as headline currency.
BAFFA vice-president Nasir Ahmed Khan said the government was delaying in implementing a decision repeatedly, which was taken in 2023, without considering the interests of the country.
"Both passengers and cargo exporters have been incurring losses due to a delay in fixing ticket and cargo fares in taka," he added.
[email protected]
