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Government slashes airline surcharge to 14.25pc

FE REPORT | January 24, 2026 00:00:00


The government has significantly reduced the annual airport surcharge rates for airlines, lowering the maximum penalty from 72 per cent to about 14.25 per cent to ease financial pressure on struggling carriers and align charges with regional standards.

Under the amended rules, no surcharge will be imposed if outstanding bills are cleared within 30 days.

A 1.0 per cent surcharge will be applied for delays of 31 to 60 days, which will increase to 1.25 per cent for delays of 61 to 120 days.

If payments remain overdue beyond 120 days, a 6 per cent surcharge will be imposed for every subsequent 120 days or part thereof.

The Ministry of Civil Aviation and Tourism recently issued a notification in this regard.

The revised surcharge framework will apply to airlines operating at eight airports across the country.

Previously, airlines were subject to a 6 per cent monthly surcharge on overdue payments under the Civil Aviation Rules 1984, resulting in penalties equivalent to 72 per cent of the principal amount after one year, often making recovery financially unviable.

Industry insiders say the decision comes at a critical time as at least three domestic airlines suspended operations in recent years, largely due to mounting debt driven by accumulated surcharge penalties.

While the reduction may not immediately translate into lower airfares, they expect improved financial stability to strengthen competition and service quality over time.

Mofizur Rahman, general secretary of the Aviation Operators Association of Bangladesh (AOAB) and also managing director of Novoair, told The Financial Express the reduction would alleviate financial stress on the airlines and improve their ability to provide better services to passengers.

Md Kamrul Islam, spokesperson for US-Bangla Airlines, welcomed the government move, saying the revised rates would substantially reduce payment pressure on airlines.

He noted that high surcharge levels in the past were one of the main reasons for pushing several airlines out of operation as it made clearing outstanding bills difficult for those carriers.

Five operational and defunct airlines owed the Civil Aviation Authority of Bangladesh (CAAB) Tk 73.51 billion in cumulative debts until June 2025.

Of the overdue amount, about Tk 57.66 billion was surcharge, while the remainder was original debt, including VAT and tax, according to CAAB documents. Local airlines are bound to keep aircraft stationed at Hazrat Shahjalal International Airport in Dhaka around the clock.

Foreign carriers, by contrast, typically operate a single flight and depart within hours, making them less exposed to surcharge penalties.

The government notes that Bangladesh's earlier surcharge rates were significantly higher than those in neighbouring and regional markets, where annual rates range from 12 to 18 per cent in India, 8 per cent in Singapore, 10 per cent in Oman, and 2 per cent in Pakistan.

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