TDS Desk:

The International Air Transport Association (IATA) has urged the Bangladesh government to reconsider proposed airfare control measures, warning they could restrict consumer choice, weaken air connectivity and affect the efficiency of the aviation sector.

In a letter dated 14 January to Nasreen Jahan, secretary of the Ministry of Civil Aviation and Tourism, IATA expressed concern over a proposal to include Section 43A in the Civil Aviation (Amendment) Ordinance 2026, which would require airlines to submit fare details to regulatory authorities.

While acknowledging the government’s objective of ensuring fair pricing and protecting consumer interests, the association cautioned that the provision could effectively operate as an indirect form of price regulation, an approach it said is inconsistent with internationally accepted aviation regulatory practices.

IATA sought clarification on whether the fare submission requirement is intended for information purposes only or as a regulatory tool. It warned that if used for intervention, the mechanism could disrupt market-based pricing in an industry that is highly competitive and sensitive to demand fluctuations.

Reiterating its support for pricing freedom, IATA noted that since the global deregulation of air transport in the late 1970s, real airfares have declined by more than 50% worldwide, expanding passenger access and choice.

It said dynamic pricing allows airlines to manage high fixed costs, fluctuating demand and the time-sensitive nature of seat inventory.

The association warned that regulated fares would limit airlines’ ability to respond to market conditions, potentially leading to higher baseline prices, reduced service quality and the withdrawal of less profitable routes, which would disproportionately affect cost-conscious travellers.

It also cautioned that government-imposed price caps could result in capacity constraints and discourage investment, ultimately creating inefficiencies and losses in economic welfare.

Referring to international practice, IATA said airlines in most countries set fares based on commercial considerations, including under Bangladesh’s 2013 Open Skies agreement with the United States.

It argued that advance reporting or approval of fares would significantly reduce commercial flexibility and weaken air connectivity.

On regulatory governance, IATA welcomed the proposal to form an advisory board to oversee aviation-related charges, saying any levies should be transparent, cost-related and non-discriminatory, in line with International Civil Aviation Organization principles.

Calling on the government to revisit the proposed provisions, IATA said preserving fare-setting freedom is essential to maintaining competition, protecting passengers and ensuring sustainable growth in Bangladesh’s aviation sector.

The letter was signed by Sheldon Hee, IATA’s regional vice president for Asia-Pacific, and copied to the chairman of the Civil Aviation Authority of Bangladesh and the Bangladesh Association of Airlines.