NovoAir (VQ, Dhaka) Managing Director Mofizur Rahman has slammed a recent 18% overnight jet fuel increase by state-owned supplier Padma Oil Company Limited, warning the Bangladeshi private airline sector would never be viable if this continues.
In a social media post, Rahman also had a go at Biman Bangladesh Airlines (BG, Dhaka), blaming it for NovoAir being forced to take "a suicidal journey" of having to drop its fares to retain domestic market share against the state-owned carrier.
As reported, Rahman has been outspoken about Biman Bangladesh Airlines operating state-subsidised flights enabling it to reduce ticket prices, while the country's private airlines are battling to compete while faced with exorbitant aviation fuel hikes.
Rahman is also General Secretary of the Aviation Operators Association of Bangladesh (AOAB), representing the country's private airlines, which has formally complained to the government about the anti-competitive state of the local aviation sector.
In a July 7 letter shared by Rahman on social media, Padma Oil Company advised that the price of Jet A1 would jump overnight to BDT130 taka (USD1.22) per litre at Dhaka, Chittagong, and Sylhet airports. Rahman said that this represented an 18% price hike against a backdrop of a 7.69% increase in the aviation fuel price index in the international market.
"We are going down with [our] fare in competition to grab the market share of domestic passengers. A suicidal journey we are forced to take by our national carrier Biman, which has no book of accounts to keep.
"Airlines are at the whims of [the] sole fuel supplier Padma (BPC) who charges at least 50-60% higher price [compared to the] world average. When [the] fuel price drops in the international market, then [the local price] is not adjusted accordingly.
"You need 20-25% extra to pay for fuel for domestic flights. If this is the way forward, then Bangladesh is never going to have viable private sector airlines," he said.
Biman Bangladesh Airlines was not immediately available for comment.
