The Civil Aviation Authority of Bangladesh (Caab) is facing a severe fund crisis as four local airlines have defaulted on their dues with the civil aviation regulator.
As of February 29, Biman Bangladesh Airlines, GMG Airlines, United Airways and Regent Airways owe 317.21 crore taka (US$38.77 million) in aeronautical and non-aeronautical charges to Caab, according to a letter that Caab wrote to the civil aviation and tourism ministry.
The aviation regulator asked the ministry to take action against the airlines as they failed to pay the dues even after several reminders.
Meanwhile, the office of the Comptroller and Auditor General raised its objection in its audit report and said the Caab failed to make any progress in recovering its dues.
Caab's efficiency was also questioned by the parliamentary standing committee on public accounts, and the panel sought explanations from the aviation authority.
The financial health of the aviation authority eroded and its net profit came down to 155.53 crore taka ($19.01 million) in 2010-11 from 291.22 crore taka ($35.59 million) in 2009-10, according to Bangladesh Economic Review 2011.
Caab has dues of 226.88 crore taka ($27.73 million) in aeronautical charges and 90.33 crore taka ($11.04 million) in non-aeronautical charges with the local airlines.
Biman Bangladesh, the national flag carrier, is the biggest defaulter with 255.3 crore taka ($31.20 million). GMG Airlines that shut its operations in March is the second largest defaulter with debts of around 51 crore taka ($6.23 million). United Airways and Regent Airways will have to pay 10.92 crore taka ($1.33 million) and 2.63 lakh taka ($3,214).
Aeronautical charges mean the charges that are directly related to the operations of an aircraft at the airport. The amount includes landing and parking charges, air navigation fees, cargo handling charges, fuelling charges, security and passenger charges.
Non-aeronautical revenues come from activities that are undertaken on top of this core business, such as retail, parking, other concessions and rentals. At medium and large airports, this revenue may account for more than 50 per cent of the total income.
Biman that is now struggling hard to overcome its own losses seeks to pay the dues to the Caab in phases, said a senior official of the airline.
“We have taken steps to settle down the issue amicably as soon as possible. It may take a little time to pay the total dues to the Caab, but we will certainly pay the dues,” said the official, preferring not to be named.
GMG Airlines is reshaping its workforce due to poor financial health of the carrier. Now the company plans to employ people only to maintain its two McDonnell Douglas MD-80s and two Bombardier Dash-8s, said Asif Ahmed, director for marketing and customer experience of the airlines.
He said the airliner met Caab in March and paid an instalment of the due. But he did not say what the amount was.
Apart from this, Imran Asif, chief executive of Regent Airways, said his company has no due with the Caab now. “Some outstanding amount was not adjusted when the Caab issued the letter in March. Now those amounts have been adjusted and we have no dues whatsoever with them.”
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