Excessive airport surcharge buries airlines under debt
It has made it mathematically impossible for struggling carriers to ever clear their accrued debts
Highlights:
- Bangladeshi airlines face Tk7,351 crore debt to CAAB
- 72% annual surcharge far higher than regional averages
- Three carriers grounded; surcharges worsen financial collapse
- Biman owes Tk6,068 crore, mostly surcharge, despite profits
- Airlines demand reduced surcharges to clear impossible debts
- Government considering lowering surcharge rate to 18%
Local airlines in Bangladesh are being crushed by punitive airport surcharges—levied at a rate up to six times higher than regional levels—which have driven their total outstanding dues with the Civil Aviation Authority of Bangladesh (CAAB) to a staggering Tk7,351.45 crore.
The airlines warn that this debt burden is unsustainable, has grounded three carriers, and prevents others from clearing payments and maintaining operations. CAAB data reveals that 78% of the total outstanding amount, or around Tk5,734 crore, comprises these penalties.
As of last fiscal year, FY25, the nation's five public and private airlines—Biman Bangladesh Airlines, Novo Air, United Airways, Regent Airways, and GMG Airlines—owe CAAB Tk7,351.45 crore
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The surcharge disparity
While airports in neighbouring countries like India and Pakistan impose annual surcharges of 12-18% and 2% respectively, Bangladesh imposes a crushing 72% annual surcharge (6% per month) on late payments of aeronautical bills. Other regional rates include 8% in Singapore and 10% in Oman.
This excessive rate applies to six types of charges CAAB collects for services, including runway use, control room, aircraft parking, and terminal facilities across the country's eight airports.
"Due to passenger shortages and other complications, airlines often fail to pay bills on time," said Md Kamrul Islam, spokesperson for US-Bangla Airlines. "CAAB then imposes a 6% monthly surcharge. In neighbouring countries, this rate is just 1% per month. Lowering it would at least help them survive."
Airlines Operators Association of Bangladesh (AOAB) Secretary General Mofizur Rahman echoed the demand, saying, "The surcharge was originally intended to encourage quick payment, but has instead backfired."
It has made it mathematically impossible for struggling carriers to ever clear their accrued debts.
Shah Amanat International Airport's Public Relations Officer, Engineer Mohammad Ibrahim Khalil, said: "Airports collect six types of aeronautical charges and four types of non-aeronautical charges. Huge dues have accumulated because these charges are not paid regularly. We send letters to the airlines regularly."
"We set deadlines for payment. Some airlines do not pay at all, while others may pay around 50% of the dues. Because full payments are not made, the amounts have accumulated over time. A decision will be made on what legal steps to take to recover the outstanding dues," he added.
The staggering debt breakdown
As of last fiscal year, FY25, the nation's five public and private airlines—Biman Bangladesh Airlines, Novo Air, United Airways, Regent Airways, and GMG Airlines—owe CAAB Tk7,351.45 crore.
The crisis is most acute for the state-owned flag carrier, Biman Bangladesh Airlines, which accounts for the vast majority of the debt: Tk6,068.54 crore. Crucially, Tk4,794.13 crore of this amount is pure surcharge, with the principal bill only being Tk745.52 crore.
Similarly, for private carriers, surcharges represent the largest portion of their dues. Three of these carriers—United Airways, Regent Airways, and GMG Airlines—have already suspended operations, with high surcharges cited by industry insiders as a key compounding factor alongside weak management, high jet fuel costs, and limited capital.
- United Airways: Shutdown in 2016 with a principal debt of Tk57 crore. With accumulated penalties, the total dues ballooned to Tk391.34 crore, ultimately crushing the carrier's attempts to secure a restart.
- Regent Airways: Owes Tk454.61 crore, of which Tk284.33 crore is surcharge.
- GMG Airlines: Owes Tk411.81 crore, with Tk353.01 crore in surcharge.
"United had proposed to pay the principal debt of Tk57 crore, but the finance ministry rejected the proposal," said Kazi Wahidul Alam, an independent director at the grounded airline. "As a result, under the pressure of accumulated surcharges, United's dream of returning was permanently crushed."
Biman sees record profit despite heavy airport dues
Despite announcing a record profit of Tk937 crore last fiscal year, Biman Bangladesh Airlines owes more than Tk3,691 crore to Hazrat Shahjalal International Airport in Dhaka as of July this year. Similarly, it owes over Tk1,786 crore to Shah Amanat International Airport in Chattogram.
Biman's immediate past spokesperson ABM Rowshan Kabir told TBS, "About 79% of the outstanding amount airports claim from us is surcharge. We have not paid these additional surcharges on old bills because we do not agree with them."
He added, "Our current bills are paid regularly. Discussions are ongoing regarding the old bills, and they will be settled in instalments once both sides reach an agreement."
When asked how Biman reports profits despite these dues, Rowshan Kabir explained, "After deducting expenses from total revenue, the company records a profit. Profit does not mean there are no liabilities. Assets and liabilities coexist, and as long as revenue exceeds expenses and liabilities are managed on time, the company is considered profitable."
CAAB acknowledges issue, reduction under consideration
The accumulated debt is concentrated at the country's two main hubs: Hazrat Shahjalal International Airport in Dhaka (over 50% of dues) and Shah Amanat International Airport in Chattogram (around 29%).
Acknowledging the long-standing demand from airlines, CAAB Board Member (Admin) S M Lablur Rahman told The Business Standard that the government, which sets the rate, is now considering a significant reduction.
"The long-standing demand for a reduction is now under final consideration—potentially bringing it down to 18%," Rahman said.
However, he cautioned that CAAB does not have the authority to waive the old, accumulated surcharges; airlines must seek government approval for that, leaving the question of how the Tk5,734 crore in penalties will be settled still open.
