Foreign airlines cut flights as dollar crunch ties up their earning

Travel agents’ association writes to the civil aviation ministry to resolve the crisis
Turkish Airlines usually operates 14 flights weekly in Bangladesh through various international routes. But, the airline has been operating only seven flights a week since November last as it cannot remit around $24 million in proceeds from ticket sales from Bangladesh to Turkey. The money is deposited in local banks in Bangladeshi currency. A representative of the Bangladesh Bank said they can do nothing about the situation.
Like the Turkish airlines, most other foreign airlines including Singapore Airlines, Malindo Air, Kuwait Airways, and Cathay Pacific have slashed their flight frequencies to and from Bangladesh over the same issue, according to the Association of Travel Agents of Bangladesh (Atab).
Meanwhile, Bangladesh by withholding $208 million of airline funds for repatriation ranks third in the world – after Nigeria and Pakistan – to, reportedly, use the funds to shore up its depleted reserves amid the global dollar crisis, according to an International Air Transport Association (IATA) press statement released on 7 December.
The IATA calls on governments to remove all barriers to airlines repatriating their revenues from ticket sales and other activities, in line with international agreements and treaty obligations.
Fund repatriation by foreign airlines operating in the country has remained suspended since March 2022.
Moreover, the carriers are having to pay for refuelling their aircrafts in Bangladesh by bringing in dollars through inward remittances, although their outstanding money is deposited in various banks in Bangladesh.
“Since we have a huge amount of money stuck, we have reduced the capacity. The reduction started in November,” Sattar Siddique, head of sales and marketing at Turkish Airlines told TBS.
“Our head office is in Turkey. So, we have to remit to Turkey what is left here after meeting all expenses. About $24 million has been stuck since last March. The Bangladesh Bank says they do not have dollars at the moment, so they are not able to remit,” he added.
Explaining how they face loss in sending money, he said, “We sell tickets in Bangladesh at a rate that is fixed by Bangladesh Airlines through the International Air Transport Association (IATA). It takes us a long time to prepare the documents and remit the proceeds. Ultimately when it comes to remitting, we are having to pay Tk106 for sending $1 dollar although when we sold the tickets the dollar rate was Tk85. This is one way we are incurring losses.”
They now have to pay fuel bills in dollars, which is another problem for foreign airlines, noted Sattar, adding, “Earlier, we used to pay it [fuel bill] in taka, but we were asked to pay it in dollars several years ago.”
Kazi Dilrose, traffic officer of Kuwait Airlines, told TBS, “Earlier, we operated 12 flights a week. But for the past one month, the number has decreased to 10 flights.”
However, she did not want to say anything about the reason for reducing the number of flights.
Apart from these two airlines, Singapore Airlines cut its flights from Dhaka from 10 to seven per week while Malindo Air and Cathay Pacific each cut flights from five to one.
Against such a backdrop, Atab wrote to the civil aviation and tourism ministry seeking its intervention to resolve the crisis.
Officials of other airlines also said they were facing these problems for a long time.