IATA Issues Stern Warning to Bangladesh Over Proposed Airfare Price Caps

In a formal letter recently sent to Nasrin Jahan, Secretary of the Ministry of Civil Aviation and Tourism, IATA expressed "deep concern" regarding the proposed "Civil Aviation (Amendment) Ordinance 2026."

IATA pointed out that the proposal to regulate airline fares under Section 43-A of the ordinance directly conflicts with free-market economic principles. The organization noted that since the liberalization of the aviation sector in the late 1970s, global airfares have decreased by more than half.

The letter cautioned that if the Bangladesh government sets a maximum price ceiling (cap), it could create an artificial market crisis. Such a move may discourage airlines from making new investments and lead to a shortage of seat capacity, which could ironically drive up the minimum ticket prices.

IATA further stated that without commercial flexibility, many airlines might be forced to suspend flights on less profitable or marginal routes, damaging the country's service quality and connectivity.

The organization also raised concerns regarding the proposed advisory board's power to impose various levies and charges. IATA emphasized that any charging process must be transparent, cost-based, and non-discriminatory, in strict accordance with the policies set by the International Civil Aviation Organization (ICAO).

Urging the Bangladesh government to reconsider the proposed provisions, IATA asserted that maintaining fare-setting freedom is essential for a robust and sustainable aviation sector.