An Analysis of Air Travel Taxes, Fees and Charges for Passengers Traveling to and from Bangladesh in Asia

Taxes, fees and charges (TFCs) in air travel, particularly for international passengers, are considered as one of the major impediments to the development of the air transport industry. As these costs are passed on to passengers on top of the base fare, a long-standing policy discourse has persisted between airlines and government authorities concerning the appropriate level of TFCs for the overall betterment of the industry. From the perspective of Bangladesh’s air transport industry, it has been argued, without any rigorous research, that the imposition of such costs on international travelers has been unreasonably high and inconsistent with international best practices and recommendations set forth by institutional bodies such as IATA and ICAO. This paper aims to provide a comparative analysis of the TFCs levied by the authorities in Asia, with a focus on Bangladesh, and sheds light on the policies in the context of established industry rules and recommendations in relations to this contention. Fourteen destinations from South Asia, East Asia, Southeast Asia and the Middle East, representing a sample of TFCs applied to journeys to and from Bangladesh, were analyzed to identify differences both in totality and in details. The study attempts to identify and measure the deviations using descriptive statistics and variance analysis. The results obtained are as follows: (i) taxes, fees and charges imposed by Bangladeshi authorities are significantly higher than those assessed by the other observed Asian countries; (ii) differences observed in the components of TFCs reveal that the Bangladeshi government’s intention to earn higher revenue from international passenger travel is pursued to a degree inconsistent with industry practices and recommendations; (iii) no discernible relationship (positive or inverse) is observed between the distance of air travel and the TFCs levied.