The global airline body cautions that state intervention in ticket pricing could backfire, driving up fares, weakening connectivity and undermining airline viability in Bangladesh’s growing aviation market.

The International Air Transport Association (IATA) has warned the Bangladesh government that proposed airfare controls could backfire, saying state intervention in airline pricing risks harming consumers, undermining air connectivity and denting the broader economy.

In a formal letter dated January 14 to Nasreen Jahan, Secretary of the Ministry of Civil Aviation and Tourism, IATA expressed concern over Section 43A of the Civil Aviation (Amendment) Ordinance 2026, which mandates airlines to submit fare information to regulatory authorities.

IATA sought clarification on whether the proposed fare filing would be purely informational or used as a regulatory mechanism. The association argued that if filings are used to set or cap fares, the measure would amount to indirect price control—disrupting market dynamics and threatening airlines’ commercial sustainability.

Representing around 360 airlines worldwide, including Biman Bangladesh Airlines, US-Bangla Airlines and Air Astra, IATA stressed that pricing freedom is essential for airlines to manage high fixed costs, volatile fuel prices and fluctuating demand.

“Since the economic deregulation of the airline industry, average airfares have more than halved in real terms,” IATA noted, highlighting how market-driven pricing has historically benefited consumers. It warned that government-imposed fare ceilings often lead to reduced capacity, underinvestment and, paradoxically, higher minimum fares as airlines attempt to recover lost revenue.

The association also flagged risks to marginal and low-density routes, which could become commercially unviable under restrictive pricing regimes, potentially reducing connectivity to secondary cities. Service quality may also suffer as airlines face tighter revenue constraints.

Beyond airfare controls, IATA urged greater transparency in aviation charges, citing ICAO Doc 9082, which sets global standards for airport and air navigation fees. Under the ICAO framework, charges must be cost-related, non-discriminatory and developed through meaningful consultation with industry stakeholders.