Bangladesh moves to overhaul aviation rules as government targets regional hub status

Dhaka : Bangladesh is preparing to overhaul its civil aviation regulatory framework and invest in airport infrastructure, maintenance facilities and passenger services as the government seeks to turn the country into a regional aviation hub and support its ambition of becoming a trillion-dollar economy by 2034.

Speaking at a policy conclave titled "World-Class Aviation for Bangladesh's Economic Development" in Dhaka on September 12, Civil Aviation and Tourism Minister M Rashiduzzaman Millat said the government is replacing the Civil Aviation Rules, 1984 with a new regulatory framework aimed at making the sector more investment- and business-friendly.

The event, organized by Bonik Barta at The Prestige of United Convention Centre in Kurmitola, brought together airline executives, aviation regulators, bankers, diplomats, academics and other industry stakeholders.

Bonik Barta Editor and Publisher Dewan Hanif Mahmud moderated the event.

New rules after four decades

M Rashiduzzaman Millat

Millat said the government has begun consultations with stakeholders as it prepares the new Civil Aviation Rules 2026.

"After nearly 42 years, we're amending the Civil Aviation Rules, 1984 and formulating the new Rules 2026," he mentioned, adding that the revised framework would address passenger service standards, aviation safety and security while facilitating private investment.

The minister mentioned Bangladesh needs to develop airport infrastructure, passenger and cargo facilities and services around airports if it wants to compete with established aviation hubs abroad.

He described airports as a country's gateway and "mirror," arguing that better management and facilities are essential to improving Bangladesh's international image.

The government is also planning an aviation master plan as part of its broader effort to develop the sector.

Third Terminal seen as hub-building opportunity

Humaiun Kobir

State Minister for Foreign Affairs Humaiun Kobir said Bangladesh is moving toward a more open aviation policy and wants to create a business-friendly environment for airlines and other stakeholders.

He added negotiations with a Japanese consortium over operating Hazrat Shahjalal International Airport's Third Terminal are nearing completion. The government expects the agreement to provide Bangladesh with a larger revenue share than the arrangement agreed under the previous administration.

According to Kobir, the terminal is expected to have a soft opening in December and become fully operational around March or April.

Once operational, the terminal is expected to handle up to 12 million passengers annually, he further mentioned.

Kobir also added the country also needs stronger ground-handling services, larger airline fleets, aviation training facilities and better cargo infrastructure to establish itself as a regional hub.

"We need to increase our network. Cargo has potential. We need to utilize it," he noted, adding that Bangladesh also plans to develop domestic MRO capabilities.

Airlines seek lower costs, fairer competition

Abdullah Al Mamun

US-Bangla Airlines Managing Director Md Abdullah Al Mamun said high taxes, fuel prices, ground-handling costs and congestion at Dhaka airport are putting pressure on airlines and passengers.

He claimed the airline loses around BDT 2 million worth of fuel every day because of delays associated with the single runway at Hazrat Shahjalal International Airport.

Aircraft can spend significant time waiting for takeoff or landing, increasing fuel consumption and disrupting schedules, he expressed.

Mamun also pointed to differences in taxes and charges between Bangladesh and competing regional markets. He said a passenger traveling from Dhaka to Kuala Lumpur pays around BDT 9,890 in government taxes and excise duties, compared with roughly BDT 2,000 on the Kuala Lumpur-Dhaka sector.

Similar differences exist on routes to Singapore and Muscat, he said, arguing that such costs ultimately feed into airfares.

He also criticized ground-handling charges and licensing restrictions, saying Bangladesh needs a level playing field if domestic airlines are expected to compete with foreign carriers.

Need for domestic aviation capacity

Mahmud Hussain

Air Vice Marshal (retd) Mahmud Hussain, former Chairman of the Civil Aviation Authority of Bangladesh (CAAB), said domestic airlines currently serve only around 20 percent to 30 percent of the country's aviation demand, leaving foreign carriers with the majority of the market.

He estimated that a properly developed aviation industry could contribute between USD 2.1 billion and UDS 3 billion to Bangladesh's GDP.

Hussain called for CAAB to develop a long-term national aviation strategy and strengthen its role as both regulator and service provider. He also urged greater consultation with industry stakeholders when preparing new aviation rules.

He proposed annual aviation summits involving airlines, service providers, academia and relevant government ministries to improve coordination and understanding of industry needs.

He also emphasized the need to develop local technical expertise, including pilots, aircraft maintenance engineers and other aviation professionals.

MRO, training emerge as priorities

Dewan Hanif Mahmud

Developing maintenance, repair and overhaul facilities was repeatedly highlighted as a priority at the event.

Millat said the government plans to establish an international-standard MRO facility to serve both Bangladeshi and foreign airlines.

Hussain added the lack of local MRO capabilities forces airlines to send aircraft overseas for major maintenance, increasing costs and causing foreign exchange outflows.

He also called for the development of flying schools and stronger collaboration between the Bangladesh Air Force Training Centre and Aviation and Aerospace University Bangladesh to address future shortages of pilots and aircraft maintenance engineers.

The government is also reviewing rules related to aircraft maintenance facilities to make it easier for private airlines to establish and expand such operations.

Cargo offers another growth avenue

Speakers said Bangladesh's aviation ambitions should not be limited to passenger traffic.

State Minister Kobir described the country's international air travel market as being worth around BDT 700 billion and said there was significant potential to expand connections with South and Southeast Asia, particularly China, Japan and South Korea.

KM Mozibul Hoque

TAS Group (AirAsia GSA in Bangladesh) Chairman KM Mozibul Hoque estimated Bangladesh's broader aviation market at USD 5 billion to USD 6 billion, with potential to reach USD 15 billion if the sector develops in a coordinated manner.

He said around 77 percent of the market is currently held by foreign airlines and estimated that roughly USD 1.16 billion leaves Bangladesh annually through air travel.

Hussain also urged policymakers to strengthen cargo and export-related aviation services, saying better connectivity could help retain more aviation-related economic activity within Bangladesh.

Dhaka runway constraints remain major obstacle

Md Noor-E-Alam

CAAB Member for Air Traffic Management Air Commodore Md Noor-E-Alam said Hazrat Shahjalal International Airport currently handles about 20 to 22 flights per hour.

The introduction of high-speed taxiways could eventually raise capacity to around 26 to 28 flights per hour by reducing runway occupancy time, he claimed.

However, the airport's single-runway configuration remains a major constraint. Noor-E-Alam mentioned CAAB is considering a dependent runway, although limited space and existing development around the airport make such a project challenging.

The runway problem is particularly important for airlines because delays increase fuel consumption, reduce aircraft utilization and affect punctuality.

Calls for better management

Abdul Hai Sarker

Dhaka Bank Board Chairman Abdul Hai Sarker said financing would not necessarily be a barrier for viable aviation projects if investors can demonstrate sustainable returns.

He argued that Bangladesh's larger problem is inefficient management across areas including ground handling, cargo, passenger services and flight operations.

Sarker added even relatively simple service failures can damage the experience of international passengers and tourists, emphasizing the need to improve operational standards alongside major infrastructure projects.

Md Noor-E-Alam

Noor-E-Alam mentioned Bangladesh has a strategic opportunity to become a regional aviation hub because of its geographic position, expanding passenger and cargo markets and growing airport infrastructure.

He expressed CAAB is taking an integrated approach covering infrastructure, technology, air traffic management and passenger services.

For the government, the immediate challenge will be turning policy commitments into practical reforms. The new aviation rules, Third Terminal operations, MRO development, lower-cost business environment, expanded airline capacity and stronger technical workforce will all be critical to determining whether Bangladesh can translate its geographic advantage into a competitive aviation hub.