The Ministry of Civil Aviation and Tourism has drafted a circular to prevent passenger harassment and regulate the operations of travel agencies. Although the draft circular aims to ensure "transparency" and "accountability" in the travel agency business, it raises concerns that thousands of travel agencies might shut down.
According to the draft circular, one travel agency will not be allowed to buy or sell tickets through another travel agency. Opposing this clause, travel agencies argue that the Business-to-Business (B2B) model is widely practiced globally, where one travel agency can sell tickets through another. They claim that if this rule is implemented in Bangladesh, local travel agencies will struggle to keep up with the international market. Moreover, millions of people who are directly and indirectly involved in the sector will be adversely affected.
Current scenario
According to sources, there are currently 5,746 licensed travel agencies in the country, of which only 970 are recognised by the International Air Transport Association (IATA). Among them, just 350 have the authority (capping) to sell tickets for major airlines like Emirates, Qatar Airways, Singapore Airlines, Saudi Arabian Airlines, and others.
Additionally, to obtain ticket-selling rights from the national carrier Biman Bangladesh Airlines, an agency must deposit Tk 40 lakh in advance, including IATA recognition.
Apart from these, budget airlines such as Air Arabia, IndiGo, Salam Air, and Jazeera Airways do not offer tickets through IATA. Therefore, over 5,000 licensed travel agencies rely on the 350 agencies with capping rights to acquire tickets. If agencies are prohibited from trading tickets among themselves, more than 5,000 small and medium-sized agencies will be forced to shut down.
Potential consequences
Mohammad Gofran Chowdhury, owner of Moin Travels, stated, "In the first three months of this year (January, February, and March), I personally issued only eight tickets. I had to purchase the remaining tickets from other licensed agencies. Despite our best efforts, the major airlines will not grant us ticket-selling authority due to insufficient bank guarantees. If this circular is enforced, we will have no option but to close our business."
He further mentioned that if the new restrictions are enforced, large travel agencies will dominate the market, while small and low-capital agencies will lose access to tickets and fail to compete. Consequently, the air ticket market will fall into the hands of a few major companies, paving the way for monopolistic business practices. Moreover, foreign travel agencies could exploit the situation.
IATA membership compulsion
The draft circular also mandates that travel agencies must obtain recognition and membership from IATA to conduct business.
Agency owners argue that IATA is merely a ticket-selling platform, and globally, there are two types of travel agencies: IATA and non-IATA. Nowhere else is it mandatory to sell tickets exclusively through IATA to run a travel agency business.
Generally, large travel agencies acquire IATA membership because obtaining ticket-selling authority from all airlines under IATA requires bank guarantees worth millions and years of waiting. To apply for IATA membership, an agency must operate for at least six months and submit various documents, including a bank guarantee of at least Tk 30 lakh, to the IATA country manager in Bangladesh.
If all the documents are correctly submitted, the agency may receive permission to sell tickets from three to four airlines, with a maximum purchase limit of Tk 21 lakh, which is 70 per cent of the guaranteed amount.
Impact on smaller agencies
According to the Ministry of Civil Aviation and Tourism, 4,476 out of 5,746 registered travel agencies (83 per cent) do not hold IATA certification. Therefore, as soon as the new circular is implemented, these agencies will lose the ability to sell tickets, leading to a ticket shortage and causing significant inconvenience for passengers.
Translated & edited by Fariha Nowshin Chinika
