Biman plans for loss-prone NY route amid hitches

Biman seeks to resume flights to New York -- apparently to fulfil government wishes -- despite a history of counting about Tk 40 lakh in average losses on each flight.

But Biman Managing Director and Chief Executive Muhammad Zakiul Islam said flights on such a renowned destination would help the carrier portray a positive image to travellers and add value to the brand.

“These are intangible benefits. Sometimes you will have to maintain certain networks to create a positive image among travellers, even if it does not bring in profits," he told The Daily Star.

“It is not that all our routes bring profits. We are operating flights to London despite losses. You should consider the overall network to attract travellers,” said the Biman chief.

The carrier had planned to resume flights at the beginning of winter schedule, but the plan appears to be missing the target due to its inability to get the delivery of two leased Boeing 777-200 aircraft (extended range) by October 26.

Biman now runs the risk of losing the slot it received from John F Kennedy Airport Authority to use one of the busiest airports.

Biman Board Chairman Jamal Uddin Ahmed said Biman had sought a time extension until the end of December to keep the slot for the carrier.

“We have been assured that the slot will be available until November. Now we are planning to begin flights on November 24,” he said.

The carrier returned from losses in fiscal 2007-08 after three years in the red.

Riddled with aircraft shortages and record losses worth Tk 454 crore in fiscal 2005-06, Biman shut its flights to New York in 2006, along with Brussels, Paris, Frankfurt, Mumbai, Narita and Yangon.

Officials said although the carrier had received a relatively good number of passengers, it incurred losses between Tk 35-50 lakh on each flight on the Dhaka-New York route mainly because of using the ageing and fuel-guzzling DC-10 aircraft on the long-haul flight.

As per plans, the carrier aims to operate flights on the Dhaka-Manchester-New York route twice a week to lure non-resident Bangladeshis.

Industry analysts however said favourable traffic flow might not help Biman avoid losses on this long-haul route, as it will have to fly for about 35 hours, which will result in low yield per seat per hour.

Given the present fare of about $1,200 between Dhaka-New York-Dhaka, earnings are expected to stand at about $35 a seat per hour, which will be about $21 lower than the most profitable route to Jeddah.

Biman management said the flights would run on the leased Boeing 777-200 ER aircraft, instead of the DC-10. However, insiders fear the Boeing 777-200 ER aircraft will not make it profitable, it will only reduce the extent of losses.

Analysts however fear the attempt to reopen flights to New York with leased aircraft will be inappropriate when the carrier is trying to regain strength.

“Political motives should not be the driving force behind a commercial organisation like Biman. Rather, decision should be taken by considering commercial viability and profitability,” said Kazi Wahidul Alam, editor of The Bangladesh Monitor, an aviation and tourism publication.

sohel@thedailystar.net