Revamping Biman: Will it work?
At long last, the beloved (no pun intended) state-owned airline, Biman Bangladesh Airlines, has a new Board of Directors. At long last (and this was seriously long), someone new at the helm of the board that is meant to guide the ways for the running (or 'ruining' as some in the past had done) of the airline.
I am not sure if other curious stakeholders in the local airline industry would share the same view as I do – in saying that the only good thing that I have seen happening at Biman over the last seven years was the delivery of the new aircraft from Boeing, which were ordered back in early 2008, and well before the immediate past board and its chairman took the chair. The new aircraft, and the inherent efficiencies thereof, had largely offset the obvious inefficiencies of the nearly-Jurassic fleet of McDonnell Douglas DC-10 aircraft before they were finally retired, which is again something that the post-2008 management of the airline could claim little credit for.
After the profits it had posted in the 2007-2008 fiscal year, it apparently saw some profits again in the 2014-2015 fiscal year with red figures all the way in between. Meanwhile, two expatriate chief executives served for three years under the then Board of Directors. As with almost its entire lifespan of 45 years, no one was made accountable for the stretch of losses amounting to hundreds of millions of dollars. Inexplicable decisions taken in the meantime mostly remained the same way. The lease of two nearly-outworn Boeing 777-200ER aircraft from Egypt, and the wet-lease of a B767-300ER from Maldives during the last Hajj season were probably the biggest concerns from cost versus benefit point-of-view, considering that the four brand-new Boeing 777-300ER aircraft were already inducted into the fleet whose utilisation could possibly have been further optimised, and certain routes and frequencies consolidated during the Hajj season, resulting in negating the need to lease additional aircraft.
The new incumbent chairman of the board at Biman, Air Marshal (retd) Muhammad Enamul Bari, is no stranger to Biman. He was a member of the Board of Directors of the airlines back in 2008, while he was serving the Bangladesh Air Force as the Assistant Chief of Staff (Operations & Training) and had also led the committee which dealt with the final negotiations with Boeing prior to placing the order for 10 aircraft valued at over US$ 2 billion. I had the opportunity to meet him once back in 2008 at his BAF office for about an hour, and he did seem to be a man of conviction – standing firm for the beliefs he then had for the betterment of Biman. How would he fend for Biman's interests again, and this time from the position of the chairman having immense authority over the Board of Directors and hence over the airline's policymaking decisions, would be worth watching out for.
One of Biman's long-overdue agenda, albeit of more political/geo-political importance rather than commercial, has been the re-launch of flights to New York which has remained suspended since 2006. Owing to the Federal Aviation Administration's (FAA) assessment of Bangladesh as a Category 2 state under their International Aviation Safety Assessment (IASA) Programme, and with antiquated DC-10 aircraft in its fleet, the airline had little choice but to draw the curtains over their New York operations. Ten years on, Biman now has the champion aircraft for long-haul flights – the Boeing 777-300ERs, four of them in the fleet, but the CAAB has struggled to find a way to face the FAA for Category 1 assessment, which would allow Biman to resume flights to the US.
In November 2014, the CAAB, in its bid to overcome this challenge by the FAA, appointed a US-based consulting company, JDA Aviation Technology Solutions, at a cost of over BDT 25 crores (over USD 3 million). The US company, as well as local and international media, published the statements of promises and expectations from the deal that would apparently get the FAA IASA assessment of CAAB pushed up to Category 1. Anyone looking up on the internet would find those to be the last statements about this issue. Since then, there has been no updates published or written about it, and no one seems to know if and when the supposed expectations from the deal would materialise.
With four brand-new Boeing 777-300ER and two Boeing 737-800 aircraft already delivered, with four Boeing 787-8 Dreamliner aircraft scheduled to be delivered by 2020, and with the two Airbus A310 aircraft set to be retired in less than a year from now, Biman will have a fleet it owns that would be among the youngest in the world in terms of average fleet age. There are two leased Boeing 777-200ER aircraft, two of the oldest ones in the world, that I honestly feel Biman could well do without because of the unnecessary maintenance burden they levy on the airlines because of their age, and even more so because they are equipped with Pratt & Whitney engines while Biman's own 777-300ERs are powered by General Electric engines. In fact, all of Biman's own aircraft (777-300ERs, 737-800s, and 787-8s) would have GE-manufactured engines, and it makes all the sense in the world to stick to a single engine manufacturer to benefit from lowered inventory and maintenance costs.
Biman also has two leased Bombardier Dash-8-Q400 aircraft which were leased last year to bring the airlines back into the domestic market. While the turboprops did enable the airline to operate in most of the country's airports, and thereby, increase air connectivity, it is doing so at a colossal loss because the aircraft was just not designed for such short domestic flights as we have in Bangladesh. This is evident when one compares the Dash-8-Q400 with its closest competitor type – the French-made ATR72-500/-600, which has outsold its Canadian competitor by a factor of no less than 5:1, simply because of its superior operating economics while carrying similar capacity on similar flight distances.
For decades, Biman has seen it top executives come and go, and its board reconstituted every few years. With each change, intrepid statements were issued as to how this time the airline is set to turn around for good. Sadly (and funnily) enough, each time we were reminded of the old phrase – old wine in a new bottle. Can the latest change at the board of the airline, and seemingly soon in its chief executive position, be the much-awaited new wine in a classic bottle that is Biman? Let us not lose hope!
The writer, currently the CEO of Epic Air, has previously worked with Regent Airways, The Boeing Company. He is also a Doctor of Philosophy in Aviation from Embry-Riddle Aeronautical University (ERAU).
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