Biman faces cash crunch

Biman Bangladesh Airlines has sought a Tk 1,500 crore loan from the state-owned Sonali Bank as the national flag carrier has been reeling from a severe cash crunch amid global travel restrictions owing to the coronavirus pandemic.

The airline incurred a loss of around Tk 450 crore in the last two months as it has been running with "no income" following the Covid-19 outbreak, said M Mokabbir Hossain, CEO of Biman.

"Biman was forced to suspend its routes one after another since January and it incurred a liability of Tk 1,300 crore in the last three months," he said

Talking to The Daily Star on Thursday, the Biman boss said they applied for the loan on April 13 and were expecting to get it within this month.

Most of the amount would be used to meet Biman's operation costs, including the salaries of its several thousand employees, Mokabbir said, adding that Tk 200 crore would be needed to meet the "permanent operational costs" of Biman.

Biman suspended flights to all its 17 destinations from March 30, but the maintenance of its 18 aircraft would require Tk 266 crore in April, the CEO said, adding that Tk 98 crore would be needed to pay for the six aircraft that were procured on lease.

Moreover, the airline will also have to refund ticket prices worth several hundred crores of taka due to the cancellations of flights, said Mokabbir.

PAY CUT FOR EMPLOYEES

In an effort to reduce costs, Biman has announced a 10 percent cut in the basic pay of March for all employees, except the rank and file.

The airline also slashed other employee benefits from March.

Employees and staff of all level may see up to 50 percent deduction in their basic pay with the senior employees forfeiting a larger share, according to Biman sources.

Paying salaries of some 4,300 permanent staff would be very difficult for Biman if the loan is not sanctioned, said an official of the airline.

The deadline for suspension of air communication may extend further, sources at the Civil Aviation Authority of Bangladesh said.

BIMAN TO OPERATE FLIGHTS ON DHAKA-GUANGZHOU ROUTE

In a major development, Biman Bangladesh Airlines has got approval from Chinese authorities to operate flights on Dhaka-Guangzhou route.

Biman is planning to begin flight operation on this route from May, a top official of Biman told The Daily Star.

Dhaka-Guangzhou route is considered as a profitable route as many Chinese and Bangladeshis travel this route for business and tourism, said the official.

US-Bangla Airlines and China Southern Airlines are currently operating flights on this route.