Biman’s fate unlikely to change without considerable autonomy

Can you solve a problem using the same method and style of thinking that created the problem in the first place? The administration seems to think you can, as it approves a draft law putting bureaucrats in the driving seat of Biman Bangladesh Airlines—instead of professionals—repeating a cycle that saw systemic graft and bad management calls destroy any chances of Biman being profitable. Even after the national flag carrier was turned into a public limited company in 2007, raising hopes for a much-needed overhaul, it never enjoyed the autonomy it needed to transform itself. Biman recorded losses year after year as it failed to break free of corruption, inefficiencies and bureaucratic control. Now the government has made this state of affairs official by formalising the aviation ministry's control over the airlines through the draft law.

According to the draft Bangladesh Biman Corporation (Repeal) Act, the government will be able to take management decisions regardless of what is said in the Companies Act, under which Biman was supposed to run independently and take its own decisions. The ministry will be able to dissolve and restructure its board of directors—the highest authority for Biman—and have the power to terminate, change and amend contracts of different management treaties of Biman.

The case for government control of a government-owned company may seem reasonable, but the fact is, absolute government control has a track record of backfiring in Bangladesh. We have seen how public money had to be injected into Biman year after year as it was unable to turn any profit on its own. The authorities may take a lesson from the fate of state-owned jute mills in the country that suffered blanket closures after years of continued loss, thanks to a lack of accountability and the inability to transform. Subsidies of the kind Biman receives may not be unprecedented, but successful government-owned airlines globally are also known for their professionalism, efficiency, state-of-the-art aircraft, airport capacity, in-flight services and customer satisfaction—Biman lags far behind its competitors in all these respects. Bangladesh may also take a lesson from the fate of Pakistan International Airlines, which was recently banned from flying in European airspace for six months for its failure to oversee its operators and aircraft in accordance with international standards.

This is what happens when bureaucrats in control of a national flag carrier are given free rein over its operations, without a strong mechanism of accountability in place. The draft law approved by the cabinet fails to address these concerns, and thus is unlikely to help make Biman profitable again. Instead of a government-fixed board of directors predominantly comprising bureaucrats, it should be led by actual professionals who will be given considerable autonomy and flexibility to offer the services that today's jet passengers have come to expect from international airliners. Unless the government allows necessary reforms, Biman may never come out of its destructive cycle.