Which way is Biman flying?
Caught in severe turbulence.Photo: STAR
I have been waiting for Bangladesh Airlines Pilots' Association (BAPA) to react to the proceedings thus far, but in absence of any such reaction I take this opportunity to redress my tormented conscience. I think remaining a silent bystander in this situation is an offence for a person who is in some way related to Biman.
I am a stakeholder in Biman's affairs as an employee and as a citizen, because Biman belongs to the people, and everyone of the country has right to all information related to the performance of the airline.
Biman is plagued with too many issues which need desperate and immediate action. It is inconceivable why there is so much controversy about one aircraft, which has not been contributing positively either towards revenue earnings or the image of the airline.
It can be said safely that CAAB regulations do not allow this aircraft to be flown. Whether the aircraft is making money for the airline does not matter in any way. There is a cost associated with regulatory compliance and any company doing business should be ready and willing to incur that cost.
There is one argument being voiced today; if Biman can operate aircraft that are more than 30 years old, why can't Kabo 747 be operated? Regulatory requirement prescribes compliance for further acquisitions, and not for aircraft already owned by concerns. It is like the BRTA restriction on import of vehicles older than five years, whereas older vehicles can run up to 20 years from the date of manufacture.
Biman should not be flying the DC-10s or the F-28s. We should have replaced them at least a decade back. Unfortunately, we did not have the visionaries who would make things happen, or even if we had, they were unable to realise their dreams because of pressure from influential people.
No flight should have been operated with the Kabo 747 aircraft during and after the last Hajj. Its story up to the pre-Hajj operations is that of deceit and blackmail. Kabo's bid for Hajj operations was $8,900/hr and the lowest bid by Orient Thai was $7,800/hr. Kabo was asked to match the Orient Thai cost per seat, which would make their hourly rate $8,090 because of the additional capacity of 24 seats.
Kabo initially agreed to this proposal, but they replaced their offer just a few days before Hajj operations with an alternative offer. Kabo would operate for one year instead of only the Hajj operations at a rate of $5,300. This aircraft was parked at Dhaka airport following the 2008 hajj operations. It is obvious that the attempt to secure its long-term wet lease with Biman was preplanned.
There was an emergency meeting at Balaka, Biman head office, to solve the crisis arising from Kabo's withdrawal. It was decided that Thai Orient would be asked to provide a second aircraft. Thai Orient obliged and the second aircraft was contracted. When Kabo's local agent found that their plan did not work, they offered to operate the aircraft for a period of eight months instead of one year.
Having contracted both Thai Orient aircraft, Biman decided not to entertain the Kabo offer. Instead it was recommended that Kabo be blacklisted for deliberately putting Biman under pressure. But amazingly, Kabo's offer was accepted on the pretext that it would provide additional support during Hajj operations.
Obviously, there was strong lobby behind Kabo, strong enough to plan and execute an extra-ordinary and unethical ploy. It is needless to say that Biman had to swallow one additional aircraft without any real requirement.
Why is it so important to have aircraft on wet lease? Because wet lease payment is on hourly basis, and dry lease is on monthly basis. There is a published dry lease rate for different type of aircraft depending on date of manufacture and configuration, but there is no such reliable information on wet lease.
A wet lease aircraft has to be operated for a minimum guaranteed hours, whereas the use of the dry leased aircraft is at the operator's discretion. Just think about it, in case of dry lease, an aircraft can be contracted at a rate of $10-15,000 over the actual market rate, but in the absence of any such published rate, the hourly rate can be a few hundred to a thousand dollars more than the actual "per hour" rate for wet lease.
With guaranteed use for 350 hrs, $1,000 over the actual rate would translate into $350,000. The dry lease contract of the 777-200ER with Biman is for $600,000. We have no idea whether the dry lease part of the contract will actually come into effect, because there is no visible effort in that direction. Of course, we have crew, maintenance capability and ancillary support, all of which are highly under-utilised now.
Surprisingly, while there is strong lobby for allowing Kabo 747 to operate, there is no debate for changing the CAAB regulatory requirement which bars the aircraft from being flown. If it is imperative to fly old aircraft, the rules should be amended to suit that instead of granting waivers to suit particular groups.
It is my assumption that all the private airlines are waiting to see the outcome of this battle, which will ascertain whether the Kabo 747 gets to fly or not. Waiver to let Kabo operate will allow others to bring in old aircraft.
CAAB is presently listed Category Two by FAA and "Significant Safety Concern" by ICAO. Another deviation definitely will not help its efforts to improve credibility in the eyes of those organisations. CAAB is an oversight body and must promulgate appropriate rules/regulations and strictly enforce them.
Aircraft leasing is a fairly common strategy practiced by most airlines. It reduces investment significantly. Nearly 40% of all aircraft with the airlines have been acquired on lease. Airlines purchase aircraft to build equity as they expand. But hardly any airline acquires aircraft on wet lease, simply because they have the capability to provide all the components required for operation, like crew, maintenance, network and many other associated services developed through years.
Acquisition of aircraft on wet lease is done only to address short-term capacity crisis. But in our airline wet lease aircraft acquisition has become a regular practice. Regular leasing companies do not let out aircraft on wet lease, otherwise they would attain the characteristics of a charter company. Obviously, all-round support package always comes at a much higher price.
I have no intention of getting into the financial details, but one thing I can tell with certainty, the airline is bleeding because of the wet leased aircraft. They are becoming increasingly more expensive to operate and less appealing to the passengers. This is an appeal aimed to catch the attention of the Honorable prime minister, who went out of her way to extend sovereign guarantee for the purchase of the new aircraft. We are aware of her feelings for the airline, and I am confident that with the right picture about the airline, we will receive appropriate support to make this airline an asset.
There is no point in hiding corporate dirt under the corporate rug. I request all concerned to open up and make a change. The brand equity of the airline is presently dwelling in negative territory; let us not allow it to slip any further.
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