Biman poised for new take-off
It may be a gloomy year for global airline industry as it is feared to post losses on the back of recession. But local carriers like Biman Bangladesh Airlines is expected to remain immune from the meltdown since it has an ethnic passenger market where Bangladeshi workers abroad are the main travellers.
Mahbub Jamil, who recently stepped down from the chairman post of Biman's reconstituted board, thought this way as he shared his views with The Daily Star recently.
“We are absolutely convinced that our carrier will not face shortage of traffic even though airlines worldwide are facing stormy weather for global recession,” said Jamil, also the chief adviser’s special assistant for civil aviation.
His estimate contrasts sharply with IATA's (International Air Transport Association) bleak outlook at $2.5 billion losses for 2009 due to a slump in consumer spending and business confidence amid glum economy worldwide after the industry dated with oil price spiral until mid last year.
IATA also feared that traffic would decline by 3 percent this year after a 2 percent growth last year.
Jamil however said: “We have our nationals working in the Middle East, South Korea, Malaysia and in other countries. All want to travel on their own national carrier. We don't think there will be a passenger crunch for Biman in the next couple of years.”
“There are also demands from NRBs (non-resident Bangladeshis) in the USA and Canada,” he said.
Presently around 25 local and foreign carriers depend mainly on thousands of Bangladeshi jobseekers and workers in the Middle East and other parts of the world, rather than tourists and businesspeople.
Jamil, referring to airlines in Singapore and Thailand, said these are dependent mainly on the tourists and businesspersons. “Our people love to fly on national carrier to get native feeling -- talking in Bangla and tasting local cuisine,” he said.
“In addition, the size of our fleet and number of routes are too limited to face any passenger crunch or encounter losses due to shrink in world economy,” said Jamil.
He headed Biman's board, which was reconstituted in February last year since Biman was turned into a pubic limited company (PLC) in July 2007 to bring efficiency and dynamism in the activities of the national carrier.
Turning into a PLC also helped clip Ministry of Civil Aviation's wings to direct Biman's decision. Rather the Biman board, comprised of representatives from public and private sectors, began acting as supreme authorities and fixing the carrier's course of action.
When the new board took over, it reviewed the previous track of Biman, marked by huge loss, decade-old aircraft, unrest among pilots, flight engineers and cabin crew.
“Our aim was to transform Biman and its management into a company, not in the way it was running earlier. There was no procurement or purchase policy, and the authority of the managing director and other officials was not defined,” Jamil said.
The board also encountered the issue of retaining the pilots leaving amid uncertainty due to aircraft shortage. The result: A deal worth $2.5 billion with US plane maker Boeing to procure 10 new aircraft -- four 777-300ERs (Extended Range), four 787-8 Dreamliners and two 737-800s. The new aircraft will start joining Biman fleet from 2013.
Biman was also awarded the authority to purchase six more planes -- two 777-300ERs, two 787-8s and two 737-800s -- through the deal.
“We felt the urge to manage aircraft faster. Otherwise nothing is possible,” he said, citing the steps the board followed before deciding to ink a deal with Boeing.
“We got two benefits -- reduced prices for some aircraft and some other non cash benefits such as free training for the pilots,” said Jamil.
Biman paid Tk 82 crore in confirmation fees from its own fund for the purchase of Boeing aircraft.
According to Jamil, the aircraft like Boeing-777 will operate on such long-haul routes as London, New York, Toronto and Australia.
Boeing-787 and Boeing-737 are expected to fly to Middle Eastern and short-range as well as the regional destinations, he added.
Jamil hoped Biman would not need to look back from 2013 after it start getting delivery of the aircraft. In the interim period, the carrier will lease aircraft with the assistance from Boeing.
"We hope to get two Boeing-777s by April 2009 on lease. We will also get two more Boeing- 777s by the end of 2009 or early 2010. All these leased aircraft will continue until we get the delivery of our aircraft," he said.
Apart from this move, Jamil said, Biman has also taken steps to maintain flight schedule on majority of its routes. “Except for aircraft's technical or weather-related difficulties, we have been able to maintain majority of Biman's flight schedule in the last three months. In the past, passengers had to wait for hours for delay,” he said.
The carrier also reduced the number of flights on unprofitable routes to bring down losses. These all helped Biman return to profitability. In fiscal year 2007-08, Biman's profit stood at around Tk 19 crore, up from the estimated loss of Tk 98 crore in its budget, Jamil said.
“It's a remarkable job. The main thing behind the success is improvement in total management,” he said.
“If there is a proper planning and a proper strategy, I believe Biman's bad reputation will be wiped out as soon as it gets new aircraft,” he said. “Biman has reached a level of progress. I believe we will be able to carry forward this advancement.”
Jamil however said some jobs need to be done like restructuring the management to infuse dynamism into the activities of the carrier. “When the whole restructuring is done, Biman will run more efficiently with its accounts to be audited monthly,” he said.
“We have streamlined Biman. Now the new government will bring it to further level of advancement. I hope anyone who is going to take the charge of the aviation ministry will take care of Biman to make it profitable and help it improve the image of the country.”