Volume-XVII Issue No. 15  March 16, 2008 

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AVIATION _______________________________

No plan to tackle critical problems , Govt okays transforming Biman into a Public Limited Company, without off-loading share
June 01, 2007
A Monitor Report
Dhaka : The Council of Advisers to the Caretaker Government has decided in principle to transform Biman Bangladesh Airlines into a Public Limited Company (PLC). The proposed company, initially, will be 100 per cent state-owned. Presided over by Chief Adviser Dr.Fakhruddin Ahmed, the meeting on May 19 gave the go-ahead signal to the plan for making Biman a PLC. However, some internal reforms like manpower reduction, financial audit and settlement of accounts with Bangladesh Petroleum Corporation would be done first.

“The concerned authoriies have been asked to prepare an action plan outlining the ways and means to turn Biman profitable and report back to the cabinet as soon as possible," Syed Fahim Munaim, Press Secretary to the Chief Adviser, told newsmen at a briefing.

Strangely, nothing has been said about how Biman is going to tackle its two critical problems-shortage of cash in-flow and extreme shortage of aircraft. There is no definite time table for making Biman a PLC. So, there is no end of Biman's critical problems in sight.

The Civil Aviation and Tourism Ministry gave a presentation on its plan for Biman at the meeting. The plan includes downsizing of manpower, conducting a special audit, and adjustment of financial liabilities with the Bangladesh Petroleum Corporation and discount on fuel price.

Biman is over-burdened with over 6,800 employees and probably the highest man-equipment ratio. It has plan to down size by about half by June 30.

With a financial deficit of about Tk 2,000 crore till March 2007, and four out of nine wide-body aircraft in grounded, Biman is failing to maintain schedules on the international routes.

It may be recalled a high-powered committee led by the former civil aviation and tourism secretary Md Shahid Alam, in its report recommended reduction of Biman's manpower by 50 per cent and turning it into a public limited company. The government formed the seven-member committee on February 19 to assess the situation of the national flag carrier and make suggestions on how to restructure and give it a commercial edge.

The committee also suggested appointment of operator on profit sharing basis and modernisation of fleet to run the national flag carrier.

The authorities concerned will now take steps to implement the plans phase by phase, Munaim said without giving details.

Dr. M A Momen, Managing Director of Biman reportedly sought Tk. 3.0 billion from the government to downsize the manpower under golden handshake system.

Biman has projected a Tk. 6.91 billion loss during 2006-07, the current fiscal year which will end in June. High fuel prices, reduced operation and falling passenger numbers are to blame.

It owes Tk 12 billion BPC, the local fuel supplier. Biman also has been suffering from a shortage of aircraft and forced to stop flights to New York , Paris , Tokyo , Frankfurt , Brussels , Yangon and Mumbai last year.

It now flies to 19 international destinations with a fleet of 13 aircraft-five DC-10-30s, four Airbus A310-200 and four F-28s. Only seven of these aircraft are available for operation and as such cancellation of large number of scheduled flights has become a regular feature.

The nation's flag carrier has been floundering progressively for many years and all will welcome any kind of intervention that the government can conjure up to save it from total destruction.

But it is difficult to understand as to how mere transforming Biman into a PLC going to change the situation. No one is sure whether that will bring about any degree of qualitative changes in the organisation and without removing current critical problems how Biman is going to be a healthy and profitable commercial venture?

All the past governments are to be blamed for Biman's present deplorable situation. As we have stated several times before that drastic measures are required to make Biman an efficient and profitable airline. But what now we see can at best be a termed as a move towards an ill-defined direction with no promise for required changed in management, capacity and capability.



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