The Financial Express

Biman makes loss on misstep amid pandemic

| Updated: August 12, 2020 11:56:44

Evaly and Fianancial Express Evaly and Fianancial Express
File photo File photo

Biman Bangladesh Airlines incurs additional losses during the coronavirus pandemic due to lack of planning.

After three months of suspension of regular flight operations, the government permitted resumption of international flights from June 16 on a limited scale.

The Civil Aviation Authority of Bangladesh also gave permission to Qatar Airways, Emirates, Air Arabia and Turkish Airlines to restart flights mainly to carry stranded Bangladeshi migrant workers and expatriates.

The national flag carrier reopened only three international routes from mid-July and the beginning of August.

It recommenced commercial flights on Dhaka-Dubai and Dhaka-Abu Dhabi from July 13 and 14. On the Dhaka-Kuwait route, the airliner resumed flights from August.

But it was found that a Dhaka-Abu Dhabi flight on August 02 carried only six passengers and nine tonnes of cargo incurring a loss of Tk 8.1 million.

The aircraft, Boeing 787-8 Dreamliner, carried 80 passengers by the return flight. It has a seating capacity of 271.

This incident triggered the issuance of a show-cause notice to eight persons on August 07 by the director (administration).

They were Saifuddin, manager (shift), Revenue Management System (RMS) department, Binay Chandra Nath, assistant manager of the same department, Nazmul Islam, assistant manager, RMS, Tabibur Rahman, junior commercial officer, Sunil Sarker, junior commercial officer, and Shamim Ahmed, junior commercial officer.

A Biman source said 135 passengers booked for the return flight on August 02 from Abu Dhabi, but some of them cancelled booking at the last moment.

But it was learnt that Biman usually stops ticket booking 72 hours before.

Experts suggested that the Biman authorities deploy a smaller aircraft on the Dhaka-Abu Dhabi route considering such a low load factor.

Biman has a running cost of Tk 2.5 billion a month. The government has already sanctioned a Tk 10-billion loan for Biman under a stimulus package against the losses.

But it seems the money will go down the drain if they operate without much calculation and market research to make profits on international routes, they added.

On the other hand, the load factor is also very low on Dhaka-Dubai route for doubling the fare of Biman compared to Emirates and Fly Dubai.

Biman has increased its economy class fare on the route to Tk 83,000 from Tk 43,000.

The fare of economy class of Emirates, a prestigious international carrier, is only Tk 55,000 while that of Fly Dubai is Tk 45,000.

Migrant workers are not capable of flying Biman because of the high price of ticket. But upper-class passengers always prefer Emirates as it carries passengers onwards from Dubai.

The load factor is also low on the Dhaka-London route.

When asked, Biman managing director Mokabbir Hossain went furious with this correspondent, saying that the show-cause notice is not anything to share with the media.

Saifuddin, who was on the list of the show-cause notice, did not receive any such notice until Saturday.

Someone from Biman, who leaked the information on a show-cause notice, must have been acting against Biman for his own interest, he said.

Talking to the FE, aviation expert Kazi Wahidul Alam said the decision to open Dhaka-Kuwait route was unplanned.

Whenever Biman considers opening international routes, it must have a feasibility study which will give priority to commercial interest.

"Emirates and Fly Dubai carry onward passengers from Dubai. But Biman operates only point-to-point flights which is not commercially viable as it doesn't have the capability to resume international flights in the given situation."

Biman used to carry 50-per cent passengers, including migrant workers, hajj and Umrah pilgrims, to the Middle East. The rest were tourists or business passengers, said Mr Alam.

"Now there is no manpower recruitment, no business or leisure travellers. I don't understand why Biman opened Abu Dhabi and Dubai routes without considering the load factor which has come down by 80 per cent from Bangladesh," he cited.

Biman should have done networking with other international carriers before resuming flights during the pandemic, observed Mr Alam.

It would be suicidal to operate point-to-point international flights as only 10-20 per cent of the total passengers travel to Dubai or Abu Dhabi as single destination passengers, he said.

Most of the passengers fly to other countries from those destinations, the expert concluded.

[email protected]

Share if you like

Filter By Topic