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6 years ago

Biman to return two aircraft to shed losses

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Biman Bangladesh Airlines will return the two faulty Egyptian aircraft in March and May next year, more than a year before termination of the lease agreement to help prevent further losses.

Experts and industry insiders said Biman is going to incur additional losses as it will have to return the B 777-200 ERs either in their previous condition or buying new engines. Experts said a new engine of Boeing 777-200 ER may cost US$ 8-10 million approximately.  

Biman took lease of the two aircraft from EgyptAir at a cost of Tk 2.0 billion.

Biman evaluated discontinuation of the lease agreement with Egypt Air in its 195th board meeting in July this year. It decided to turn to the English law firm Holman Fenwick Willan (HFW) to get their opinion. The HFW gave their opinion in favour of early termination of the lease with Egypt Air on the two aircraft that caused losses to the tune of Tk 3.05 billion to Biman since those were leased in March 2014 under a five-year contract, a parliamentary watchdog's investigation has found.

In the 197th meeting on August 28 last the board instructed early termination of the lease after four years on a six months' prior notice. Biman wrote to  the Egypt Air in this regard on September 07. 

The planes' leasing procedure and repair of engines have been steeped in 'gross negligence and irregularities', while the ministry also showed an 'extreme lack of concern', the parliamentary standing committee on civil aviation and tourism ministry was told in its 31st meeting held in October last.

One of the planes had been grounded for a long time due to engine trouble. Biman rented two more engines from Egypt Air in the past few years as they kept breaking down. The last breakdown happened in December 2016. Later, the damaged engines were sent to a company in the US for repair. But as no delivery date was set for the fixed engines, Biman is still paying rents to Egypt Air and repair fees to the US firm.

When his attention was drawn to the irregularities found in the probe report Civil Aviation Minister Rashed Khan Menon told the FE that the Jatiya Sangsad (JS) body called the then technical committee members and board members who were involved in the process.

He said that the probe report recommended that the committee ask why they took such a decision to lease these aircraft.

When asked about action against those involved in the irregularities, the minister said a decision might come from the parliamentary committee in the next meeting.

About the additional loss if Biman buys new engines for the two aircraft or overhaul the existing two engines, Mr Menon said it would be a big amount but  the exact figure was not known.

The two Boeing 777 200 ER planes were leased for five years but one of them has now been grounded for five months because of engine failure, while the another is fully non-operational.

But the progress report submitted to the JS body said that only one aircraft out of the two had been grounded since December 18, 2016. Its engine was repaired on August 26 by the United Airlines and it started regular operation from September 10 this year.   

Talking to the FE, general manger (public relations) of Biman Shakil Meraj said the process to return the aircraft to Egypt Air was underway. A consultant firm had been appointed for the purpose.  

Biman Bangladesh Airlines decided to induct two aircraft for a short period on a wet-lease basis to replace these two.

An earlier report showed that Biman incurred Tk10 million  in loss every day on  account of the Egypt Air planes and the lease cost Biman Tk 50 million monthly.

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