CAAB struggles to recover Tk 11.93b dues from three defunct airlines

The Civil Aviation Authority of Bangladesh (CAAB) faces uncertainties over realising Tk 11.93 billion that three defunct airlines owe it.

The airlines are Regent Airways, United Airways and GMG Airlines.

CAAB has taken several initiatives, including filing money suits, to recover the outstanding payments, but to no avail.

The cases remain pending for more than a decade due to the sluggish judicial system, while there are uncertainties over when they will finally be resolved.

Various airlines in the country, including the aforementioned three, owed the state-run organisation Tk 77.22 billion until November 2024.

Bangladesh's first private airline GMG Airlines started operations in 1997 and went out of business in 2012 due to financial constraints. Regent Airways launched its journey in 2010 and closed operations in March 2020 due to the same problem.

Founded in 2005, United Airways began flight operations on July 10, 2007. It ceased all activities on March 6, 2016.

Having failed to realise the outstanding payments through the normal process, CAAB filed 15 cases against the three companies - four against United, eight against GMG, and three against Regent.

The cases remain pending in various courts in Dhaka, Jahsore, Barishal, Sylhet, Chattrogram, and Cox's Bazar.

Among the eight lawsuits filed against GMG, six were lodged in 2013, one in 2016, the other in 2021.

There are also uncertainties over whether the three airlines' owners will be available till the case verdicts are given so that the money can be recovered from them, provided the judgments go in favour of CAAB.

Jayanta Kumar Biswas, a panel lawyer of CAAB, told The Financial Express it is not possible to exactly say when the cases will be settled.

A money suit can normally be resolved within five to seven years if the accused responds properly, he said. "The accused usually try to prolong court proceedings in Bangladesh."

However, CAAB Chairman Air-Vice Marshal Md Monjur Kabir Bhuiyan is very optimistic about recovering the payments, although the organisation has no precedent to realise such dues.

"The cases against the airlines continue. We are in the right position, and our panel lawyers are regularly following the proceedings. We are hopeful of getting verdicts in our favour," he told The Financial Express.

Apart from the cases, CAAB plans to recover a portion of the money by selling 12 abandoned aircraft of the airlines, he said.

Among the abandoned aircraft at the Hazrat Shahjalal International Airport, eight belong to United, two to Regent, one to GMG, and one to Angel Airways.

The CAAB chairman said they are assessing the legal aspects of selling the aircraft. "After finishing the assessment, the aircraft will be sold."

However, CAAB can recover only a disproportionately small amount of money by selling the abandoned planes.

In addition, selling the aircraft through auction will not be easy for CAAB as the airlines owe money to several banks.

The banks that issued loans to the airlines have already sent letters to CAAB demanding their corresponding shares from the possible auction of the abandoned aircraft, said insiders.

If their demand is not met, the banks may create legal barriers, thwarting CAAB's planned auction.

The functioning airlines that owe money to CAAB are clearing their debts in phases.

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