The New Nation - Internet Edition

Khurshid Alam Khan

The newly constituted Biman Board of Directors has already set a record in having sat for a marathon meeting - the first formal one since its formation on 24 February 2008 - from the early evening till the midnight on 3 March 2008, but it still failed to deliver any result and called for another meeting to be held on Sunday 11 March 2008. The convening of another meeting in quick succession is only indicative of the importance of the issues that the Board must resolve in a prudent and responsible way so as to ensure Biman not only retains its recent recovery from a free-fall but also climbs out steadily and confidently to its optimum cruising altitude.

The issue of enormous importance that is confronting the Board is the one of procurement of aircraft to meet Biman's need of the day and of the hour and not of the year 2013 or 2017 when, according to the Fleet Planning Committee, the brand-new Boeing777s and Boeing787 Dreamliners are to be delivered by the manufacturer. Surely, the Board must first cater to Biman's immediate needs before indulging in the luxury of investing in the distant future.

Reportedly, Biman alone cannot bear, even in the most optimistic projection, the full cost of the four B777s and four B787 Dreamliners, and the Government of Bangladesh, as the 100% shareholder of the Biman Bangladesh Airlines Limited, will have to inject Tk1700 crore as equity in order to make the project viable.

If it were Biman's resources alone, and none from the Government exchequer, then perhaps the Board would have the independence and authority to reach a decision at its very first meeting and would not remain in animated suspension as it does now.

Because of the envisaged investment expenditure of the Government in the project being many times more than Tk25 crore, the issue will necessarily be referred to the Executive Committee of the National Economic Council (ECNEC).

It would be refreshing to remind ourselves of how time-consuming and exasperating it had been for Biman to go through all the ECNEC and PPR exercises in the first half of the nineties in the run-up to the induction of the two Airbus A310s in 1996. Then again it was because the procedures were rigorously followed that the allegations of corruption involving the purchase of the Airbuses would subsequently not stand in the court of law when cases were filed against the protagonists of the Airbus deal.

Whenever Biman opted to buy - as it did at various stages of its history - brand-new aircraft, for example the DC10 in 1989, the ATPs in 1990, or the A310s in 1996, Biman invariably ran into financial difficulties primarily because of a highly adverse debt-equity ratio that once reached the staggering value of 83:17 bringing Biman precipitously close to bankruptcy. This time again, unless the Government provides enough financial support in terms of equity, the history will only repeat itself. The political Governments never lived up to their commitment to Biman in terms of providing equity injection resulting each time in disputes between Biman and the Government following the purchase of every new aircraft.

Biman really does not need to go through all the rigour of strait jacket exercises, for it really does not need to commit today to a colossal amount of expenses in its current financial condition. Rather, Biman would do well to cut its proverbial coat according to its cloth.

With the arrival of the Superjumbo Airbus A380, many airlines will face over-capacity which they will trim by selling off their other long haul aircraft. The Singapore Airlines is already flying its two Superjumbo Airbus A380s on SIN-SYD sector, the Emirates is scheduled to operate its new A380s non-stop from Dubai to New York on 1st October 2008, London Heathrow on 1st December 2008, and Sydney-Auckland on 1st February 2009. From the media reports we know Airbus expects to deliver 13 A380s in 2008 and 25 in 2009 and 44 per year from 2010 onward. One can reasonably expect, by 2013, when Boeing offers to deliver its first B777 to Biman, there will be a glut of aircraft of various types including B777s in the aviation world. Can Biman then not buy at a bargain price from the secondary market the B777s that it is desperate today to place orders for?

The Fleet Planning Committee of Biman never ceases to amaze the observers with its overtures. Already mired in a controversy as to its composition, the Fleet Planning Committee now fronts an erstwhile Biman Board member to make the presentation of its fleet planning before the current Biman Board. The capacity in which the erstwhile Board member has access to the Board meeting and the capacity in which he makes a presentation before the Board are not just academic questions, but also are vital legal ones that beg explanations from those who are at the helm of affairs of Biman.

If Biman would properly keep all its aircraft airworthy and flyable all the time, there would be no reason why it cannot maintain the flight frequency and schedule in its present route structure without any disruption. Irrespective of old or new, the three used DC10s that Biman bought in 1983-84 for a total of US$63m and the one brand-new DC10 that it bought in 1989 for US$69m - the workhorses of the national flag carrier - continue till today to render absolutely the same services. Pertinently, what matters is how you maintain your aircraft, not how new or how old your aircraft is.

We have never had any dearth of people looking after the interest of the Boeing or the Airbus or the international financial institutions. This time around we expect the new Board members of Biman Bangladesh Airlines Limited will be passionate about the very survival of Biman and not let themselves be guiled by the mirage of the rosy picture of Biman's future as depicted by the seller's feasibility study.

(Khurshid Alam Khan is the President, Flight Engineers & Navigators Association (FENA), Bangladesh.)