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Will Biman benefit from adding new Airbus aircraft to its fleet?

Staff Reporter:

Biman Bangladesh Airlines has formulated a plan to expand its fleet size to 45 aircraft from the existing 21 by 2031 in order to generate more revenue.

The national carrier also proposed that Boeing as well as other manufacturers be considered during the next procurement. Six old aircraft from the existing fleet will also be replaced during the 2021-2031 period.

The proposal was raised at the 247th meeting of Biman’s board of directors last year.

According to the previous plan, the airline would have purchased Boeing 777, 787-8 and 787-9, 737-800 and Dash 8-400 aircraft in the next 10 years. But this plan did not proceed due to government decisions.

Now Biman is looking to procure 10 new aircraft, including two cargo freighters, from the European aircraft manufacturer Airbus. Bangladesh will get long-term loan facilities on soft terms under the UK Export Finance scheme to purchase the freighters.

Aviation experts have questioned whether the purchase of the aircraft is a prudent decision if the current Biman fleet is not being used to its full potential.

According to different sources, the airline will increase the number of flights on international and domestic routes, and the plan to purchase the two cargo Airbuses may be actualized by 2027.

The plan had been put forward without doing any market research on the routes to assess passenger and cargo demand, the aviation industry sources claimed.

There was no revenue plan, fund figures, or analysis of crew requirements either, they added.

Biman’s current fleet consists of 21 aircraft: four Boeing-777s, six Boeing-787s, six Boeing-737s and five Dash-8s.

Among them, the long-range Boeing-777s and 787s are able to fly for more than 16 hours continuously, and the Boeing-737s are used for medium and short routes. The Dash-8s are also used for short routes.

According to Civil Aviation Authority of Bangladesh (CAAB) data, Biman used only 76% of its fleet capacity in the 2021-2022 fiscal year.

Meanwhile, Biman transported 26,000 tons of goods using only 6% of its capacity in the same fiscal year. It currently uses the vaults of passenger aircraft for carrying goods, as it does not have dedicated cargo freighters.

Opinions of experts
A planned purchase of aircraft would be commercially viable for any airline to increase capacity, an industry insider said.

“However, our observation is that those who lead the airline are always from a bureaucratic background and lack the expertise to make plans with aviation business in mind,” added aviation expert Kazi Wahidul Alam, a former member of the Biman board of directors.

“They make plans, taking advice from dishonest and corrupt airline officials, which ultimately results in financial losses for Biman,” said the expert.

Other aviation experts termed the decision unprofessional as it lacked revenue assessment. They said to pursue it would be suicidal for Biman.

In 2008, Biman purchased 10 aircraft from the Boeing Company to increase the number of passenger flights to New York and destinations in Europe. It later had to stop operating flights to New York while the European dream never materialized.

Moreover, the carrier’s slots (landing permits) were cancelled by the Chinese civil aviation administration within six months of the inauguration of flight operations on the Guangzhou route. Lacking a proper plan, Biman is now using long-range aircraft on short routes, which is reducing their lifespan.

Experts questioned how and where Biman would use long-haul Airbus A350s if it did purchase them, suggesting the airline first study and find out its present potential.

One expert said the purchase of Airbus might be a political decision by the government.

“The authorities have to put business first. Biman’s fleet size is small and operating aircraft from different manufacturers would cause Biman to suffer financial losses, and it may even face bankruptcy,” the expert warned.

Meanwhile, State Minister for Civil Aviation Md Mahbub Ali recently told Dhaka Tribune that the final decision on aircraft purchase had not been made yet. “It is only a policy decision. The final decision will come after the selection of a technical committee.”

Biman is yet to form the committee, he added.

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