Finance Minister AMA Muhith has asked the management of Biman Bangladesh Airlines to prepare a 10-year business plan for making it a profitable enterprise from its sorry state.
He directed the authorities of the national flag carrier after approving a state guarantee against a commercial loan of US$290m taken from a multinational bank to help survive the state enterprise.
“Biman has become a dysfunctional organisation since its inception due to constant losses over the years,” he told reporters after a meeting of non-concessional loan committee at the finance division yesterday. “We cannot also avoid our own responsibilities in building up its own capacity to run the national flag carrier on its own.”
The airline is taking the loan from Standard Chartered Bank to pay Boeing for two aircrafts bought earlier for the national flag carrier.
Presided over by the minister, the meeting was attended by Bangladesh Bank Governor Aitur Rahman and Biman Managing Director Kevin J Steele.
“The government did not give facilities to enhance the financial capacity of Biman. As a result, the fleet is still unable to fly on its own wings,” said the minister, defending the need for fresh financing to the enterprise. “However, it will not be possible to make it profitable over night.”
Biman bought two aircrafts during the last caretaker government under an agreement with Boeing and the government is now giving the guarantee against the loan so Biman could pay Boeing.
Last month, Biman authorities had expressed its utter fear of becoming a bankrupt airliner soon as it apprehended relevant companies such as Boeing, general electric, leasing companies and fuel companies might put cash-hit Biman on “cash only” categories as the financial deficit of the company rose to over Tk1,500 crore.
It would virtually force the company to cease its operations in the coming days, it apprehended.
Kevin stressed on the need for injecting around $200m as soon as possible to face the ongoing financial crisis and sought government help in arranging a commercial loan in preferential term.
Total deficit of Biman now stands Tk1,502 crore while the outstanding dues stands at Tk1,589 crore and available funds stands at Tk87.31 crore, according to a Biman statement as of December 15 last year.
