Biman Bangladesh airlines is seeking yet further government guarantees to borrow $109m for two Boeing 737-800 aircraft.
This is a very bad idea. It follows news the state-owned airline incurred losses of over Tk100cr after having one of its two leased Boeing 777s grounded while awaiting delayed engine repairs in Egypt.
This was only one of some 15 times that these two aircraft, which were leased with the intention of re-opening flights to New York, have been grounded, during the last year.
To make matters worse, there is no sign yet of Biman being able to reopen services to the US, meaning that it would have been better off allocating the monies it has spent on planes which are more suitable for short and medium-haul flights.
Biman’s failure to make profitable use of its flagship aircraft adds to the weight of evidence that that its management is unlikely to be able to rein in its heavy losses. Overstaffing and mismanagement are rooted too deeply in the culture of the state-owned airline for changes in CEO to make much of a difference.
It is untenable for the tax-payer to continue to prop up the loss-making airline. The government must stop dragging its feet and act on the logic of turning it into a public-limited company in 2007 and move towards full privatisation.
Putting Biman into the private sector is the only practical way to bring the reforms Biman needs, and to stop its endless drain on tax-payer resources. Passengers will not suffer as they are already well-served by better managed airlines.
Government funds can be better spent on improving airports and expanding flight engineering, training, and maintenance facilities to make the country an attractive hub for air travel.
