GMG to buy six Boeing aircraft for $900m

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Mushir Ahmed
The country's biggest private airline GMG will buy six new Boeing aircraft for 900 million dollars as it plans a major route expansion in southeast Asia and in the Gulf, the company chief said Sunday.
The company will buy three Boeing 777-300ER and three 787-9 aircraft between 2012-2017 as part of its plans to emerge as a leading airline in the region, managing director Shahab Sattar said.
"We've finalised the deal with Boeing. We are now at the final stage of negotiations with our financiers. We hope we can sign the purchase deal within the next six weeks," GMG managing director Shahab Sattar said.
A Kuwaiti financing company and International Finance Corp, the World Bank's private sector arm, are negotiating with GMG to fund the purchase, he said.
GMG is the second Bangladesh carrier to announce a deal with Boeing. On Saturday, the national carrier Biman signed a 1.26 billion dollar deal with the US aviation giant to procure brand new four Boeing 777-300ER and four 787-8 aircraft.
Boeing officials could not be contacted for comment on the GMG deal.
"The company needs new fuel-efficient aircraft for its future expansion. That's why we have been negotiating with Boeing for over six months to procure its most modern aircraft," he added.
Sattar said under the GMG's route expansion plan, the company will fly to Abu Dhabi via Dubai from Chittagong next month. It will also fly to Kuwait and Muscat in the same month.
In May it plans to fly to Karachi and Singapore, for which it has already got slots, and also in Hong Kong, the gateway to China.
GMG will also fly to the most lucrative destination of Saudi Arabia and Qatar in the later half of the year should the government modifies air services agreement with the two nations, incorporating slots for private airlines.
Next year, GMG plans to fly to two European cities including London, home to the largest concentration of expatriate Bangladeshis.
GMG currently has a fleet of seven aircraft including three small Dash-8s, two MD-82s, one Boeing 737-900 and a Boeing 747-200.
The company will lease another 747-300 by April 15, two more MD-82s by May for the regional flights, he said, adding two more 767-300s would join the fleet by this year for flying to long-haul destinations.
"We will double our international destination to twelve by this year," he added.
GMG currently operates six regional routes to Kolkata, Kathmandu, Bangkok, Kuala Lumpur, New Delhi and Dubai.
The company chief said his 10-year-old company planned the purchase and the expansion after posting its first ever profit on turnover of Tk3.00 billion last year.
He did not disclose the size of the profit. But this year, GMG's turnover is expected to total nearly Tk 13.50 million dollars, he said.
"Already, the first month's traffic of our Dubai flights show that we are very much on target," he said. The Dubai flight, so far the GMG's biggest destination, started on February 1.
Passengers are expected to triple to one million with the addition of daily flights to Dubai and the planned operation of five more flights, he said.
"We are confident we can pay off our accumulated losses of over Tk 450 million by this year," Sattar added.
He said his company is not 'worried at all' by Biman's expansion of fleet.
"Biman has some aged aircraft. Soon they will have to replace them. And the new aircraft will only replace the older ones, making it difficult for them to expand quickly.
"Besides, Bangladesh's air traffic is growing so fast that it may double by 2015, allowing everyone to have their shares of the pie," he said