Search urgently for partner, chalk out 5-yr business plan

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Jasim Khan The Ministry of Finance (MoF) has asked Biman Bangladesh Airlines to immediately start looking for a strategic partner to make the national flag carrier operationally sound and financially viable. The Treasury and Loan Management Department of the ministry in a letter last week said the government had set two conditions for Biman -- finding out a strategic partner and chalking out a five-year business plan, when the ministry provided pre-delivery guarantee for two Boeing aircraft. But Biman had yet to comply with any of the conditions set by the government. Khandaker Rashedul Amin, Assistant Secretary of the finance ministry, signed the letter and sent it to the Managing Director of Biman. The government is currently searching for a strategic partner to run and manage its flag carrier, hopping to find a foreign airline to either purchase a stake in the airline, or take responsibility for its management. The airline is reportedly pursuing Singapore Airlines, Emirates, British Airways, Qatar Airways and Thai Airways. The deteriorating performance has forced the government to initiate the move. The national flag carrier incurred a record loss of Tk 5.45 billion (Tk 545 crore) in the last fiscal (2011-12) due to suspension of routes, engagement of excess manpower, high interest payments, and widespread corruption, sources said. It also faced a substantial demurrage due to paying high interest charges to different government agencies and financial institutions. Biman owes Tk 3.54 billion to its fuel supplier Padma Oil, more than Tk 3.7 billion to the Civil Aviation Authority of Bangladesh, and Tk 680 million to the National Board of Revenue (NBR) in travel taxes, Biman officials said. Biman incurred an operating loss of Tk 5.16 billion in fiscal 2010-11, although it earned profits during the tenure of the last caretaker government. According to its balance sheet, the national flag carrier incurred Tk 2.79 billion in operating loss in fiscal 2009-2010. The cash-strapped national flag carrier has for years been talking about privatisation by bringing in a foreign airline partner, but all these attempts have failed in part because of the employees' and politically-driven opposition. Employees fear job losses and they have been successful in having previous privatisation efforts withdrawn, in part by threatening strike. But now the airline admits to being in more serious financial trouble than ever before, and the government has issued new international tender notices advertising for a strategic partner. Biman's fresh attempt to bring in a foreign partner comes up as it prepares to face a new competition. Private airlines -- United Airways and Regent Airways -- are competing with Biman.