Imperatives for shoring up Biman's performance
Shahiduzzaman Khan | Thursday, 31 July 2008
Slowly but steadily, the country's private airlines are increasingly coming into limelight with their willingness to offer best services and hospitality. Earning hefty profits apart, these young airlines are making Bangladesh known to the outside world.
When the national Biman Bangladesh Airlines could not score well in every discipline of its business and passenger services, these private airlines - four in number - are widening their network to the outside world with renewed vigour and sincerity. Two of such airlines have already opened their routes to international destinations while the others are in the process of opening. Despite substantial hikes in jet fuel prices, these airlines are making their existence felt to everybody.
According to reports published in the media this week, Best Air has just launched a new international route to Colombo and Male, hoping to handle a good number of passengers ahead of SAARC summit in Colombo. However, the maiden flight to Male landed in technical trouble and reached Male 16 hours behind schedule. The airline has also got permission from the Civil Aviation Authority of Bangladesh (CAAB) to operate four flights a week on Dhaka-Kuala Lumpur route. Earlier, it started its journey in 1999 as a helicopter operator and then started its operation as a freighter airline in 2000. Later, it obtained licence in 2006 from the CAAB to operate passenger service in the international and domestic sectors.
The country's first private carrier -- GMG Airlines -- earlier this year targeted an ambitious Tk 13.50 billion turnover. The latest hike in jet-fuel has reportedly caused snags to its operational flights. Two more private airlines -- the United Airways and the Aviana Airways-- have been planning expansion of their operational flights. However, the situation in the aviation sector, as far as the private airlines is concerned, will need to be carefully watched in the light of the latest developments concerning the fuel-price hike.
There is no denying that the ever-growing demand for air transport on domestic and international routes prompted some ambitious local entrepreneurs to launch these private airlines in Bangladesh. A rough estimate says nearly 4.0 million passengers fly from Zia International Airport (ZIA) to different foreign destinations every year, while about 0.18-0.24 million more aspiring passengers cannot travel to the Middle East due mainly to the seat-crisis. According to a study, the possibility of getting a ticket to a European or American destination just before a week is only one to two per cent. It stands at 20 per cent if the passenger tries one month before the journey. As such, there is a large scope for Bangladeshi private carriers to operate in Bangladesh, if the same are efficiently run and managed and remain financially sound.
The state-owned Biman Bangladesh Airlines is the flag carrier of Bangladesh, and has been in existence for 35 years. For most of these years it has posted a loss. Occasionally, it did make profit, but only marginally. In any case, not many people are yet hopeful about the future of Biman. Perhaps they are unable to appreciate, or are not convinced about, how a public limited company (PLC) fully owned by the state is any different from the current status, and how it will turn Biman around. It is also not fully clear how the government made alternative plans to make Biman more efficient and competitive to increase sales and profit.
When one compares Biman with other airlines, the common parameters are the balance sheet, management, skill level of the workforce, remuneration, safety record and image. Biman does not score high on any of these, and its image has taken a bite. Very recently, Biman has placed orders for some new generation aircraft to a renowned US-based company. It is to be seen how best it can operate these aircraft after their arrival.
For Biman to be more profitable, there has to be a suitable strategy to compete with other airlines, and an overhauling of its management. The management must have the freedom to plan and execute and, if Biman has to remain in place after corporatisation, the board members should be carefully chosen so that they are committed and spare enough time to give policy guidelines, oversee the affairs and hold the management accountable. To be an efficient and dynamic airline, Biman has to reinvent itself. It has to take advantage of the information technology (IT) to create a modern workplace conducive to efficient management and availability of real-time information.
Running an airline profitably in today's fiercely competitive world requires concentrated focus and skills. When private airlines are trying to take up these challenging tasks, the Biman has to confront the same, with boldness and dynamism, for its own survival. Restructuring, if properly implemented, should keep the national flag carrier afloat in the highly competitive aviation industry. szkhan@thefinancialexpress-bd.com
When the national Biman Bangladesh Airlines could not score well in every discipline of its business and passenger services, these private airlines - four in number - are widening their network to the outside world with renewed vigour and sincerity. Two of such airlines have already opened their routes to international destinations while the others are in the process of opening. Despite substantial hikes in jet fuel prices, these airlines are making their existence felt to everybody.
According to reports published in the media this week, Best Air has just launched a new international route to Colombo and Male, hoping to handle a good number of passengers ahead of SAARC summit in Colombo. However, the maiden flight to Male landed in technical trouble and reached Male 16 hours behind schedule. The airline has also got permission from the Civil Aviation Authority of Bangladesh (CAAB) to operate four flights a week on Dhaka-Kuala Lumpur route. Earlier, it started its journey in 1999 as a helicopter operator and then started its operation as a freighter airline in 2000. Later, it obtained licence in 2006 from the CAAB to operate passenger service in the international and domestic sectors.
The country's first private carrier -- GMG Airlines -- earlier this year targeted an ambitious Tk 13.50 billion turnover. The latest hike in jet-fuel has reportedly caused snags to its operational flights. Two more private airlines -- the United Airways and the Aviana Airways-- have been planning expansion of their operational flights. However, the situation in the aviation sector, as far as the private airlines is concerned, will need to be carefully watched in the light of the latest developments concerning the fuel-price hike.
There is no denying that the ever-growing demand for air transport on domestic and international routes prompted some ambitious local entrepreneurs to launch these private airlines in Bangladesh. A rough estimate says nearly 4.0 million passengers fly from Zia International Airport (ZIA) to different foreign destinations every year, while about 0.18-0.24 million more aspiring passengers cannot travel to the Middle East due mainly to the seat-crisis. According to a study, the possibility of getting a ticket to a European or American destination just before a week is only one to two per cent. It stands at 20 per cent if the passenger tries one month before the journey. As such, there is a large scope for Bangladeshi private carriers to operate in Bangladesh, if the same are efficiently run and managed and remain financially sound.
The state-owned Biman Bangladesh Airlines is the flag carrier of Bangladesh, and has been in existence for 35 years. For most of these years it has posted a loss. Occasionally, it did make profit, but only marginally. In any case, not many people are yet hopeful about the future of Biman. Perhaps they are unable to appreciate, or are not convinced about, how a public limited company (PLC) fully owned by the state is any different from the current status, and how it will turn Biman around. It is also not fully clear how the government made alternative plans to make Biman more efficient and competitive to increase sales and profit.
When one compares Biman with other airlines, the common parameters are the balance sheet, management, skill level of the workforce, remuneration, safety record and image. Biman does not score high on any of these, and its image has taken a bite. Very recently, Biman has placed orders for some new generation aircraft to a renowned US-based company. It is to be seen how best it can operate these aircraft after their arrival.
For Biman to be more profitable, there has to be a suitable strategy to compete with other airlines, and an overhauling of its management. The management must have the freedom to plan and execute and, if Biman has to remain in place after corporatisation, the board members should be carefully chosen so that they are committed and spare enough time to give policy guidelines, oversee the affairs and hold the management accountable. To be an efficient and dynamic airline, Biman has to reinvent itself. It has to take advantage of the information technology (IT) to create a modern workplace conducive to efficient management and availability of real-time information.
Running an airline profitably in today's fiercely competitive world requires concentrated focus and skills. When private airlines are trying to take up these challenging tasks, the Biman has to confront the same, with boldness and dynamism, for its own survival. Restructuring, if properly implemented, should keep the national flag carrier afloat in the highly competitive aviation industry. szkhan@thefinancialexpress-bd.com