No signal yet on fresh govt fund to bail out Biman
Saturday, 18 August 2007
A proposal to pump emergency funds to salvage the cash-strapped Biman did not get the go-ahead from the government even over the past two months, reports bdnews24.com quoting an official Friday.
A second proposal made seeking four new planes to keep the ailing airline's schedule normal has also hit snag, said MA Momen, managing director of Biman Bangladesh Airlines.
Momen said a huge investment was necessary to pull the airline back into profits.
He said unless they received a good amount of fund from the government it would be almost impossible for Biman to remain in the air.
"A huge investment is necessary to make Biman profitable. But over the past 15 years it didn't get that. Biman runs with its own fund," Momen said.
"The government is giving subsidy to other departments including the railway. So why not Biman?" he said.
The Biman boss also said they placed a proposal seeking the official fund in June but there was no progress.
They did not specify the amount but had made it clear that the company needed a good amount of money to keep it going.
"At the same time we asked the government to provide four wide-bodied aircraft. But we didn't get any response," he said.
The present interim government initiated a process to restructure the Biman and a committee was formed in March to make it happen.
The committee recommended slashing down the manpower by at least a half as part of the reforms.
Later, the council of advisers approved a proposal to turn the entity into a public limited company (PLC).
In June the government took up a "golden handshake" project and sent some 1,863 officers and employees on early retirement under the programme. In July Biman became a PLC.
Years of unbridled corruption, mismanagement and choosing too many non-profit routes in recent years have made the state-run concern a liability.
According to the officials concerned, Biman suffered a record loss of $120 million last fiscal year.
It owed Bangladesh Petroleum Corporation (BPC) Tk 15.64 billion (1564 crore) until December 31, 2006 in oil bills alone.
The officials also said it needs to spend a huge amount of money to repair the older aircraft of its fleet.
Biman last year closed international flights to Tokyo, New York, Paris, Brussels, Frankfurt and Mumbai to cut the losses.
It is now operating international flights to only 20 destinations.
Currently it is operating flights to only Chittagong, Cox's Bazar and Sylhet after authorities suspended flights to Jessore, Rajshahi, Barisal and Syedpur.
The national flag-carrier has five DC-10s, four Airbuses and four F-28 planes.
The DC-10 aircraft are at least 20 years old while the airbuses were brought in 1990.
A second proposal made seeking four new planes to keep the ailing airline's schedule normal has also hit snag, said MA Momen, managing director of Biman Bangladesh Airlines.
Momen said a huge investment was necessary to pull the airline back into profits.
He said unless they received a good amount of fund from the government it would be almost impossible for Biman to remain in the air.
"A huge investment is necessary to make Biman profitable. But over the past 15 years it didn't get that. Biman runs with its own fund," Momen said.
"The government is giving subsidy to other departments including the railway. So why not Biman?" he said.
The Biman boss also said they placed a proposal seeking the official fund in June but there was no progress.
They did not specify the amount but had made it clear that the company needed a good amount of money to keep it going.
"At the same time we asked the government to provide four wide-bodied aircraft. But we didn't get any response," he said.
The present interim government initiated a process to restructure the Biman and a committee was formed in March to make it happen.
The committee recommended slashing down the manpower by at least a half as part of the reforms.
Later, the council of advisers approved a proposal to turn the entity into a public limited company (PLC).
In June the government took up a "golden handshake" project and sent some 1,863 officers and employees on early retirement under the programme. In July Biman became a PLC.
Years of unbridled corruption, mismanagement and choosing too many non-profit routes in recent years have made the state-run concern a liability.
According to the officials concerned, Biman suffered a record loss of $120 million last fiscal year.
It owed Bangladesh Petroleum Corporation (BPC) Tk 15.64 billion (1564 crore) until December 31, 2006 in oil bills alone.
The officials also said it needs to spend a huge amount of money to repair the older aircraft of its fleet.
Biman last year closed international flights to Tokyo, New York, Paris, Brussels, Frankfurt and Mumbai to cut the losses.
It is now operating international flights to only 20 destinations.
Currently it is operating flights to only Chittagong, Cox's Bazar and Sylhet after authorities suspended flights to Jessore, Rajshahi, Barisal and Syedpur.
The national flag-carrier has five DC-10s, four Airbuses and four F-28 planes.
The DC-10 aircraft are at least 20 years old while the airbuses were brought in 1990.