To medicate or not to medicate Biman

Conservative Party's (present opposition party in the Parliament of Canada) annual convention will be held at Vancouver from 26th May to 28th May, 2016. I have been invited as a delegate giving an opportunity to participate in debate on policy resolutions and constitution amendments. All conservatives from across Canada will be gathering in this convention. It will take up a new challenge and begin building for the future growth and success under the interim Conservative Party leader, Rona Ambrose. Everybody is hoping that the future PM of Canada will be Rona Ambrose.
The present liberal government released its 2016 budget announcing a $29.4 billion deficit (Revenue $287.7 billion & expense $317.1 billion) although the past Conservative government had left $75 billion in surplus.
In this budget, worst hit was the Bombardier aircraft manufacturing company. Bombardier had requested for fund from the Provincial Government & Federal Government for bailout. The provincial government of Quebec agreed to provide $1.0 billion bailout for 49.5% stake in a new business that will own assets & liabilities of C series Commercial Jet programme. Bombardier thanked Canada for this bail-out fund by firing 7,000 employees. Bright side of Bombardier is that Air Canada signed a Letter of Intent (LoI) for the purchase of 45 CS300 aircraft.
In addition to $1.0 billion mentioned above, Quebec wants between $350 million and $1.0 billion from Ottawa (Federal Govt) for Bombardier. The Trudeau Govt is poised to create a controversy regardless of its decision, particularly with other Canadian industries and companies. Saskatchewan Premier tweeted about Quebec's Bombardier request and noted that Western Canada's troubled energy sector hadn't asked for a bailout.
Bombardier already has outstanding Federal loans. Since 1966, Bombardier received $1.3 billion in repayable contributions and has repaid $543 million so far.
That is why, a prominent newspaper has commented that Quebec's Bombardier bail-out is not an investment, it is corporate welfare.
Although bailout by Quebec is not sufficient, Bombardier will have a bumpy ride and uncertain future. If Bombardier concentrates on C Series aircraft, then how will it produce Turboprop Jets for Biman Bangladesh Airlines and arrange financing for Biman to buy 3 Dash8-Q400 aircraft? If a company requests for bailout money to get out of bankruptcy, which bank will finance additional fund to sell their products? No bank will take that risk. It is absolutely logical.
Biman management should wake up and give the not buying of Bombardier aircraft a sincere thought. If Bombardier has promised to provide bank financing, Biman must double check, otherwise, Biman will buy problems.
Biman has now 2 Dash8-Q400 aircraft on dry lease. The flight crew and maintenance engineers are trained now. Biman might think that it will save money. But it is for short term. For longer term, Biman should think of it. There are 2 players in the field of choosing aircraft for Bangladesh's domestic routes. It is Bombardier and the other one is ATR aircraft manufacturing company.
Choosing aircraft for domestic routes, ATR 72-600 aircraft stays at a higher edge than Dash8-Q400 aircraft in respect of aircraft operating cost, domestic route analysis and their break-even (BE) point. Thus, for the longer run, Biman will save a substantial amount of money.
The appropriate suggestion for Biman will be to call both the parties by the new chairman of Biman Board of Directors and allow them to give the presentation, especially on aircraft financing. If Biman Board of Directors fails to do that, then the Civil Aviation Ministry and the Finance Ministry should do that. After all, it is the government who will bear the responsibility and will provide guarantee against the financing of these aircraft.
The writer is a retired DC10 Flt Engr and Aviation Consultant now residing in Waterloo, Ontario, Canada. Email: [email protected]