Biman Bangladesh Airlines expects there will be failures in the Bangladeshi market as carriers have been expanding too rapidly and are suffering badly as a result of high fuel prices.
Managing director and CEO M A Momen said in an interview at the IATA annual general meeting in Istanbul that “we have so many airlines coming up in Bangladesh” and it is too many for the market to handle.
“I am more than sure that there will be some untimely deaths of airlines,” he says, adding that this will not just be in Bangladesh but also in other parts of the South Asian region.
“Going international does not simply give you money.”
Bangladesh’s airline sector has seen major change in recent years, with privately-owned GMG Airlines expanding aggressively into the international market and others, such as Best Air and United Airways Bangladesh, planning the same. Best Air only launched domestic services early this year and late last month began flying to Bangkok in Thailand.
The expansion of privately owned airlines has put intense pressure on state-owned national carrier Biman, which has been forced to radically restructure its operations.
Momen, who has been CEO for two years, has overseen a major programme of change that has seen the airline’s staff base reduced from around 7,000 to its current level of 2,800 permanent employees and 1,000 contract employees.
Biman has pulled off of many domestic routes and left them to the private players and is now operating in a more commercial manner as the current caretaker government in Bangladesh has had a “hands off” attitude, says Momen.
He says Biman’s losses have been reduced sharply, from 4.72 billion taka ($69 million) in the 2005/6 financial year to 2.72 billion taka in 2006/7 and to 980 million taka in 2007/8.
“When I joined Biman we were not even in a position to pay our staff. We had just survived a bankruptcy situation,” he says.
“This year I am sure that we will be able to make a profit.”
Momen says the carrier now has the confidence to plan properly for the future, which is why it recently ordered four 777-300ERs and four 787s from Boeing to replace its ageing Airbus A310s and McDonnell Douglas DC-10s.
It also signed a memorandum of understanding for two Boeing 737-800s, and is seeking narrowbody and widebody aircraft to lease before the purchased aircraft are delivered.
The new widebody aircraft will be used to help it return to destinations previously served, says Momen, such as New York JFK in the USA, Amsterdam in the Netherlands and Paris in France.
He also says the aircraft will help Biman launch new services, such as to points in China and South Korea, as well as Manila in the Philippines.
Source: Flightglobal.com's sister premium news site Air Transport Intelligence news
Source: Flight International
