Biman Bangladesh Airlines

Biman Bangladesh Airlines

Biman Bangladesh Airlines (Bangla:িবমান বাংলােদশ এয়ারলাইনস) is the National Flag Carrier of Bangladesh, with its main hub at Zia International Airport in Dhaka. It also operates flights from Shah Amanat International Airport in Chittagong and earns significant revenue from the connecting service to Osmani International Airport in Sylhet. Currently it provides passenger and cargo service in different international routes in Asia and Europe along with major domestic routes. It has Air Service Agreements with 42 countries; but maintains flights to only 18 at present. Until July 2007 the airline was wholly owned and managed by the Government of Bangladesh; on 23 July 2007, it was transformed into Bangladesh's largest Public Limited Company by the then Caretaker government of Bangladesh.[2]
Created in February 1972 with some old vintage aircrafts, Biman enjoyed an internal monopoly in Bangladesh aviation industry until 1996.[3] During next three decades, the airlines expanded its fleet and horizon (at it’s peak Biman used to operate 29 international destination with New York – JFK in the west and Tokyo – Narita in the east) but suffered heavily due to mass corruption and frequent mishaps. The major reason behind the airline's huge financial loss and bad reputation for poor service and regular flight cancellation / delay was its ageing fleet, with some of its long-haul aircrafts were banned for safety reasons by the aviation authority of the US and EU countries. Annual Hajj flights, transporting non-resident Bangladesh workers/migrants[4] as well as Biman's subsidiaries, form an important part of the carrier's business. Biman has a 2 star ranking out of 5 by Skytrax,[5] a United Kingdom – based consultancy. Currently the carrier is facing stiff competition from number of local private airlines as well as some international carriers targeting country's air transport sector that is experiencing 8% growth per annum due to large number of non-resident Bangladeshi.
After becoming a public limited company, Biman has trimmed the number of staff and turned its attention to modernizing the fleet. Biman strikes a deal with US aircraft manufacturer Boeing for procurement of 10 new generation aircrafts along with option/purchase right for another 10. The carrier is also in the process of leasing some aircrafts for the interim period to re-start flights to some of the destinations in Asia, Europe and North America.

History.

Boeing 707 at London Stansted in 1979
Biman Bangladesh Airlines was established on 4 January 1972 to be Bangladesh's national airline under the Bangladesh Biman Ordinance (Presidential Order No. 126).[6][7] The initiative to launch the national flag carrier, was taken by 2,500 former employees, including 10 Boeing 707 commanders and 7 other pilots, of Pakistan International Airlines, who submitted a proposal to the government on 31 December 1971 following the independence of Bangladesh.[8] The airline was initially called Air Bangladesh International but was soon renamed Biman Bangladesh Airlines.[9]
Biman is a Bengali word meaning airplane; it originates from the Sanskrit word vimana, a name given to a flying machine mentioned in ancient Vedic literature. The logo, painted on the tail, is a stylised white stork (Balaka in Bengali) inside a red circle. The initial livery was a dark blue line extending across the aircraft along the windows and covering the tail section. This was replaced in the 1980s by dark green and red lines, matching the colours of the Bangladesh flag, and has remained in place for over two decades. The Balaka has also given its name to the Biman headquarters, the Balaka Bhaban (Balaka Building),[10] and a landmark sculpture in Dhaka depicting storks is in front of Biman's former headquarters.[11]
On 4 February 1972, Biman started its domestic service on the Dhaka–Chittagong, Dhaka–Jessore and Dhaka–Sylhet routes with a World War II vintage Douglas Dakota and Douglas DC-3, both gifts from the Bangladesh Air Force.[8][12] On 10 February 1972, Biman experienced its first accident when the Douglas DC-3 crashed near Dhaka during a flight test, killing all five crew members.[13] A Douglas DC-6 was immediately leased from Troll Air, a Norwegian airline,[14] to keep the domestic service running.[8] On 4 March 1972, Biman started its international operations with a once-a-week flight to London using a Boeing 707 chartered from British Caledonian.[8] The short haul fleet was supplemented by a Fokker F27 from India on 3 March 1972 which saw the start of a daily flight between Kolkata (Calcutta) and Dhaka on 28 April 1972.[15] Three additional Fokker F27s were acquired during March and September of the same year bringing the number of Fokker F27 aircraft to four.[8] In the first year of operation, Biman operated 1,079 flights carrying just over 380,000 passengers.

Four additional Fokker F27s, purchased from Australia and the Netherlands, joined the fleet in 1973 enabling Biman to double the frequency of the Kolkata flight to a twice daily service.[15] A Boeing 707 was added to the fleet in September and the flight to London became twice weekly, while a Chittagong-Kolkata flight also began operating at the same time.[15] In 1974 operations were extended to Kathmandu (February), Bangkok (November) and Dubai (December).[15] In 1976, Biman sold two of its Fokker F27s and bought another Boeing 707 to extend international services to Abu Dhabi, Karachi and Mumbai.[15] Singapore was added to Biman's list of international destinations, when a third Boeing 707 was purchased in February 1977, followed by Jeddah, Doha and Amsterdam the following year which also saw the purchase of its fourth Boeing 707, from the United States.[15] In 1977, Biman was converted into a public sector corporation to be governed by a board of directors appointed by the government.[15] The airline broke-even for the first time in 1977–78, and made a profit the following year.[16] International destinations expanded to include Kuala Lampur, Athens, Muscat and Tripoli in 1979, followed by Yangon, Tokyo and Dhahran in 1980.[15]

Airbus A310-300 landing

In 1983, three Douglas DC-10s joined the fleet and the airline started to phase out the Boeing 707s.[15][12] The network expanded further to include Baghdad (1983), Paris (1984) and Bahrain (1986).[15] On 4 August 1984, Biman faced its worst accident when a Fokker F27 flying in from Chittagong crashed near Dhaka, killing all 49 on board including Captain Kaniz Fatema Roksana, the airline's first female pilot.[17] The long haul fleet was supplemented by the purchase of two new Airbus A310s in 1996 followed by the addition of two more in 2000, from Singapore Airlines and Air Jamaica, and another in 2003.[18]
In the 2005–06 fiscal year, Biman carried 1.15 million passengers, a growth of 70% from the previous decade's average. However, with the rise of private domestic carriers in Bangladesh, Biman's market share for domestic passengers dropped by 35% over the previous ten years' average, with only 162,000 passengers travelling with Biman in the domestic sector in the 2005–06 fiscal year. During the same period, Biman reported its biggest annual loss of over US$120 million (Tk8.3 billion), with a US$100 million (Tk6.9 billion) loss reported the following year.[19] Biman also fell behind millions of dollars in payments to its fuel supplier, the Bangladesh Petroleum Corporation.[20]

Management

The airline was wholly owned by the Bangladesh government through the Bangladesh Biman Corporation since its inception. In 1977, Biman was converted into a public sector corporation which afforded Biman limited autonomy, governed by a board of directors appointed by the government.[15] The authorised share capital was increased to Tk2 billion in 1987,[21] and Biman was transformed into a public limited company, the largest in Bangladesh, in 2007.
During the late 1980s, Hossain Mohammad Ershad, President of Bangladesh at the time, served as president of Biman. After an early period of expansion and growth, Biman entered an era of nose-diving profits and slow growth, exacerbated by incompetent and corrupt management; with padding of purchases, falsified repair bills and unprofitable routes kept in operation for political reasons.[22][23] Research conducted in 1996 found that Biman had 5,253 non-flying personnel, 30% more than Singapore Airlines which had almost a ten-times larger fleet. The report described Biman as "poorly managed, overstaffed, undercapitalized, and subject to excessive political interference in its day-to-day management."[24]
In the 1992–93 fiscal year, accounts under the Ministry of Civil Aviation and Tourism revealed that Tk22 million in tax was not paid to the Government. The audit carried out in 1999, also showed that Biman was owed Tk2.2 million by travel agents from the proceeds of ticket sales, most likely with the collusion of Biman officials.[25] Additionally, Tk2.4 million was overpaid as incentive commission to the sales agents in violation of Biman policies. In 2007, the caretaker government launched an anti-corruption drive which saw the arrest of Shamim Iskander, the brother of ex-prime minister Begum Khaleda Zia and a former Biman flight engineer, on multiple corruption charges.[26] This was shortly followed by the forced retirement of 35 other employees and officials, some of whom were close aides of Iskander.[27]

Privatisation

Due to the growing losses, which began in the late 1990s,[28][29] the government offered 40% of Biman to foreign airlines in 2004, hoping a buyer would take over the management of the carrier. However, the proposal demanded that many decision-making rights remain with the Bangladesh government, and the offer was ignored by outside airlines. A similar initiative in 1998 cost Biman US$1.6 million in consultancy fees with no positive results.[30]
In May 2007, the caretaker government approved plans to turn Biman into a Public Limited Company with shareholdings split between seven public sector organisations.[31] As a part of the restructuring, the government put in place a Voluntary Retirement Scheme (VRS) to reduce the man-equipment ratio (MER) of 367:1 (ratio of manpower to aircraft). The industry average at the time was 200:1, with other Asian airlines operating with MERs of around 150:1.[32] The VRS provided compensation based on length of service, at a cost to the government of over US$40 million. While Biman management had expected to reduce its workforce by 1,600 personnel, 2,162 applications for VRS were received, many from employees who expected to be dismissed with little or no severance if the quota was not achieved. Biman accepted 1,877 applications and affirmed that key personnel would not be allowed to leave the organisation via VRS.[33][32]
On 23 July 2007, Biman Bangladesh Airlines Ltd became the largest Public Limited Company in Bangladesh.[2] Earlier suggestions that the airline should be renamed Bangladesh Airlines Ltd were rejected.[34] The government is the sole shareholder of the 1.5 billion shares but intends to offer 49% to the private sector while retaining majority ownership.[35] The previous Managing Director, Dr. Abdul Momen, was appointed the CEO as well as MD in the new organisation. The six board of directors have been appointed from the ministries of energy, commerce, finance, civil aviation, foreign affairs and the cabinet division with the cabinet secretary taking on the role as Chairman. The six secretaries and a joint secretary to the civil aviation ministry have been made the seven shareholders of the new PLC.[35]
Following the privatisation, an initiative was launched by ex-Biman employees, who left the organisation via the VRS, to setup a competing airline.[36] Names proposed for the airline included Air Bangla International, Biman Employees Airlines and Balaka.[37] They were joined by previous managing directors of Biman, along with the former president of the Bangladesh Airline Pilots' Association.[36]

Services

Biman is notable for poor customer service and disruptions to its flight schedule which is reflected in its Star ranking from Skytrax,[38][5] a United Kingdom-based consultancy whose research is used by the UK government in formulating air transport policy.[39] The 2 star ranking (out of 5) is indicative of the poor standard of service provided by the airline which falls below the industry average.[40] In 2007, Biman faced strong criticism from major international airports including Heahthrow and Dubai International Airport for its failure to maintain flight schedules. Heathrow Airport operator BAA, wrote to Biman providing evidence which showed Biman had not achieved the minimum 80% usage of its allocated landing slots at Heathrow, as required by EU and IATA regulations, during summer 2007. Biman should therefore not expect slot allocations at Heathrow for summer 2008 and should look to Stansted or Gatwick airports if it wished to continue serving London.[41] However, following discussions with BAA, Biman obtained landing slots for the summer 2008 period on condition that it achieved 80% usage.[42]
A two-class service (J & Y) is operated on its wide-body airliners and a single class service on the smaller aircraft.[43] The Maslin Executive Class cabin on its Airbus A310s is setup in a 2-3-2 configuration while the setup on the Douglas DC-10-30s is a more roomy 2-2-2 configuration. The economy class cabins are setup in a typical 2-5-2 configuration.[44]
English and Bengali language newspapers are available on board the aircraft along with Biman's in-flight magazine, Digonto (Horizon) which is published quarterly. It covers a range of topics with emphasis on tourist destinations in Bangladesh and other places reachable by Biman.[45] While the majority of the content is in English, for an international audience, some features are available in other languages including Bengali.[46]
In-flight entertainment aboard Biman aircraft is rated "very poor" by Skytrax.[47] The Douglas DC-10-30s are equipped with a projector in each cabin while the Airbus A310s have monitors that drop down from the ceiling below the luggage racks in the center of the aircraft. While other airlines using modern aircraft are able to provide more personal in-flight experiences via seatback LCD screens, Biman's ageing fleet has maintained the standard equipment available when the planes were manufactured.[48][49]
Biman operates a frequent flyer programme which awards customers with a free round trip flight on production of ticket stubs for ten round trip journeys on Biman. The free ticket is for the route which has been flown the most out of the ten. Journeys on local routes are excluded from the offer.[1]
An agreement was signed with Amadeus in 2007 to upgrade Biman's ticketing system with an e-ticketing solution in order to comply with International Air Transport Association rules, which set out a deadline of 31 December 2007 for all member airlines to switch over their ticketing systems. E-ticketing has enabled major airlines, such as British Airways, to provide online check-in facilities reducing the need to queue-up at check-in counters. However, Biman has not indicated the adoption of e-ticketing would provide customers with an improved service apart from reducing its own costs and allowing it to meet increasing demand.[50] In 2005, Biman had briefly stopped using the Amadeus ticketing system when the government suspended the operation of a local Amadeus subsidiary following a court order, after allegations of money laundering.[51] However, the suspension, lasting only a month, was lifted after the writ was appealed in the High Court.[52]