The Biman Bangladesh Airlines was given the shape of a company to enhance its professional skills and operate it as a commercial entity. With one and a half decades down the line, the situation has instead deteriorated and it turned into a bureaucracy-dependent company.
The national flag carrier is losing its business not due to operation of private flights on some domestic routes, rather for its pervasive irregularities, mismanagement, and failure to take timely decisions.
Recently, the number of aircraft in the Biman fleet has increased, so does the passenger pressure. Still, the state-run company is struggling to operate, with profits in some years and losses in the others. There are also questions regarding its profit calculation.
According to a Prothom Alo report, the Biman Bangladesh Airlines made a profit of Tk 286.5 million in the 2022-23 fiscal year. But questions have arisen whether this national flag flier is actually making a profit or displaying a profit by juggling figures. Large debts are not being showed in it’s financial statements.
In a report submitted to a parliamentary committee, the commercial audit directorate noted that Biman's actual financial status is not being depicted. It is the business profits of Biman's subsidiary companies outside of the airline sector that are being used to show that Biman is a profitable organisation. In the 2022-23 fiscal, Biman Bangladesh Airlines made a net loss of Tk 259.1 million in its main airline business.
The report stated that Biman owed the civil aviation authority huge sums of money for landing charges, boarding charges, leasing, surcharge as well as VAT and taxes on other charges. These liabilities were not shown on the financial statements of the past five years. The five-year financial statement also left out the huge amount owed in interest due to delayed payments to Padma Oil Company.
According to concerned sources, Biman Bangladesh Airlines conducts flights to 23 international and eight domestic destinations. Biman's basic function is to carry passengers and cargo. Biman has certain services outside of this. This includes ground handling and cargo handling at Hazrat Shahjalal International Airport, Biman Flight Catering Centre (BFCC), Biman Poultry Complex (BPC), etc. These are not direct businesses of the airlines company, but Biman used these sectors to show that it is making a profit.
Of the operating income, ground handling service income totalled nearly Tk 12.08 billion. The report went on to state that the over Tk 38.65 billion in surcharge and other charges (VAT and Tax) owed to the Civil Aviation Authority of Bangladesh for 2022-23 was not shown as Biman's liability. If the liabilities are counted, the national flag carrier will register losses, instead of profit.
It is actually a type of eyewash. When all other airlines are making profits, why is the scenario different for the Biman? Why does it require adding its subsidiaries’ profits to the financial statements?
Shafiul Azim, managing director of the state-run airlines, sees the profits as reasonable as the two subsidiaries belong to Biman. If it becomes reasonable, why are they not disclosing the dues to the civil aviation authority?
The Biman aircraft should pay the airports in exchange for services, like the private or overseas aircraft do. The two entities are different, though under the same ministry. The national flag carrier should shift its policy and attract passengers by enhancing the service quality.