Biman incurs losses of Tk 200m on flights to Narita, Japan
Biman Bangladesh Airlines has been incurring a staggering loss of over Tk 200 million every month from its flights to Narita in Japan, while the total loss in the first eight months of operation stands at Tk 1.66 billion.
According to sources, the national flag carrier suspended flight operations on the Dhaka-Narita-Dhaka route in 2006, in the face of continuous losses. After 17 years, the flight was resumed on 1 September last year, without reviewing its commercial viability.
An internal assessment found that the state-run airlines company has faced a whopping loss of Tk 1.66 billion until 30 April this year, or Tk 200 million in each of the eight months.
Multiple officials, both current and former, told Prothom Alo on the condition of anonymity that Shafiul Azim, the then managing director (MD) of Biman, and Salauddin Ahmed, then director for sales and marketing, played the key role in resuming the flight to Narita.
The resumption came when there was a growing tension between the Sheikh Hasina government and the United States, and French company Airbus approached the Bangladesh authorities to sell its aircraft. By resuming flights on the route, the Biman, which usually operates flights with US-made Boeing aircraft, attempted to create a demand for new aircraft from the Airbus.
Salman F Rahman, adviser to ousted prime minister Sheikh Hasina, was actively taking care of the procurement process. Apart from Narita, the national flag carrier also launched flights to Rome in Italy and Toronto in Canada without any feasibility test, to provide requisitions for more aircraft.
The new flights were branded as an achievement of the then government. In an apparent recognition of successful completion of the assignment, Biman MD Shafiul Azim was promoted as secretary, violating usual practice of seniority-based promotion, and assigned to the election commission. Meanwhile, director Salauddin retired from government service on 30 July.
Shafiul Azim could not be reached despite repeated phone calls and text messages, while Salauddin claimed to have conducted a feasibility study on the flights on behalf of the sales and marketing department.
Asked about the consistent losses from the flights, Salauddin said, “I am now in retirement and cannot recall the issue thoroughly.” He suggested approaching the current MD for more information.
Ashraful Alam, current director for sales and marketing, told Prothom Alo that he took over the charge a few days ago and is unaware of the issues.
The flight to Narita was first launched in 1979 and continued until 2006, with a short suspension in 1981. In the face of persistent losses, the national airlines company suspended flight operation on the Dhaka-Narita-Dhaka route in 2006, and that on the Dhaka-Rome-Dhaka route in 2015.
The flight to Rome resumed in March this year, but is bringing a loss of Tk 150 million per month, according to sources.
Biman operates the Narita flights with Boeing 787-800 aircraft, each capable of carrying 271 passengers. With 26 flights per month, including return trips, the airline had the capacity to carry 56,368 passengers during the eight months, but the number of passengers it carried during the period is only 27,691.
According to the Hazrat Shahjalal International Airport, Biman is the only airline that operates direct flights from Dhaka to Narita. There are eight other airlines that operate flights to Narita with transit or connecting destinations in third countries. They carried a total of 7,198 passengers to Narita during the eight months. .
All the airlines, including the Biman, carried a total of 34,889 passengers to Narita during the period, while the capacity of Biman only is 56,368 passengers.
Also, Biman’s ticket prices were considerably lower than those of competing airlines. It charged an average fare of $291 for direct flights, while other airlines offered connecting flights at an average price of $683.
Usually, the connecting or transit flights charge the passengers lower than the direct flights. The situation is completely opposite in the case of Biman Bangladesh Airlines, as it is operating direct flights and are charging fares that are two and a half times lower than those of the connecting and transit flights.
An internal report revealed that the national flag carrier generated $8.07 million in revenue from this route during the eight months, while the operation costs amounted to $21.92 million. The total loss stands at $13.84 million, or Tk 1.66 billion during the period.
Capt SM Helal, former president of Bangladesh Airlines Pilot Association, said frequent impunity and lack of accountability led to the situation in the national flag carrier. He hoped for accountability now thanks to the changeover in the government, and laid emphasis on identifying the corrupt officers and conducting cleansing drives.