Biman To Expand Fleet and Network En Route Back to Profits

AIN AIR TRANSPORT PERSPECTIVE » OCTOBER 7, 2013

by  NEELAM MATHEWS

The Bangladeshi government has tasked Biman Bangladesh Airlines CEO Kevin Steele with returning the carrier to profitability and preparing it for an initial public offering in 2014 or 2015.

October 7, 2013, 3:05 PM

Biman Bangladesh Airlines, which has operated at a loss since 2008, expects to break even in the current 2013/14 financial year and to return to profitability the following year after cutting its losses from $75 million in 2010/11 to $25 million in 2011/12. At a press briefing in New Delhi last week, the Asian carrier’s CEO, Kevin Steele, announced plans to rationalize and double the size of its fleet from eight to 16 aircraft to allow it to expand its route network with new services such as Dhaka-New York starting next April.

The Bangladeshi flag carrier has issued a request for proposal to wet-lease a pair of Boeing 777s to add to the two 777-300s already in its fleet, which also includes two 737-800s and two Airbus A310s. It plans to retire two DC-10s as it awaits first deliveries of six 787 Dreamliners from Boeing, starting in 2018. In 2007 Biman ordered ten 777-300s and awaits delivery of the remaining eight–equipped with two-class cabins seating 419 passengers–between the end of this year and 2019. Under Bangladesh’s current FAA Category 2 status, Biman may operate flights to and from the U.S. with aircraft wet-leased from either a U.S.operator or a foreign air carrier from a Category 1 country, allowing it to accelerate route expansion in the meantime.

Biman also seeks a five-year dry lease for a pair of unspecified regional turboprops to offer more short-haul services to Indian destinations such as Guwahati and Bhubaneshwar. Plans call for Biman to increase service frequency between Dhaka and the Indian city of Kolkata from five per week to twice daily by the end of this month. The airline already operates to New Delhi and now wants to expand its Indian network to cities such as Chennai, Bangalore and Mumbai. Steele told AIN that he would like to break into the Canadian market but Biman’s options remain constrained by restrictive bilateral agreements. On October 2 the carrier confirmed that it also wants to launch service to Guangzhou and Kunming in China, but that it hasn’t yet secured slot approval for the services.

The Bangladeshi government has approved plans for an initial public offering once Biman achieves profitability. The International Monetary Fund has recommended that the carrier seek an alliance with a wealthy Arabian Gulf carrier and Steele indicated that Abu Dhabi’s Etihad Airways stands as a likely candidate. Steele formerly worked for Etihad and British Airways.

In a bid to modernize its operations and infrastructure, Biman has signed a 10-year contract with Sita to upgrade its communications systems and to start using a cloud-based IT network. It also plans to introduce Sita’s CrewTablet product to allow flight crew to operate more efficiently.