The Bangladesh Journal - Saving Biman the national airline

Syed Ishtiaque Reza : Last week a private TV channel reported that the flight schedule of Biman Bangladesh Airlines has collapsed. The management is facing the toughest time to maintain discipline because of shortage of aircraft. The airline has now only four DC-10 to operate in the 32 international routes. Besides most of the times the aircraft spend time in the hangers for repairing works.

The national flag career -- Biman Bangladesh Airlines -- is passing its worst time now. Huge burden of debt, continuous loss, overstaffing, shortage of aircraft and many other drawbacks badly affected the flight schedule of the airlines. Inefficiency, mismanagement and corruption are synonyms to Biman. No organisation can continue for such a long period with all these negative elements. Successive governments over the years tried to salvage the sinking airlines. But all policies were actually taken at the cost of the country's economy.

The government on many occasions arranged bailout funds for this losing state owned enterprise (SoE). Biman had gone through such experiences many times while arranging funds for paying its huge debts to the Bangladesh Petroleum Corporation and salaries to its staff. The airlines over the years has been looking for a strategic partner. But its image in the international aviation market is so poor that the response from other international airliners had been very poor. Even at this critical stage all the trade union bodies of Biman including the pilot association and officers association until recently were against any retrenchment move by the government.

After the imposition of emergency on January 11 last, the process started by the interim government to salvage Biman financially. The authorities concerned took various moves to make the national flag career viable. It is high time for a change if everyone concerned wants to see the national flag carrier survive, grow and compete efficiently with other international airliners.

But without the much-needed changes in the management, manpower and fleet strength, it would be hard to keep the Biman afloat in the near future. It is highly unlikely that the general investors would respond positively to Biman's bid to mop up resources from the capital market to overcome its financial difficulties.

Against this backdrop, last week the government decided to rationalise the manpower of the Biman Bangladesh Airlines through retrenchment of as much as 50 per cent of the current workforce by June 30. This is indeed a positive development. The national flag carrier currently has about 6,800 officials and employees for a fleet of five old DC-10s, three Airbuses and four F-28s -- by far the highest man-aircraft ratio in the global aviation industry.

Such overstuffing cannot be justified by any logic. Civil aviation and tourism adviser MA Matin says, as of March 2007, Biman has a financial deficit of about Tk 20 billion. And there is no denying the fact that much of it has been due to rampant corruption and irregularities. It was discussed in the Biman's board meeting that the airline loses around Tk 40 billion every year because of corruption. M A Matin, a retired military general says, it makes little sense to strain the public exchequer for an enterprise that not only has seen any profit for years, but also shows little signs of making a turnaround. The choice, therefore, he says, is to make it commercially viable. But Biman cannot be commercially viable if it has to bear the burden of such a huge workforce -- a substantial section of which is obviously redundant.

Pilot association's president in his immediate reaction said the retrenchment process should be transparent and carried through in a well-planned manner. He is right. There should be no scope for any controversy or allegation of double standards or favouritism to crop up at any stage of the retrenchment process.

A holistic approach is needed to salvage Biman. Shedding half of its current workforce or turning it into a public limited company would make little difference, if corruption and irregularities continue to plague the national airline. Over the years it was heard from many ministers, government officials and even high ups in Biman about rampant corruption and irregularities in the national airline. But the nation did not see any effective step to rid it of corruption. If Biman has become a den of corruption and irregularities, the responsibility lies not only with the people who have actively indulged in corrupt practices but also with those whose inaction has allowed the corrupt people to continue their misdeeds with impunity. They also deserve punishment and the government should ensure they are punished as well.

The government has to come up with a well-planned strategy to make the Biman a profitable entity within the shortest possible time. However, it would require a lot of courage and determination on the part of the government to get the above-mentioned tasks accomplished. So, before spending money on auditors or credit rating agencies, the Biman authorities should search their souls first whether they would be able to carry out reforms in Biman to the liking of the would-be investors.