Aircraft being bought directly from manufacturer for the first time

The national carrier, Biman Bangladesh Airlines Ltd, on Tuesday signed an agreement with US aircraft maker Boeing to buy eight new planes for $1.26 billion as part of a fleet overhaul to make the airline profitable.( The New Age BD)

‘We want to give Biman a new face,’ said special assistant to the chief adviser on the civil aviation ministry, Mahbub Jamil, at a press conference after the signing of the agreement.

Biman’s managing director MA Momen and Boeing’s contract manager Glen A Green signed the agreement at the Bangladesh Airlines Training Centre in Kurmitola on behalf of their organisations.

Biman also signed a memorandum of understanding with Boeing to buy two 737 planes for its regional routes, which will be delivered by 2015. Biman has yet to negotiate the price, but each plane might cost around $54 million, said the special assistant.

‘We will make Biman a competitive airline in the region,’ said Jamil, adding that this was the beginning of a new life for the ailing carrier which has become infamous for unbridled corruption, mismanagement, erratic flight schedules and poor in-flight service.

‘This is a new beginning for Biman,’ said the special assistant.

The eight planes will increase Biman Bangladesh Airline Ltd’s fleet strength to 19. The present Biman fleet has four DC-10s, three Airbus planes, a Boeing-747 and three F-28s for operating its domestic and international flights.

According to the agreement, Boeing will hand over the 463-seat 777-300 ER in 2013 and the 294-seat 787-8 in 2019 and 2020, Jamil said.

Earlier, Biman’s board reviewed bids from both Airbus and Boeing, but chose the US company as it proposed to train pilots, upgrade airports and help in engineering and marketing as part of the deal, said Jamil.

He said Biman would save $70 million because of the Boeing’s offer to provide such facilities.

‘It is the first time in Biman’s 35-year history that the national flag carrier is purchasing aircraft directly from the manufacturer, and it is being done transparently,” said Jamil.

He said that Biman would use its own fund and loans from Exim Bank of US and other banks and financial institutions at home and abroad to buy the planes.

MA Momen said the deal would be a ‘strategic partnership’ between Biman and Boeing.

The US ambassador in Bangladesh, James F Moriarty, said that he was pleased to see that Biman had chosen Boeing for increasing its fleet capacity. He added that Bangladesh was initiating ‘unprecedented reforms’ in every sector including aviation.

Before the new planes are delivered, Boeing will lease Biman four 777-300 ER planes in 2009 and 2010 to help the airline cope with the growing passenger load.

Jamil said the Dhaka-New York route, which was suspended one and a half year back, would be resumed in October after Biman gets the 777 series planes on lease from Boeing, as per the agreement.

Hamstrung Biman, which incurred a loss of Tk 1,000 crore in the 2006-07 financial year, has already laid off 2,000 workers and has suspended eight loss-making international flights and four domestic routes in line with its restructuring drive.

‘Biman is still overstaffed,’ said Jamil, adding that the national carrier has planned to sell its unprofitable printing press business.

Jamil, however, hoped that Biman would start to make a profit soon after bringing about over-all reforms in the national carrier.

‘We hope to reach break-even this year...as we have made Biman more efficient,’ he said.

The special assistant also said the government has shouldered all the liabilities of Biman to allow it to start anew with a fresh account.