[ALOCHONA] Biman: Intends to buy 8 Boeing aircraft for USD 1.26 billion

Biman to buy 8 Boeing aircraft for $1.26b
Courtesy New Age 11/3/08

 

Biman Bangladesh Airlines Limited will sign its biggest ever purchase deal worth $1.26 billion with the Boeing Company for procuring eight new generation aircraft for its dwindling fleet.
The national carrier, in a landmark decision, will ink a memorandum of understanding with the US jetliner manufacturer by March 15 for four Boeing 777-300 and four 787-8 wide-bodied aircraft to be delivered in phases between 2013 and 2017.
The manufacturing company would extend all facilities for taking 777 series aircraft on lease for the interim period.
Average price of a 777 series aircraft is $183 million while that of a 787 aircraft is $133 million. The capacity ranges from 394 and 463 passengers.
‘This is for the first time Biman, in a landmark development, is going to make an aircraft purchase agreement directly with the manufacturing company. This will be the biggest ever deal in 29 years’ history of the national flag carrier,’ said Mahbub Jamil, special assistant to the chief adviser in charge of the civil aviation and tourism ministry, at a press briefing at his office on Monday.
The remodeled board of Biman took the decision Sunday night at a marathon meeting at the Biman headquarters, Balaka, in Dhaka.
‘Neither the ministry nor any other authority has imposed this decision. The Biman board for the first time took the decision for purchasing aircraft independently and in a transparent manner,’ he said.
Earlier, planes were procured through third-party negotiations, while route planning was even guided by political considerations, he said.
Eighty-five per cent of the total cost for purchasing the eight aircraft would be provided by the EXIM Bank of the USA as loan for 12 years at six per cent interest rate while the rest would be met by a consortium of local banks, the special assistant, who is also the chairman of the Biman board, mentioned.
The national airlines would not take any fund from the exchequer, he added.
However, Biman, a public limited company since July last year that hopes to see a turnaround from decades of loss-making, will have to pay $1.54 million from its own fund for initial agreement with Boeing.
The carrier has already leased a 747-200 series aircraft for six months from a Nigerian company. It would land on March 12. Another 747-200 aircraft would be taken on lease in October this year for operating hajj flights.
Mahbub Jamil said Bangladesh would soon ratify the Cape Town Convention to get concession on bank interest.
Adjourned on March 3 after a long discussion on fleet modernization and route planning, the second meeting of the reconstituted board of Biman Bangladesh Airlines Limited lasted over five hours with the special assistant in the chair.
The ten-member board, which now includes members having expertise in marketing and aviation, is yet to take any decision on the offer of France-based Airbus as the fleet committee earlier recommended for procuring eight airliners from Boeing and two from Airbus.
The European aircraft maker will make another presentation on its offer in ten days, the special assistant said.
Jamil hoped that Biman would start making profit from the next year. He said the Dhaka-New York route which was suspended one year and a half back would resume early next year soon after Biman gets the 777 series aircraft on lease as agreed with the US plane maker. The services would see major re-branding by then, he said, hinting at the new board’s plan to give the carrier a new look.
Earlier on February 24, the interim administration reconstituted the board of Biman seven months after the corporatisation of the state-owned enterprise, plagued by chronic losses and poor services.
Jamil, inducted in the expanded cabinet from the private sector, was made the chairman of the new Biman board, ending decades of dominance of bureaucrats over the policymaking in the national carrier.
Until then cabinet secretary Ali Imam Majumder was the chairman of the board.
Biman, left with four old DC-10s, three Airbuses and four F-28s in its fleet, stopped flights on major international routes and also squeezed its domestic operations. It now flies on 20 international and three domestic routes with 11 aircraft in its fleet and 3495 employees.
Presently, Biman owes Tk 1196 crore to Bangladesh Petroleum Corporation and Tk 576 crore to the Civil Aviation Authority of Bangladesh in outstanding bills, said Biman managing director MA Momen, who also attended the press briefing, among others.

 

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