24-hour overtime a day? Biman had to stop it

If one were to look for employees with the highest productivity in the world, then Biman's would certainly take the cake.

For years, Biman employees had been on 24-hour duty cycle.

But such incredible service hours were only found on paper, in employee records to be exact. In reality, they would enjoy a 12-hour overtime benefit against 12 working hours a day.

In this way, almost all staffers of the Biman Bangladesh Airlines used to draw double the amount they got in salaries.

They had regularised such unethical practice putting it in a legal framework, leading Biman to suffer recurring losses.

This is not an isolated instance; Biman's entire system was riddled with irregularities in such areas as ticketing, aircraft maintenance, procurement and other operational activities.

The good news is that Biman has gone through a massive facelift in its organisational operations over the last one and a half years.

Making overtime realistic, introducing full automation in ticketing, e-filing all office documents to reduce processing steps and irregularities, and introducing central procurement and tender systems to stop corruption – all have contributed to Biman's positive transformation.

Overtime made realistic

Biman's 4,500 staff, including permanent and temporary ones, were entitled to enjoy 24-hour overtime benefits.

A shift worker renders an 8-hour duty and additional 8 hours in overtime that would include a four-hour rest time.

Biman possibly was the lone organisation in the world where rest time was allowed during overtime.

To enjoy a 24-hour overtime benefit, an employee had to work from 6 am to 10 pm a day. In reality, shift workers would do their regular 8-hour duty and 2 to 3 hours in overtime, but it officially used to be recorded as 8 hours in overtime.

When an employee completed 16 working hours plus overtime, it was counted as 24 hours. Thus, they would draw more than double their salaries in overtime benefits.

For example, if a worker got Tk100 in regular salary per hour, overtime benefit would just double the figure.

Biman would spend Tk88 crore annually only in overtime benefits, which was 9% of its total expenditure on salaries. 

Biman management had allowed this unprecedented practice for long.

But things started to change with its current Managing Director Md Mokabbir Hossain. He started to work on making overtime realistic since he joined the company in September 2019.

Finally, from 1 January 2020, the unusual practice came to an end with overtime being reduced to only four hours.

Thus, Biman saved around Tk4 crore a month and around Tk50 crore annually, said Mokabbir Hossain.

Such an unusual practice had been going on for many years in Biman. His management addressed the issue and made overtime realistic to save money, he added.

Restructuring of aircraft maintenance, parts procurement

Aircraft maintenance and parts procurement were considered to be the biggest sources of corruption for Biman employees.

For instance, a chief engineer of Biman's engineering services department, who was removed last year for corruption, alone caused a loss of Tk53 crore to the company by procuring parts at higher prices and issuing work orders to foreign suppliers without following proper process.

Biman claimed Tk35 crore in fine for the loss from the chief engineer. 

Moreover, Tk57.63 lakh was embezzled in the name of purchasing and repairing fuel nozzles between July 2016 and December 2017.

An investigation carried out by the Ministry of Civil Aviation and Tourism in 2019 found substantial corruption in the procurement and servicing department.

After the finding, Biman's management brought about a massive change in the servicing and procurement system to stop irregularities.

Currently, maintenance and purchase of spare parts are being performed by the Original Equipment Manufacturer (OEM).

If the original manufacturer is unable to supply parts as required, the tender process is activated, according to Biman. A "Power by Hour" agreement has been made with the OEM to maintain aircraft engines.

Despite having necessary workforce and logistic support, previously, aircraft maintenance were being carried out by a third party, which opened avenues for excessive expenditure and unnecessary wastage on maintenance. This has stopped.

Development of motor transport department

The motor transport (MT) department has been converted into a service centre by introducing new service ramps and work stations, scheduling and fuel inventory management. Besides, the department is now capable of providing services commercially.

Biman's transport vehicles earlier were repaired and maintained outside. Facilities have now been developed to provide such services at the MT department.

MT support services have improved with regards to deep washing, AC servicing and maintenance.

The introduction of automation process

Delaying movement of files was another source of irregularities for Biman employees.

For instance, a retired employee had to go through 23 steps to get retirement benefits, causing them to suffer immensely. They had to spend speed money too.

From October 2019, all activities of Biman are being managed through e-file, which controls non-value added activities and expedites the decision-making process.

In 2020, Biman secured third position on the use of e-filing in official file management among 88 government organisations.

The introduction of automation reduced the pension processing steps from 23 to 3 only.

To improve performance and ensure accountability, SOP (Standard Operating Procedure) has been developed and implemented across the organisation.

Full automation in ticket sales

Biman was widely criticised for ticket manipulation as the ticketing system was handled manually, creating an artificial crisis and eventually, causing losses for the company. In many cases, Biman would fly empty, but passengers would not get tickets.

Then, in the wake of numerous allegations, the Ministry of Civil Aviation and Tourism initiated a massive overhaul of Biman in 2018 in a bid to weed out corruption.

Full automation in ticketing increased earnings for Biman. Mobile apps and online sales have been introduced.

Biman's sales of Hajj tickets doubled in 2019 compared to that of the same period in 2018 due to implementing automation in ticketing. 

On-time performance

Biman Bangladesh Airlines had earned a bad reputation for flight delays. But on-time flight performance of the national carrier is now, surprisingly, well above the global standard.

Since September 2019, Biman's on-time performance improvement has crossed 90% from the previous 50%, where the international average is 80%.

Among the Asia Pacific airlines, Hong Kong Airlines ranked top with 88.11% on-time performance, whereas, IndiGo Airlines was 10th with 81.70% in 2018, according to the global report titled "The Punctuality League-2019".

On-time performance is measured by looking at flights that arrive or depart within 15 minutes of their schedule.

To ensure On-time performance, the check-in counter is closed 30 minutes prior to the departure of domestic flights and one hour before international flights. Automatic boarding of passengers was initiated on 1 March 2020.

The story behind the success

Biman converted into a company from a corporation in 2008 aiming to improve its business, but it did not develop an organisational system, resulting in massive irregularities.

Previously, the government hired managing directors at high salaries. It even hired two foreigners for the post to improve the company. But it did not work due to management's involvement in irregularities.

For instance, former chief executive officer AM Mosaddique Ahmed, who would enjoy monthly compensation of around Tk8 lakh, was relieved on charges of alleged corruption.

Biman made a loss amounting to over Tk1,200 crore for irregularities in leasing two aircraft taken from Egypt Air during the tenure of Kevin John Steel, former foreign managing director of the company, who would enjoy monthly compensation of above Tk25 lakh.

After the removal of Mosaddique, Md Mokabbir Hossain, then additional secretary of the Civil Aviation and Tourism Ministry, was picked for the musical chair to reshape Biman by developing Biman's organisational system.

Following the government's instruction, Mokabbir, who takes around Tk1 lakh in salary as a managing director, has streamlined the company.

Indiscipline in its organisational operation was the main reason for corruption in Biman, said Mokabbir.

Now the organisational system has developed, which helped the company to minimise irregularities. Proper utilisation of its logistics and manpower has increased revenue generation, he added.

However, the result of transformation has not fully been reflected yet in its performance due to the pandemic, he said.

Output of the development in organisational system

Before the Covid-19 hit, Biman had been performing outstandingly with a remarkable improvement in on-time performance, customer services, baggage delivery, passenger and cargo revenue income, yield and revenue management etc.

Biman earned a profit before tax amounting to Tk483 crore during July 2019-January 2020 with an average increase in passenger yield by Tk3,100, which is 30% higher than that of the same period preceding year.

However, it could not reap the full benefit of organisational development because of Covid-19.

During the pandemic, Biman suffered a loss of Tk1,738 crore in passenger revenue between March 2020 and June 2020 and could not continue the pre-Covid-19 growth.

In order to counter the situation, Biman's management has taken various financial and operational measures and restructuring steps as mentioned above to reduce operational and other non-value added costs substantially.

Biman saw a loss of Tk564 crore in February-June 2020. At the end of the fiscal 2019-20, Biman suffered an after-tax loss amounting to Tk81 crore.