Fall in export-import growth hits Biman’s cargo business

The fall in export-import growth has hit Biman's cargo business, with revenue from goods transportation falling by 32 percent in the first four months of the current fiscal year. 

The slowdown in the global air freight market has also contributed to a sharp decline in Biman's revenue from the business. 

The global demand for air freight slowed down by 3.5 percent in October, according to the International Air Transport Association (IATA). 

Over the past few years, air cargo business has had setbacks as a consequence of the ongoing trade war between the US and China as well as a slowdown in global trade, the IATA said in a report released recently.

Bangladesh's national carrier earned Tk87 crore in the July-October period of FY20 in contrast to Tk128 crore in the same period a year earlier. 

The fall in revenue from cargo business has prompted Biman to go for an expansion of cargo loading and handling facilities at Dhaka and Chittagong airports, according to Biman officials. 

Many exporters prefer to carry goods through the Kolkata route, which results in a fall in revenue from cargo business, said Md Mokabbir Hossain, managing director of Biman.

Cargo charges in Kolkata are much lower than in Bangladesh, he pointed out.

Low prices of jet fuel coupled with low cost of airport services in Kolkata have facilitated airlines in having their cargo handled at cheaper rates than in Bangladesh, Mokabbir said.

Businessmen carry goods by road to Kolkata through the Benapole land port and then send those onward by air cargo from at low costs, he said. 

Biman has, therefore, been trying to devise ways of bringing its cargo business back, he said, adding that the national carrier may reduce cargo handling charges if circumstances warranted such a move.

Cargo handling charges are higher at Dhaka airport than at any other international airport, said Mohammad Hatem, first vice-president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA).

As a result, some non-garment industries use the Kolkata route to save money, he added. 

For instance, Biman charges exporters even for a scanning of their goods, but there is no such charge at any other international airport, he said.

Moreover, garment exporters do not use this route because of various hassles, he added.  

Although revenue from cargo business has fallen sharply, high revenue from passenger-carrying services has clearly yielded profits for Biman. 

Revenue from passenger-carrying services increased by 14 percent in the July-October period of the current fiscal year compared to that in the same period in the previous fiscal year, according to Biman.

Increased flight frequency has helped Biman earn more from passenger-carrying services, according to Biman officials. 

Despite spending Tk157 crore on a return of two leased EgyptAir aircraft, Biman's profit increased by 26 percent in July-October of the current fiscal year compared to that of the same period last year. 

In four months of the current fiscal year, Biman earned Tk334 crore in profits.