Biman Bangladesh Airlines plans to bring massive changes to its fleet planning by axing loss-making flight operations along both domestic and international routes.
The management of the national carrier recently decided to suspend flight operations in Yangon, Myanmar from October 28. Currently, Biman is losing Tk1 crore per flight operating along the Dhaka-Yangon route, as the flight runs with only 30 percent of its passenger capacity.
Biman runs two flights per week in Yangon, therefore, losing around Tk8 crore per month.
Additionally, Biman decided to stop operating the Boeing 777 aircraft, a long-range jet airliner, on the Dhaka-Chattogram route from the same date.
Operations of this international flight via Sylhet will likely be suspended as well next year, informed a Biman source. The airline is currently operating five long-distance flights to the Middle East and London from Dhaka while making stops at Chittagong and Sylhet.
Flight operations along the Dhaka-Chattogram route using the Boeing 777 aircraft is not business-friendly because just landing once costs Biman $25,000 – excluding fuel cost.
Moreover, engines lose one flight cycle per landing, which leads Biman to spend around Tk1 crore per day on around five flight cycles. In return, they earn only Tk30 lakh.
Flight cycle is the completion of one take-off and one landing by an aircraft. More flight cycles result in the engine wearing down quicker, thus pushing up maintenance costs.
Biman Bangladesh Airlines is wasting public money to serve less than one percent of the country's population.
Last year, eight million people travelled via air in Bangladesh, of which around 20 percent accounted for domestic flights.
The decision for this major change in flight operations came soon after Md Mokabbir Hossain joined the national carrier as CEO and managing director this month.
Confirming the decision to suspend the aforementioned flight operations, Hossain said Biman is incurring huge losses operating along these routes.
"Biman will start W-pattern flight operations by suspending use of long-haul capacity airplanes along the Dhaka-Chittagong and Dhaka-Sylhet routes," he said.
In this pattern, international flights will travel directly to and back from their destinations. For example, an airplane may travel from Dhaka to Dubai, then return to Chittagong, travel again to Abudhabi, and then finally return to Dhaka, Hossain explained.
Speaking to The Business Standard, a managing director of a private airline said: "It is a good move to stop using long-haul capacity planes for short-range flights. Not only will it reduce losses incurred by Biman, it will also reduce losses of private airlines."
He explained that in the aviation sector of Bangladesh, above 60 percent of flights are headed to the port city. Every day, Biman operates five flights along this route, using long-haul aircrafts, resulting in a surplus of flights to Chattogram.
"As a result, private airlines are incurring losses," he said.
Since Biman sells tickets at prices below its expenses, private airlines cannot compete with the national carrier as this business model is unsustainable for the private sector.
"Biman could have used small planes or sub-contract private airlines to carry passengers for international flights from Dhaka to Chittagong and Sylhet – as per the international practice," he suggested.
He opined that Biman considers private airlines as competition, which is "illogical," as the national carrier could take complimentary services from them.
"Biman should compete with large foreign airlines," he added.