Bangladesh Airlines to go public in 2016

DUBAI, United Arab Emirates – Biman Bangladesh Airlines, the country’s flag carrier, is set to become profitable by 2015, after breaking even in the current fiscal year ending June 2014, a top official said.

The airline is also planning an initial public offering (IPO) in three years, after becoming profitable, when it will becomes a professionally run organisation, Air Marshal (Rtd) Jamaluddin Ahmad, Chairman of Biman, said.

“There are proposals for offering shares and reserving quota for non-resident Bangladeshis (NRBs),” he said. “But these will be finalised before the airline goes public.”

The carrier, which operates daily flights to a number of Gulf destinations including Dubai, Abu Dhabi, Doha, Muscat, Jeddah, Dammam and Kuwait, is planning to strengthen operations in the Gulf Cooperation Council (GCC) with increased flights once the airline receives more aircraft, part of the firm order it placed with Boeing for 10 B777-300ER aircraft, two of which have joined the fleet while two more scheduled to join in the next six months when it will resume flights to Bahrain and New York.

The GCC is home to nearly 3 million NRBs, out of the 8.5 million–strong Bangladeshi diaspora spread across the world.

The airline has already improved its on-time performance from 40 to 65 percent, reducing chronic delays in flight operations due to shortage of aircraft and other operational deficiencies, still falling short of the global industry average of 75 percent.

“We have reduced our losses from $75 million in 2011-2012 to $25 million last year and are working to break-even this year,” Kevin John Steele, Biman’s Managing Director and CEO told Gulf News.

The airline carried 1.6 million passengers last year and is on course for a 30 percent growth this year. “In order to improve yields, we are also focusing on increased business class passengers,” he said. “However, we want to first get things right — improve the on-time performance, reduce bottlenecks and offer a much better experience on board.”

Biman has interline agreements with 27 airlines which Steele plans to double. “We are also looking to sign a number of code-share agreements with international airlines, including from the GCC. However, we need to improve service standards to a much better level,” he explained.

The airline has already launched online booking facilities while a frequent flyer programme will be launched in October and online checking facilities will be introduced in October.

Potential for growth

Steele, a former British Airways and Etihad Airways senior executive, was hired by the Bangladesh government in March this year to revive the fortune of the loss-making airline which has a huge potential for growth that has been losing passengers to other carriers due to operational mismanagement. Following his appointment, he has submitted to the government a two-year turnaround plan to make it profitable.

The airline serves 20 destinations with a fleet of eight aircraft and 3,400 employees. It plans to double the fleet and add at least five new destinations. It is currently improving the cabin products and planning to introduce a number of divisions to attract passengers.

“The plan has been accepted by the Board of Directors and the Cabinet and we are now on a growth path. We are in the process of leasing a number of mid-size jets and a few turbo-props to resume operations in the domestic market where we had ceased operations,” he said.

Bangladesh expatriates say, they will return to Biman if delays are minimised. “The airline needs to get its timing right and improve cabin products,” Mahtabur Rahman, President of Bangladesh Business Council in Dubai, said. “But first, it needs to change the attitude and behaviour of its employees from that of a government-run to a professionally-run organisation. We want to see that happening fast,” he said.