Biman Bangladesh Cuts Flights Because Of Cash Woes

August 28, 2006

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State-owned Biman Bangladesh Airlines is planning to cut down on the frequency of flights to international destinations because it cannot pay for the repair of five of its fleet of 13 aircraft, officials said.

"Cutting frequencies is a way to avert problems regarding flight schedules caused by shortage of aircraft, and also to rein in mounting losses," said Khan Mosharraf Hossain, Deputy General Manager of Biman.

"Five out of Biman's 13 aircraft are now out of service due to mechanical faults and routine maintenance," he said. "So we are planning to cut flight frequencies on three international routes, two in Europe and one in Asia."

Earlier this month, Biman stopped flying to New York to rein in losses.

Besides lack of aircraft, Biman was losing money because of high operational costs, including soaring fuel prices, and poor management.

"We have projected a 6.91 billion taka (USD$99.13 million) loss for Biman during the 2006-07 fiscal year to next June" said Biman's Managing Director Abdul Momen.

The airline has been unable to pay for aviation fuel supplied by state-owned Bangladesh Petroleum Corporation (BPC), the country's only importer and distributor of oil products.

The BPC has threatened to stop supplies but continued at the request of civil aviation minister and key officials. Biman owes 12 billion taka (USD$172.16 million) to BPC, officials said.

Biman flies to 26 international destinations with a fleet of 13 aircraft, including five DC-10s, four Airbus A310s and four Fokker F-28s.

But two DC-10s, one Airbus and two F-28s were sent abroad for repair and Biman was unable to get them released due to a shortage of funds.

"We don't have enough cash flow at this moment to get the aircraft back," Hossain said.

(Reuters)