Biman Bangladesh Airlines, the national carrier of Bangladesh, has recently signed a deal with European plane manufacturer Airbus, raising questions about its ability to compete in the global aviation market. With a majority of its current fleet consisting of planes from US-based Boeing, the decision to diversify with Airbus aircraft has caught the attention of industry observers.
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While the move presents opportunities for Biman to expand its cargo services and address the shortage of aircraft, concerns have been raised about the potential impact on maintenance costs and overall fleet management.
The Boeing factor and Airbus’ entry
Boeing has long been a dominant player in Biman’s fleet, with 18 out of its 21 passenger planes originating from the American manufacturer. Therefore, Airbus securing a deal with Biman represents a significant milestone and a cause for concern for Boeing. Despite the presence of Boeing in Bangladesh, Biman’s board made a strategic decision to explore Airbus’ proposal for two wide-bodied A350 freighters. This multi-million-dollar deal holds immense significance for both aviation giants, considering the substantial investments involved.
New features of Airbus: Enhancing Biman’s competitive edge
The Airbus A350, which Biman has chosen to incorporate into its fleet, offers several new features that can potentially enhance the national carrier’s competitiveness in the global aviation market. The A350 is known for its advanced technology, fuel efficiency, and passenger comfort, making it an attractive choice for airlines worldwide. With its cutting-edge design and aerodynamic efficiency, the A350 reduces fuel consumption and carbon emissions, aligning with Biman’s commitment to sustainability and environmental responsibility. One notable feature of the A350 is its spacious cabin, providing a more comfortable experience for passengers during long-haul flights. The aircraft’s larger windows offer panoramic views and improved natural lighting, enhancing the overall travel experience. Additionally, the A350’s advanced air filtration system ensures superior air quality, an essential consideration amid the ongoing COVID-19 pandemic.
Furthermore, the A350’s range and cargo capacity make it an ideal choice for Biman to expand its cargo services. The freighter variant of the A350 allows for the transportation of larger volumes of goods, catering to the growing demand in the global air cargo market. By utilizing these new capabilities, Biman can establish itself as a formidable player in the freight industry, diversifying its revenue streams and boosting its competitiveness in global aviation.
Boeing’s response and Biman’s considerations
Following the announcement of the aviation cooperation deal with Airbus, David Schulte, Boeing’s managing director for Asia Pacific and India, expressed concerns about the potential drawbacks of operating a mixed fleet. Schulte highlighted the potential increase in maintenance costs and the complexities associated with managing planes from different manufacturers. However, Biman’s former managing director, Md Abdul Momen, argues that the national carrier must have conducted a comprehensive cost-benefit analysis before proceeding with the Airbus deal. He emphasizes that Biman’s decision is driven by commercial viability and the anticipated benefits of incorporating Airbus aircraft into its fleet.
Addressing cargo opportunities and aircraft utilization
One area where Biman sees significant potential is the air cargo market. Despite foreign carriers currently dominating the sector, Biman aims to seize a portion of the cargo business by leveraging wide-bodied aircraft. However, aviation insiders question whether Biman can effectively utilize the cargo space available in its passenger flights and whether it can fully capitalize on its passenger seat capacity. Concerns are raised regarding Biman’s marketing capabilities and its ability to compete with foreign carriers who are already thriving in the cargo market. Proper utilization of cargo and passenger capacities will be crucial for Biman’s success in the global aviation landscape.
Biman’s historical connections with Boeing and Airbus
Biman’s recent deal with Airbus marks the national carrier’s return to the European manufacturer after almost three decades since its last Airbus purchase in 1996. However, this does not signify the end of Biman’s business with Boeing. In 2019, Biman and Boeing signed a deal for two 787 Dreamliners, further cementing their long-standing relationship. The 2008 deal between Biman and Boeing, which involved the purchase of eight planes directly from the manufacturer, was seen as a significant boost for the national carrier. The acquisition of new aircraft from both Boeing and Airbus reflects Biman’s commitment to modernizing its fleet and expanding its reach.
Challenges beyond aircraft acquisition
While the addition of new aircraft from global manufacturers is a positive step, Biman must address various challenges beyond aircraft shortage to thrive in the global aviation landscape. Complaints from passengers about service quality, ranging from ticket booking to inflight hospitality and baggage handling, pose a significant concern. Moreover, allegations of corruption in accounts and recruitment among top management personnel have tarnished Biman’s reputation. These issues, if left unaddressed, can hinder the effectiveness of new aircraft in transforming Biman’s standing in the industry.
Restructuring and transformation
Biman underwent a massive restructuring process between 2007 and 2008 when it transitioned from a government entity to a public limited company. However, the envisioned offloading of shares in the stock market and the voluntary retirement plan for surplus employees did not materialize fully. The airline remains fully government-owned, hampering its ability to operate commercially and compete effectively. Prime Minister Sheikh Hasina’s vision to make Bangladesh an aviation hub necessitates Biman’s optimization of upgraded facilities and improved service quality at competitive costs.
To end, Biman’s new Airbus deal presents both opportunities and challenges for the national carrier. While the diversification of its fleet with Airbus planes opens doors for expansion into the cargo market and addresses the shortage of aircraft, concerns about maintenance costs and fleet management persist. Biman must also address issues related to service quality, corruption, and overall commercial viability to succeed in the fiercely competitive global aviation landscape. With the government’s support and the necessary reforms, Biman has the potential to transform into a thriving commercial entity capable of holding its own against foreign carriers and contributing to Bangladesh’s aspirations of becoming a regional aviation hub.
