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THE STUDY OF
BIMAN BANGLADESH AIRLINESDEP: MANAGEMENT STUDIES, BATCH: 02, SESS: 2006-07, SEC: A
SL NO.
NAME ID Reg. No
Email Address Contact No Blood Group
1 Reaz Uddin 06671581 024127 [email protected] A+
Jagannath University
PRACTICE OF
MANAGEMENT INFORMATION SYSTEM
IN
BANGLADESH
LETTER OF TRANSMITTAL
April 19, 2011
ToMd.Shahidul Islam Fakir
Lecturer
Faculty of Business
Department of Management Studies
Jagannath University
Subject: Assignment on “Practice of Management Information System in Bangladesh”
Dear Sir,
We are very happy to submit our Assignment which has been assigned to us as a partial of BBA Program. This practical program was a wonderful opportunity for us to learn many new concepts and its implication in our practical and academic life. We have tried the best from our part to acquire the information we needed to submit the Assignment. Initially, we faced much trouble to manage the particulars; but your exquisite advocates, that we followed afterwards, worked brilliantly and earned me the crown. However, we will remain available for further clarification of any of this Assignment we beg your kind consideration in this regard.
We hope that our Assignment will satisfy you. Still, we are novice in this arena. If any
certification is needed, we will be available.
Sincerely yours
----------------------(Reaz Uddin)
On behalf of My groupBatch: 02Program: BBAJagannath University
ACKNOWLEDGEMENT
The achievement of preparing an assignment like this has been possible with a large number of
people's efforts and support behind it. Here we took the privilege to thank all to whom we are
grateful.
Probably, we are the luckiest persons who have got to Jagannath University beside us in
practical orientation. We would like to thank especially to Lecturer, Md.Shahidul Islam Fakir for
providing us necessary support, while preparing the assignment. Without his support it
wouldn't have possible for us to complete the assignment at due time. We like to thank all our
friends for extending their hands towards us.
This assignment is not free form limitations. Mistakes are likely to happen and for which we are
begging excuse.
TABLE OF CONTENT
1. INTRODUCTION
a) ABSTRACT
b) LITERATURE REVIEW
c) OBJECTIVE OF THIS STUDY
d) SCOPE OF THE STUDY
e) METHODOLOGY OF THE STUDY
2. Overview of Bangladesh Airlines
a) Expansion
b) Management
c) Privatisation
d) Services
e) Flight classes and amenities
f) Biman Cargo
g) Destinations
h) New York and Manchester
i) Hajj flights
j) Fleet
k) Modernisation
3. World-class Information Technology
4. Amadeus ties up with Biman Bangladesh Airlines for e-ticketing
5. Web Booking / ticketing through internet
6. E-Commerce Solutions
7. Credit Card Sale through POS
8. Cybercrime Solution Has Bugs
9 Diagnosis of Biman’s Problems
10.Recommendations
11. CONCLUSION
INTRODUCTION
ABSTRACT
The air transport industry is one of the most significant and important industry in modern era .
It’s took a grate rule in economically, socially and politically. It has intensive competition within
the market which causes many threats and difficulties to survive. it is a capital-intensive
industry so entry and exit into the market is really hard. It is very important for an industry to
apply an appropriate and more suitable strategy to attract more and more customers to get long
time growth and sustainability in the competitive market.
This reports will analyses different factors and comparison about one of the most prominent
airlines in the world “British Airways” and another had been regarded to have the worst
punctuality records now and onwards is “Biman Bangladesh airlines” in order to determine
their future capacity in Economical world.
Biman Bangladesh Airlines transports travelers in its home country and elsewhere. The
company, also known as Biman Air, is the national airline of Bangladesh. With a fleet of 12
planes, it serves three domestic airports and nearly 20 international destinations from its hub in
the capital city of Dhaka. Countries served include China, India, Pakistan, Saudi Arabia, and
Thailand. Biman Air also flies to London and Rome. The airline also provides cargo services,
and its catering service provides in-flight meals for other airlines operating out of Dhaka,
including Russian carrier Aeroflot. Biman Air runs its own poultry farm to support its catering
operations. The carrier was established in 1972.
Background: British airways is a flag carrier and UK’s largest international scheduled airlines.
It was formed on 1st September in 1974 through nationalism by the labor government. In
February 1987 the company was privatized under the slogan of ‘The world’s favorite
airlines’ .the British airways group consists of British airways plc which operating in 550
destination at convenient times in nationally and internationally as a result it is considered to be a
leader in airlines industry. However Biman Bangladesh airlines are the flag carrier airlines in
Bangladesh was formed on 4th of January in 1972 and there weren’t any others private company
as a result Biman enjoyed countries internal monopoly until 1996.
The airlines was fully owned and managed by the government of Bangladesh under the ministry
of civil aviation and tourism of Bangladesh until 23rd of July 2007.it has air service agreement
with 42 countries but operate to 16 countries only. The company was transformed into countries
largest public limited company on 23rd July 2007 by the caretaker government.Biman
Bangladesh Airlines Ltd. was in a serious financial crisis facing financial loss every year and
fleet crisis and this entire situation lead to the rebranding campaign of Biman Bangladesh
Airlines Ltd.
For Biman to be profitable airline there has to be a strategy suitable for Biman to compete with
other airlines and a overhauling of the top management. The management must have the freedom
to plan and execute and if it has to remain in the public sector, the board members should be
carefully chosen so that they are committed and spare enough time to give policy guidelines,
oversee the affairs and hold the management accountable. The rationalizing of the fleet,
manpower strength and distribution and a corporate vision must be drawn up so that goals of
departments can be drawn up. Any attempt to privatize Biman will face opposition but there is
no second option.
To create an efficient and dynamic airline, Biman has to reinvent itself, shed off the extra fat,
take advantage of information technology (IT) to create a modern workplace conducive to
efficient management and availability of real-time information. A system of accountability and
flow of information throughout the organisation is crucial for its well-being and Biman is lacking
in this regard.
LITERATURE REVIEW
The Concept of management information systems originated in the 1960s and become the
byword of almost all attempts to relate computer technology and systems to data processing in
business . During the early 1960s , it became evident that the computer was being applied to the
solution of business problem in a piecemeal fashion, focusing almost entirely on the
computerization of clerical and record – keeping tasks. The concepts of management information
systems was developed to counteract such in efficient development and in effective use of the
computer
Management information systems are used by organizations to track, store, manipulate and
distribute information to the appropriate people when necessary. Using a management
information system can enable a business to streamline its operations into a cohesive functioning
unit.
The concept of management information systems began in the 1960s as computer use became
more prevalent and business managers discovered the ability to computerize records and increase
efficiency of business processes.
Management information systems support business decision-making by providing management
with critical data. They serve to enhance the organization's communication, reduce human labor,
support short- and long-term business goals and distribute complex information
The critical components of a management information system are computer hardware,
information to track and the manual processes involved with entering or manipulating the data.
Information systems are a foundation for conducting business today. In many industries,
survival and the ability to achieve strategic business goals are difficult without extensive use of
information technology. Business today use information system to achieve six major objectives:
operational excellence, new product, services, and business models; customer/supplier
intimacy; improved decision making; competitive advantage; and day to day survival.
From a technological perspective as information system collect, store and disseminates
information from an organization’s environment and internal operations to support
organizational functions and decision making, communication, coordination, control, analysis
and visualization. Information system transfer new data into useful information through three
basic activities: input, processing, and output.
From a business perspective, an information system provide solution to a problem or challenge
facing a firm and represent a combination of management, organization, and technology
elements.
The management dimension of information systems involves issues such as leadership,
strategy, and management behavior. The technology dimension consists of computer
hardware, software, data management technology, and networking/telecommunication
technology (including the internet).
The organization dimension of information systems involves issues such as organization’s
hierarchy, functional specialties, business processes, culture and political interest groups.
Managers and business firms invest in information technology and systems because they
provide real economic value to the business. An information system represents an
organizational and management solution, based on information technology, to a challenge or
problem posed by the environment. From a business perspective, information systems are part
of a series of value-adding activities for acquiring, transforming, and distributing information
that managers can use to improve decision making, enhance organizational performance, and
ultimately, increase firm profitability.
Although information systems have been sources of efficiency and wealth, they have some
negative impacts. Computer errors can cause serious harm to individuals and organizations.
Poor data quality is responsible for disruption and losses for businesses. Jobs can be lost when
company replaces workers or tasks become unnecessary in reengineered business processes.
The ability to own and use computer may be exacerbating socioeconomic disparities among
different racial groups and social classes. Widespread use of computers increases opportunities
for computer crime and computer abuse. Computer can also create health problems, such as
RSI, computer vision syndrome, and techno stress.
Modern businesses have been leveraging management information systems (MIS) to manage,
order, organize and manipulate the gigabytes and masses of information generated for various
purposes. MIS helps businesses optimize business processes, address information needs of
employees and various stakeholders and take informed strategic decisions. However, budget
allocation and monitoring issues can affect the efficacy of MIS. It has its advantages and
disadvantages depending on organizational deployment and usage.
Management information systems are used by organizations to track, store, manipulate and
distribute information to the appropriate people when necessary. Using a management
information system can enable a business to streamline its operations into a cohesive functioning
unit.
Management information systems are widely used to assist business management with making decisions that impact all aspects of operations.
Types of Management Information SystemsAn MIS provides the information necessary to manage an organization effectively.
A management information system (MIS) is a computer-based system that provides the information necessary to manage an organization effectively. An MIS should be designed to enhance communication among employees, provide an objective system for recording information and support the organization's strategic goals and direction.
Transaction-Processing Systems
Transaction-processing systems are designed to handle a large volume of routine, recurring transactions. They were first introduced in the 1960s with the advent of mainframe computers. Transaction-processing systems are used widely today. Banks use them to record deposits and payments into accounts. Supermarkets use them to record sales and track inventory. Managers often use these systems to deal with such tasks as payroll, customer billing and payments to suppliers.
Operations Information Systems
Operations information systems were introduced after transaction-processing systems. An operations information system gathers comprehensive data, organizes it and summarizes it in a
form that is useful for managers. These types of systems access data from a transaction-processing system and organize it into a usable form. Managers use operations information systems to obtain sales, inventory, accounting and other performance-related information.
Decision Support Systems (DSS)
A DSS is an interactive computer system that can be used by managers without help from computer specialists. A DSS provides managers with the necessary information to make informed decisions. A DSS has three fundamental components:database management system (DBMS), which stores large amounts of data relevant to problems the DSS has been designed to tackle; model-based management system (MBMS), which transforms data from the DBMS into information that is useful in decision-making; and dialog generation and management system (DGMS), which provides a user-friendly interface between the system and the managers who do not have extensive computer training.
Expert Systems and Artificial Intelligence
Expert systems and artificial intelligence use human knowledge captured in a computer to solve problems that ordinarily need human expertise. Mimicking human expertise and intelligence requires the computer to do the following: recognize, formulate and solve a problem; explain solutions; and learn from experience. These systems explain the logic of their advice to the user; hence, in addition to solving problems they also can serve as a teacher. They use flexible thinking processes and can accommodate new knowledge.
Considerations
A potential problem with relying on electronic communication and processing of information is the loss of the vital human element. Sometimes, because of the complexity of information, an MIS report cannot effectively summarize it. Very rich information is needed to coordinate and run an enterprise, and certain classes of information cannot be quantified. For example, it might be wrong to evaluate an employee's performance solely based on numbers generated by an MIS. Numbers can indicate a performance problem, but a face-to-face meeting is necessary to discuss the nature of the problem.
Advantages of Management Information Systems Better Planning and Control
Management information systems have changed the dynamics of running businesses efficiently. Decentralization is one of the biggest advantages; it allows monitoring of operations at low levels and frees up resources for departmental managers to devote time to strategic activities. Coordination of specialized projects and activities is much better and decision makers in the organization are aware of issues and problems in all departments. Another advantage of MIS is that it minimizes information overload, which can be quite common with conventional businesses in the modern era.
Aid Decision Making
MIS has to be designed and managed in such way that it aggregates information, monitors the company's activities and operations and enhances communication and collaboration among employees. This ensures better planning for all activities and better ways to measure performance, manage resources and facilitate compliance with industry and government regulations. Control helps in forecasting, preparing accurate budgets and providing the tools and vital information to employees, top management and business partners.
It facilitates planning:
MIS improves the quality of plants by providing relevant information for sound decision –
making . Due to increase in the size and complexity of organizations, managers have lost
personal contact with the scene of operations.
In Minimizes information overload:
MIS change the larger amount of data in to summarize form and there by avoids the
confusion which may arise when managers are flooded with detailed facts.
MIS Encourages Decentralization:
Decentralization of authority is possibly when there is a system for monitoring operations at
lower levels. MIS is successfully used for measuring performance and making necessary
change in the organizational plans and procedures.
It brings Co ordination:
MIS facilities integration of specialized activities by keeping each department aware of the
problem and requirements of other departments. It connects all decision centers in the
organization.
It makes control easier:
MIS serves as a link between managerial planning and control. It improves the ability of
management to evaluate and improve performance. The used computers has increased the
data processing and storage capabilities and reduced the cost.
MIS assembles, process , stores , Retrieves , evaluates and Disseminates the information .
Disadvantage of Management Information Systems
Unemployment
While information technology may have streamlined the business process it has also crated job redundancies, downsizing and outsourcing. This means that a lot of lower and middle level jobs have been done away with causing more people to become unemployed.
Privacy Though information technology may have made communication quicker, easier and more convenient, it has also bought along privacy issues. From cell phone signal interceptions to email hacking, people are now worried about their once private information becoming public knowledge.
Lack of job security Industry experts believe that the internet has made job security a big issue as since technology keeps on changing with each day. This means that one has to be in a constant learning mode, if he or she wishes for their job to be secure.
Dominant culture While information technology may have made the world a global village, it has also contributed to one culture dominating another weaker one. For example it is now argued that US influences how most young teenagers all over the world now act, dress and behave. Languages too have become overshadowed, with English becoming the primary mode of communication for business and everything else.
Constant Monitoring Issues Depending on organization deployment, usage and extraneous factors, some disadvantages related to Management Information Systems can come to the fore. Allocation of budgets for MIS upgrades, modifications and other revisions can be quite tricky at times. If budgets are not allocated uniformly or as per immediate requirements, key functionalities might get effected and benefits might not be realized consistently. Integration issues with legacy systems can affect the quality of output and vital business intelligence reports.
Benefits of a Management Information System
Management information systems were developed in the 1960s. Management information system describes a company and its resources. MIS allows managers to create reports about the company activities. Company activities can be products produced or sold, services, inventory, business partners and people. MIS keeps company information and resources organized.
Financial MIS
Financial MIS creates reports about a company past and present money activities. The Financial MIS can show a companies profit and losses, financial records about a company that states how the company is doing, decisions on spending and how a company can control cost.
Manufacturing MIS
Manufacturing MIS monitors and control the flow of materials, products and services of a company. Raw goods that are processed are monitored by Manufacturing MIS. This helps Manufacturing MIS control and reduce costs of products and services.
Marketing MIS
Marketing MIS handles product creations, sales, prices, advertisements and future business decisions. Marketing MIS makes decisions on product and service appearance. Marketing MIS manages customer contacts, makes questionnaires for customer feedback about their company product or service and tracks customer spending habits.
Human Resource MIS
Human Resource MIS manages employees and selection of employees. Human resource MIS looks at needs of the employees, the workforce rules, the hiring process, training, and job assignments. The company's Human resource MIS is in charge of payroll and medical care for its employees.
Uses of Management Information System in Finance
Financial Management Information Systems
Management Information Systems (MIS) in Finance have been widely adopted both by corporations as well as governments. They are information systems with capacity to maintain large data bases enabling organizations to store organize and access financial information easily. These systems are primarily used for accounting operations and generation of financial reports.. Increasingly they are also used to support budgetary, planning and decision making processes. These systems are credited with increasing financial transparency, efficiency and accountability. .
General Ledger
The main use of a management information System (MIS) in finance is that it automatically updates all the transactions in the General Ledger. The General Ledger is the core component of all financial information systems. Financial transactions are simultaneously posted on the various accounts that comprise the organization's "Chart of Accounts". Simultaneous updating of accounts such as sales, inventory and accounts receivable reduces errors. It also provides an accurate and permanent record of all historical transactions.
Cash Management
Cash flow management is an important use of MIS in Finance. Cash Management refers to the control, monitoring and forecasting of cash for financing needs. Use of MIS in Finance helps companies track the flow of cash through accounts receivable and accounts payable accurately. Accurate records also help in monitoring cost of goods sold. This can help pin point areas that eat up cash flow such as inventory costs, high raw material costs or unreliable sales.
Budget Planning
Financial budget planning uses preformed or projected financial statements that serve as as formal documents of management's expectations regarding sales, expenses and other financial transactions. Thus financial budgets are tools used both for planning as well as control. MIS in finance helps organizations evaluate "what if" scenarios. By modifying the financial ratios, management can foresee the effects of various scenarios on the financial statements. MIS thus serves as a decision making tool, helping in choosing appropriate financial goals.
Financial Reporting
The use of MIS systems in Finance enables companies to generate multiple financial reports accurately and consistently. Generation of financial statements both for internal reports as well as for shareholder information takes less effort because of the automatic updating of the General Ledger. Compliance with Government regulations as well as auditing requirements is also easier because the records are accurate and provide a permanent historical map of transactions that can be verified.
Financial Modeling
A financial model is a system that incorporates mathematics, logic and data in the form of a large database. The model is used to manipulate the financial variables that affect earnings thus enabling planners to view the implications of their planning decisions. MIS in Finance enables organizations to store a large amount of data. This helps managers develop accurate models of the external environment and thus incorporate realistic "what if" scenarios into their long-range planning goals.
OBJECTIVE OF THIS STUDY
To know about the understanding of MIS as a field of study and as a field of
business.
To know about the scenario of MIS practices in Bangladesh.
To identify the function of MIS of Biman Bangladesh.
To know about the MIS practices from global perspective.
To investigate the problems/challenges of MIS in Bangladesh.
To provide recommendation to solve the problem for excellence performance of
MIS.
Scope of the Studywe have prepared this report basically on history of Biman Bangladesh Airlines, management style, services, destination of Biman Bangladesh Airlines, Information Technology, e ticketing, Web Booking, E-Commerce Solutions, Credit Card Sale through POS, Cybercrime Solution,
Biman’s Problems, Recommendations of Biman Bangladesh Airlines.
Methodology of the StudyIn order to prepare this report titled “Biman Bangladesh Airlines”. I have collected the required
data from secondary sources. I have collected required information of in order to focus the
conditions of “Biman Bangladesh Airlines”.
Secondary sources of data:
Websites of Biman Bangladesh Airlines
Published statement in news paper, like dailystar, financial express, BBC news.
Annual Report of the “Biman Bangladesh Airlines”
Overview of Bangladesh AirlinesBangladesh Airlines is the flag carrier airline of Bangladesh. Its main hub is at Shahjalal
International Airport in Dhaka, and also operates flights from Shah Amanat International Airport
in Chittagong, earning revenue from the connecting service to Osmani International Airport in
Sylhet. Biman provides international passenger and cargo service to Asia and Europe, as well as
major domestic routes. It has air service agreements with 42 countries, but only flies to 16. The
airline was wholly owned and managed by the Government of Bangladesh until 23 July 2007,
when it was transformed into the country's largest public limited company by the Caretaker
Government of Bangladesh. The airline's headquarters, Balaka Bhaban, is located in Kurmitola,
Dhaka.
Created in February 1972, Biman enjoyed an internal monopoly in the Bangladesh aviation
industry until 1996.[4] In the decades following its founding, the airline expanded its fleet and
destinations, but it was adversely affected by corruption and mishaps. At its peak, Biman
operated flights to 29 international destinations as far away as New York City to the west and
Tokyo to the east. The airline has suffered heavy financial losses, and has a reputation for poor
service because of regular flight cancellations and delays caused by its ageing fleet. For safety
reasons, some of Biman's long-haul aircraft have been banned in the United States and the
European Union. Annual Hajj flights, transporting non-resident Bangladeshi workers and
migrants, and the activities of its subsidiaries, form an important part of the carrier's business.
Rising oil prices have created additional pressure on the airline's finances, which is widely
reported to have failed to meet its payment obligations to the state-owned petroleum corporation,
BPC. Under Skytrax's five-star rating systems, Biman merits two stars. The carrier is currently
facing competition from a number of local private airlines as well as some international carriers,
which offer greater reliability and service standards, targeting the country's air transport sector
which is experiencing an 8% annual growth rate, owing to a large number of non-resident
Bangladeshis.
Since becoming a public limited company, the airline has reduced staff and begun to modernise
its fleet. Biman has made a deal with Boeing for 10 new aircraft, along with options for 10 more.
The carrier is in the process of leasing some aircraft in the interim to restart flights to some of its
previous destinations in Asia, Europe, and North America.The old building of Osmani
International Airport.Osmani International Airport was built during British rule of the Indian
Subcontinent, partly to check Japanese aggression from Burma.
The airport was formerly known as Sylhet Civil Airport but was re-named after General M A G
Osmani, a Bangladeshi Independence War hero. General Osmani was born in Sylhet in 1918 and
served as the Supreme Commander of the Mukti Bahini (Freedom Force) and Bangladesh Armed
Forces during the Bangladesh Liberation War.
The company Biman Bangladesh Airlines was founded in the year 1972. For fourteen years, the
airline enjoyed the monopoly of air transport in the country. Presently, there are subsidiaries too
which are Biman Flight Catering Centre, Biman Poultry Complex, and Biman Airlines Training
Centre. The present fleet size of 14 aircrafts caters to the 23 destinations that are connected by
Biman Bangladesh Airlines. Abu Dhabi, Bahrain, Bangkok, Brussels, Calcutta, Delhi, Doha,
Dubai, Frankfurt and Hong Kong are some of the destinations that are covered by Biman
Bangladesh Airlines. The fleet of the airlines is inclusive of the following aircrafts:
• Airbus A310-300
• Fokker F28 Mk4000
• McDonnell Douglas DC-10-30
• British Aerospace ATP
Various facilities are provided to the flyers of Biman Bangladesh Airlines. Great quality of food, superb hospitality, in-flight shopping and entertainment, etc are also made available to them.
Expansion
The airport was initially served by domestic flights from Shahjalal International Airport by the
country's national airline Biman Bangladesh Airlines. After many years of lobbying by
expatriates living in the UK, limited expansion of the airport was carried out to enable medium-
sized aircraft, such as the Airbus A310 used by Biman, to operate. The work was completed in
October 2002 and the airport was designated an international airport by the government.
However, the airport was not up to international standards to be capable of fully accommodating
international flights due to many shortcomings with the instrument landing system and runway
lighting system and was seen as a move to stave off pressure by the government.
Two boarding bridge just installed on new apron.
Nevertheless, on 3 November 2002, the airport received its first international arrival. Biman
flight BG020 from Kuwait via Abu Dhabi landed at 10:05 with 215 passengers en-route to
Dhaka. The disembarking passengers on the inaugraul flight were greeted by then Finance &
Planning Minister, M Saifur Rahman and State Minister for Civil Aviation and Tourism, Mir
Mohammad Nasiruddin. For a brief period, Biman also operated a direct service from London
but was later re-routed via Dhaka.
Management
The airline was wholly owned by the Bangladesh government through the Bangladesh Biman
Corporation since its inception. In 1977, Biman was converted into a public sector corporation
which afforded Biman limited autonomy, led by a government-appointed board of directors.The
authorised share capital was increased to BDT 2 billion in 1987,and Biman was transformed into
a public limited company, the largest in Bangladesh, in 2007.
During the late 1980s, Hossain Mohammad Ershad, President of Bangladesh at the time, served
as president of Biman. After an early period of expansion and growth, Biman entered an era of
nose-diving profits and slow growth, exacerbated by incompetent and corrupt management, who
padded purchases, falsified repair bills, and kept unprofitable routes in operation for political
reasons.Research conducted in 1996 found that Biman had 5,253 non-flying personnel, 30
percent more than Singapore Airlines, a carrier who operated a fleet almost ten times the size of
Biman's. The report described Biman as "poorly managed, overstaffed, undercapitalized, and
subject to excessive political interference in its day-to-day management.
Biman's Boeing 777-200ER being loaded for its maiden commercial flight at Shahjalal
International Airport, Bangladesh. (2010)
In the 1992–93 fiscal year, accounts under the Ministry of Civil Aviation and Tourism revealed
that BDT 22 million in tax was not paid to the government. The audit carried out in 1999, also
showed that Biman was owed BDT 2.2 million by travel agents from the proceeds of ticket sales,
most likely with the collusion of Biman officials.Additionally, BDT 2.4 million was overpaid as
incentive commissions to the sales agents in violation of Biman policies. In 2007, the caretaker
government launched an anti-corruption drive which saw the arrest of Shamim Iskander, the
brother of ex-prime minister Begum Khaleda Zia and a former Biman flight engineer, on
multiple corruption charges.This was shortly followed by the forced retirement of 35 other
employees and officials, some of whom were close aides of Iskander.
Privatization
Faced with growing losses from the late 1990s onwards, the government offered 40 percent of
Biman to foreign airlines in 2004, hoping a buyer would take over the management of the carrier.
However, the proposal demanded that many decision-making rights remain within the
Bangladesh government, and the offer was ignored by outside airlines. A similar initiative in
1998 cost Biman $1.6 million in consultancy fees with no positive results.
A rebranding of Biman in 2010, scrapped after 2 months
In May 2007, the caretaker government approved plans to turn Biman into a public limited
company with shareholdings split between seven public sector organisations.As a part of the
restructuring, the government put in place a voluntary retirement scheme (VRS) to reduce the
man-equipment ratio (MER) of 367:1 (ratio of manpower to aircraft). The industry average at the
time was 200:1, and other Asian airlines operated with MERs of about 150:1.The VRS provided
compensation based on length of service, at a cost to the government of over $40 million
borrowed from the World Bank. Biman management expected to reduce its workforce by 1,600,
but 2,162 applications were received, many from employees who expected to be dismissed with
little or no severance pay if the quota was not met. Biman accepted 1,877 applications and
affirmed that key personnel would not be allowed to leave the organisation via VRS.
On 23 July 2007, Biman Bangladesh Airlines became the largest public limited company in
Bangladesh.Earlier suggestions that the airline should be renamed Bangladesh Airlines were
rejected. The government is the sole shareholder of the 1.5 billion shares, but intends to offer 49
percent to the private sector while retaining majority ownership.The previous managing director,
Dr. Abdul Momen, was appointed as the chief executive officer (CEO) and managing director of
the new organisation. The six directors were appointed from the ministries of energy, commerce,
finance, civil aviation, foreign affairs, and the cabinet division, with the cabinet secretary taking
on the role as chairman of the board of directors. The six secretaries and a joint secretary to the
civil aviation ministry have been made the seven shareholders of the new PLC. In September
2008, the government appointed Air Commodore Zahed Kuddus (retd) to replace Dr. Momen as
CEO. From 2002–05 Kuddus had been chair of the Civil Aviation Authority of Bangladesh
(CAAB), before which he had held various posts in the Bangladesh Air Force.Following the
privatisation, an initiative was launched by ex-Biman employees, who left the organisation via
the VRS, to set up a competing airline. Names proposed for the airline included Air Bangla
International, Biman Employees Airlines and Balaka.They were joined by previous managing
directors of Biman, along with the former president of the Bangladesh Airline Pilots'
Association. However, nothing further was heard of regarding the proposed venture.
Services
The interior of a Biman McDonnell Douglas DC-10
Biman is notable for disruptions to its flight schedule and poor customer service. In 2007, Biman
faced strong criticism from major international airports including London Heathrow Airport and
Dubai International Airport for its failure to maintain flight schedules. Heathrow Airport
operator BAA wrote to Biman providing evidence which showed Biman had not achieved the
minimum 80% usage of its allocated landing slots at Heathrow, as required by EU and
International Air Transport Association (IATA) regulations, during the summer of 2007. Biman
should, therefore, not expect slot allocations at Heathrow for the summer of 2008 and should
look to Stansted or Gatwick airports if it wished to continue serving London.Following
discussions with BAA, however, Biman obtained landing slots for the summer of 2008 on
condition that it achieved 80% usage. Delays continued unabated and in September 2008,
Biman's Dhaka–London direct flight utilising a DC-10 aircraft was diverted and landed at
Gatwick when it did not have sufficient fuel to remain in a holding pattern over Heathrow
following arrival over three hours after the scheduled time.In a 10 September 2008 article
published in The Times, Biman was labelled the worst performer for punctuality at Heathrow,
with flights delayed on average by three hours.
In 2008, the United Nations advised its staff not to fly with Biman, citing both safety and
security concerns and Biman's unreliable flight schedules. It was made clear that UN staff who
flew with Biman did so at their own risk, and would be ineligible to make claims on insurance.
Biman's then newly-appointed managing director said he was unaware of the UN directive, but
admitted that Biman did face problems in managing its flight schedules. He expected the
situation to improve with the procurement of aircraft in the coming months.
Flight classes and amenities
The interior of the economy class cabin of Biman's first Boeing 777-200ER
A two-class service (J and Y) is operated on Biman's wide-body airliners and a single class
service is available on the smaller aircraft.The Maslin Executive Class cabin on its Airbus A310s
is set up in a 2–3–2 configuration while the setup on the Douglas DC-10-30s is a more spacious
2–2–2 configuration. The economy class cabins are set up in a typical 2–5–2 configuration.
English and Bengali language newspapers are available on board the aircraft along with Biman's
in-flight magazine, Digonto (Horizon), which is published quarterly. It contains mainly English
content and has an emphasis on tourist destinations in Bangladesh and elsewhere reachable by
Biman.
In-flight entertainment aboard Biman aircraft is rated "very poor" by Skytrax.Biman's service as
a whole is reflected in its two-star ranking (out of five), which is indicative of the poor standard
of service provided by the airline that falls below the industry average.The Douglas DC-10-30s
are equipped with a projector in each cabin, while the Airbus A310s have monitors that drop
down from the ceiling below the luggage racks in the center of the aircraft. While other airlines
using modern aircraft are able to provide more personal in-flight experiences via seatback LCD
screens, Biman's ageing fleet has maintained the standard equipment available when the planes
were manufactured.
Biman operates a frequent flyer programme which awards customers a free round trip flight on
production of ticket stubs for ten round trip journeys on Biman. The free ticket is for the
passenger's most often travelled route. Journeys on local routes are excluded from the offer.
The interior of the business class cabin in Biman's first Boeing 777-200ER
An agreement was signed with Amadeus in 2007 to upgrade Biman's ticketing system with an e-
ticketing solution to comply with IATA rules, which set out a deadline of 31 December 2007 for
all member airlines to switch over their ticketing systems. E-ticketing has enabled major airlines
to provide online check-in facilities, reducing the need to queue up at check-in counters.
However, Biman has not made any attempts to improve customer service through the adoption of
e-ticketing, although it has been able to reduce its own costs. In 2005, Biman had briefly stopped
using the Amadeus ticketing system when the government suspended the operation of a local
Amadeus subsidiary following a court order, after allegations of money laundering. The
suspension, however, lasted only a month, and was lifted after the writ was appealed in the High
Court.
Biman Cargo
Biman also operates a cargo service using the cargo holds of its passenger aircraft to ship freight
to international destinations. It has established Cargo Village at Shahjalal International Airport
where the cargo is packaged and labelled before being loaded onto its aircraft.
While the air cargo industry in Bangladesh grew by 16.5% in the fiscal year 2003–04, Biman's
cargo operations remained stagnant when private operators such as Bismillah Airlines, Best
Aviation and Air Bangladesh produced a 108% growth from the previous year. The private
operators increased their share of the cargo market by 10.6% and were responsible for handling
24% of the total 99,000 tonnes of cargo at the expense of both Biman and foreign airlines which
saw a reduction in their shares by 4.6% and 6.0% respectively. Foreign airlines handled 47% of
the total cargo with Biman taking on the remaining 29%.
As with its passenger service and management, corruption has also been rife at Biman Cargo. An
investigation in 2004 uncovered irregularities in a number of Biman's Middle East operations
which deprived the government of millions of dollars in revenue. Biman officials in Dubai were
found to have been "extending special privileges" to the main freight handler in exchange for
bribes.The smuggling of foreign currency and gold bars is reported to have taken place at the
Biman Cargo Village by Biman and CAAB employees. A number of arrests were made but the
perpetrators evaded punishment through lack of evidence and pressure from the CAAB union.
Destinations
Biman has air service agreements with 43 countries, but only operates its routes to 16, leaving
room for expansion for which it lacks aircraft. The airline operates flights to several destinations
in the Middle East, some destinations in South and South East Asia and two destinations in
Europe (Rome and London). Foreign airlines are encroaching on Biman's routes, particularly the
lucrative London–Dhaka route, on which traditionally only Biman and British Airways (before it
cancelled this route in 2009) have operated direct flights.In 2005, Air India commenced a route
which permitted flights between London and Dhaka without requiring a transit flight which has
occupied the space freed up by Biman when it reduced London–Dhaka flights.New airlines are
also hoping to cash in on Biman's shortfall: United Airways and Royal Bengal Airlines are two
such airlines launched by expatriate British–Bangladeshis with an aim to provide direct flights
between London and Dhaka.
New York and Manchester
From 1993 to 2006, Biman operated flights to John F. Kennedy International Airport, New York,
from Dhaka via Brussels.New York was Biman's farthest and most prestigious destination, and
was kept operational despite heavy financial losses on each flight to maintain a landing slot in
the US which, if cancelled, could be difficult to regain.
A Biman Boeing 707 at London Stansted Airport, England. (1979)
To curb the losses, Biman reduced the service to one flight per week and re-routed it through
Manchester Airport, UK, capitalising on travel demands from the expatriate Bangladeshi
community in the north of England. On 8 April 2006, Biman's inaugural flight to Manchester
landed at Manchester Airport en route to JFK.However, the Federal Aviation Administration
(FAA) had placed the CAAB into Category 2 (does not meet International Civil Aviation
Organization standards) according to its International Aviation Safety Assessment
Program,]which placed additional restrictions on the country's airlines when flying to the US. A
former CAAB assistant director made scathing remarks about the CAAB in an opinion article in
the Aviatour, a monthly travel and tourism supplement of Bangladeshi news magazine Weekly
Holiday.For Biman, this meant that it could continue flying to the US, but could not expand or
make alterations to its routes, such as changing the transit from Brussels to Manchester. The
FAA fined Biman for breaching its rules, and flights to New York were again re-routed through
Brussels.
A Biman McDonnell Douglas DC-10 landing at London Heathrow Airport, England. (2003)
The FAA had already warned Biman to replace its ageing DC-10s by December 2005.
According to experts, these aircraft were inadequately equipped to safely cross the Atlantic.On
13 May 2006, the FAA refused permission for Biman flight BG011 (Dhaka–Dubai–Brussels–
JFK) to enter its airspace, citing safety concerns over the ailing DC–10 aircraft used on the route.
The flight was diverted to Montréal-Pierre Elliott Trudeau International Airport in Canada,
where the passengers were provided with alternative airline options to complete their
journeyCanadian authorities inspected the aircraft and gave it a clean bill of health after which
the aircraft returned to Dhaka without any passengers. The FAA eventually admitted it was
mistaken and apologised for the error.
The incident put an end to the route, which had been losing $80,000 per flight, owing to its use
of obsolete DC–10s. Biman decided to axe the route along with a number of other regional and
domestic routes to curb the huge losses being incurred by the airline each month. However, in
October 2007, Biman was directed by the then caretaker government to resume flights to New
York. Biman was given until 25 October 2008 (extended from an earlier deadline of 23 March
2008) to resume flights to the airport by the JFK airport authority, after which it would have lost
the landing slot permanently. Biman is planning to resume Dhaka–Manchester–New York flights
in the first quarter of 2010 using a leased Boeing 777–200ER. The relevant clearances have been
obtained from the UK government following a review of the ASA between Bangladesh and the
UK.
Hajj Flights
The annual Islamic pilgrimage to Makkah Al Mukarramah for the Hajj is undertaken by
thousands of Bangladesh's predominantly Muslim population. Biman has been the sole
Bangladeshi airline permitted by the government to provide flights for pilgrims to King
Abdulaziz International Airport, Jeddah. Every year, the commencement of these flights is
inaugurated by high ranking government officials, including, at times, the Prime Minister.
In 2002, the government opened the service to private operator Air Bangladesh. The initial
private flights were plagued with delays, with both outgoing and return flights postponed for as
long as nine days, which caused the Bangladesh government to return the Hajj flights' monopoly
to Biman.
Biman's handling of Hajj flights has also been beset with troubles. In 2005, the State Minister for
Civil Aviation and Tourism resigned after complaints that he set fares too high. In 2006, Biman
took the unprecedented step of removing the business–class seats from its dedicated Hajj flights
to accommodate more economy-class passengers. Procedural irregularities by the Hajj agencies
delayed the confirmation of pilgrims' visas, and Biman had to cancel 19 flights owing to lack of
sufficient passengers. Once the situation was resolved, Biman was then unable to offer the
required number of flights to cope with the backlog of passengers.
In June 2007, the caretaker government approved a three-year Hajj policy aiming to alleviate the
problems encountered during the previous two years. Hajj flights would also begin leaving from
Bangladesh's two other international airports, Shah Amanat International Airport and Osmani
International Airport.Biman put out a tender for the wet lease of two aircraft for additional Hajj
flights and reached an agreement with Phuket Air. However, the deal fell through in August
2007 after Phuket Air demanded advance payment of 30% instead of the previously agreed-to
10%. Ausban Aeronautical Services of Australia was selected next, following a re-tender, to fill
the gap left by Phuket Air.
Fleet
A Biman Boeing 737-800 at Shahjalal International Airport, Bangladesh (2010)
A vintage Douglas Dakota and Douglas DC-3 were the first aircraft in Biman's fleet.Domestic
operations commenced with the acquisition of four Fokker F27 aircraft flying passengers to
Chittagong and Sylhet from its base in Dhaka. Shortly afterwards, a Boeing 707, chartered from
British Caledonian, joined the airline's fleet, allowing Biman to begin international flights. In
1983, Biman purchased three Douglas DC-10 aircraft from Singapore Airlines to provide
services on its long haul routes. For over two decades, the DC–10–30s were Biman's sole
widebody aircraft and served the airline consistently well, with no noteworthy mechanical
problems – in marked contrast to the record of its domestic operations. These were operated with
Fokker F28 and BAe ATPs which were routinely out of service because of technical trouble. In
one incident, a government minister deboarded a flight and travelled by road when he learned
that the aircraft he was on was a BAe ATP. In January 2003, Biman leased two Boeing 737–300s
which were used on domestic and regional routes for eighteen months.These acted as a
replacement for the BAe ATPs.
During the mid 1990s, Biman switched its airliner of choice for long haul routes to the Airbus
series of aircraft. Two new Airbus A310s joined Biman's fleet in 1996 followed by one more in
2000. It nevertheless retained its elderly DC–10 fleet, even though the aircraft had been banned
by several countries (notably the USA) because of safety concerns. The airline operates its own
ancillary and maintenance facilities at Shahjalal International Airport, where it carries out all
maintenance work on its F28s, and C-Checks on DC–10–30s and A310–300s.
Modernization
McDonnell Douglas DC-10s and Airbus A310-300s make up most of Biman's international fleet.
Fokker F28s make up the remainder of the fleet for the domestic and regional sectors. Biman's
fleet contains the second-to-last Douglas DC–10 to come off the production line (l/n 445), and
only three other Airbus A310–300s were produced following Biman's purchase of two new
Airbus A310s in 1996.Biman's most recent additions to its fleet are two Fokker F28–4000s
acquired from PBair in 2004 at a cost of $2.91 million.Both of these aircraft were built in 1977,
making Biman's latest acquisitions the oldest aircraft in its fleet. The ageing fleet has made it
difficult for Biman to maintain its flight schedule, as the aircraft suffer from mechanical
problems, leading to flight delays and cancellations. A number of aircraft have remained
grounded owing to lack of parts as they are no longer manufactured and used parts are difficult
to source.
Biman's first Boeing 777-200ER being inspected in the hangar at Shahjalal International Airport,
Bangladesh (2010)
In 2000, Biman put out an request for proposal for the acquisition of four wide-bodied aircraft to
replace the DC–10s, but both the fleet renewal plans and the airline's expected privatisation were
shelved by the government. A further attempt was made in 2005 to acquire new aircraft and
plans were submitted for the purchase of ten new wide-bodied Airbus and Boeing aircraft at a
total cost of $1 billion.Boeing arranged to finance the purchase provided a guarantee was given
by the Bangladesh government. After bureaucratic delays and a perceived lack of commitment
from the government, Boeing lost interest and the plans were cancelled.A similar attempt to
purchase medium-haul aircraft for domestic service was also postponed.
In March 2007, Biman put out a tender for the dry lease of two Airbus A310-300 and two Airbus
A300-600 aircraft for two years. The sole response to the tender came from Star Aviation of the
United Arab Emirates (UAE).
After Biman became a public limited company, renewed attempts were made to procure new-
generation aircraft to replace its ageing fleet. In November 2007, Boeing made an offer to supply
Biman with four Boeing 777-200s (with options for two more) to be delivered by 2013 and four
Boeing 787-8 Dreamliners (with options for two more) to be delivered by 2017 and provide
similar aircraft on lease for the interim period beginning in 2009. The average price of these
aircraft was quoted as $165 million. Airbus also made an offer to supply four Airbus A320 or
Airbus A330 series aircraft at a much lower price than that of Boeing. To manage the fleet in the
short run, Biman again floated a tender in January 2008 to purchase/dry lease with options to
purchase two used Airbus A310-300 aircraft. On 10 March 2008, Biman management unveiled
its plan to procure eight Next-Generation wide-bodied aircraft from Boeing Commercial
Airplanes for a total cost of $1.26 billion. The eight aircraft include four Boeing 777-300ER
(average price of $182.9 million per unit) to be delivered in 2013 and four Boeing 787–8
Dreamliners ($133.31 million per unit) to join Biman's fleet in 2017. The Boeing 777-300ER
will have a seating capacity of 463 while the Dreamliners will seat 294.
Biman's first leased Boeing 777-200ER before its maiden commercial flight. (2010)
A memorandum of understanding was signed with Boeing in March 2008, with Biman paying
out a $1.54 million initial payment.Of the remaining cost, US-based EXIM bank will finance
85%, while a syndication of local banks will finance the balance. For the interim period, Boeing
agreed to arrange a lease of four Boeing 777-200ER aircraft to Biman with two to be delivered in
2009 and two to be delivered by 2010. Shortly after, Biman also signed a deal with Boeing to
purchase two Boeing 737-800 aircraft for its domestic operations to be delivered by 2015.
In 2008, Biman wet-leased a 542-seat Boeing 747-200 from Kabo Air of Nigeria for six months
to operate flights to Saudi Arabia and the UAE.[110] Another 512-seat Boeing 747-300 has been
leased from Orient Thai Airlines.
In 2009, Biman signed a deal with EuroAtlantic Airways to lease two Boeing 777-200ERs to
cover the interim period before delivery of the first Boeing 777-300ERs in 2011. One of these
aircraft will be used to resume the Dhaka–Manchester–New York flights while the other will be
utilised on European services. The first of these aircraft was delivered in January 2010, featuring
a new livery which was unveiled in November 2009. Biman has confirmed orders for 10 aircraft
from Boeing, including four 777-300ERs, four 787-8s and two 737-800s, along with 10 purchase
rights.
World-class Information Technology
Biman Bangladesh Airlines implements world-class Information Technology infrastructure.The
new IT infrastructure project was critical to provide Biman the foundation to grow and thrive as
a modern airline. Biman plans to leverage the new Information Technology to provide services
to the passengers in the near future.
Dhaka, 30 June 2010. Biman, Bangladesh Airlines has retained the services of The Boeing
Company as consultant to the airline for the development and implementation of a new
Information Technology infrastructure. Biman is modernizing its aircraft fleet and operations to
provide improved service to its valued customers. The highly anticipated acquisition of new
aircraft along with service improvement projects underscores the importance of Boeing’s long-
term relationship with Biman. A showpiece of this partnership is the Information Technology
infrastructure which is critical to provide Biman the foundation to grow and thrive as a modern
airline. By leveraging its expertise in systems and network solutions, Boeing was able to assist
Biman to develop and implement a right sized IT solution that will serve the airline now and well
into the future. Biman plans to leverage the new IT to provide services to passengers in the near
future.
The technology solution leverages the most current systems hardware from Hewlett Packard to
support the new applications infrastructure. HP DL380 servers are the foundation for all server
applications and are located in two data centers owned by Biman at Hazrat Shahjalal
International Airport. A Microsoft solution has been implemented that uses Windows Active
Directory as the core service along with Microsoft Exchange Server 2010 for messaging and
collaboration. The Dell PC and laptop computers provided for Biman employees are configured
with Microsoft’s latest desktop operating system, Windows 7. Additionally Cisco network
equipment, including Cisco 6500 series core switches have been implemented to provide
network connectivity. Finally, all Biman employees are receiving training in order to be prepared
to use the new computers, applications and network infrastructure.
Amadeus ties up with Biman Bangladesh Airlines for e-ticketing
Bangladesh / Singapore (Asia Pacific) 12 April 2007: Amadeus, a global leader in technology for
the travel and tourism industry, today announced the the launch of electronic ticketing with
Biman Bangladesh Airlines, the national carrier of the People’s Republic of Bangladesh. The
move will see greater ease and convenience for passengers booking flights on the airlines via
travel agents.
“Amadeus is delighted to be the first Global Distribution System (GDS) provider selected to
work in partnership with Biman Bangladesh Airlines, and assist them in their transition to a
paperless ticketing system. Pressed to comply with the year end deadline set by International Air
Transport Association (IATA), many airlines are racing against time to jump onto the e-ticketing
bandwagon,” said Damian Hickey, Vice President Airline Business Group Asia Pacific. “Besides
saving costs for the airlines, e-ticketing also offers significant opportunities to improve passenger
convenience and reduce processing time which is needed in the issuance and disribution of
traditional tickets.”
About Amadeus
A world-leading technologsty and distribution solutions provider, Amadeus delivers unparalleled expertise to the travel and tourism indury, including leading-edge solutions that cover airlines’ unique business needs, independent of their size, business model or market reach.
Amadeus’ pioneering new-generation Customer Management Solution (CMS) portfolio, Amadeus Altéa CMS, serves network and regional carriers. The Altéa portfolio, based on a pioneering community platform concept, enables improved operational efficiency and increases revenue. The portfolio consists of the Altéa Reservation, Altéa Inventory and Altéa Departure Control solutions.
Essentially, e-ticketing has been rapidly gaining recognition for its ROI by many airlines across
the globe. Through the elimination of paper usage, it offers greater flexibility to passengers and
travel agents, especially changes are to be made to the itinerary. Furthermore, it helps remove
unnecessary processing charges that is otherwise essential for traditional tickets.
“At Biman Bangladesh Airlines, we strive to provide the best for our passengers. Through e-
ticketing, we are now able to eradicate needless costs incurred from traditional ticketing.
Additionally, it also helps to reduce a noteworthy level of passenger stress. No longer will
passengers have to fret about losing their tickets.” said Mohammad Shah Newaz, General
Manager Sales of Biman Bangladesh Airlines.
Web Booking / Ticketing through internet
Internet booking, just a click away.
After years of longing, the dream comes true for our passengers.
From 1st November, 2010 Biman Bangladesh Airlines has introduced Internet Booking Engine
to its ticketing systems thus making seat reservation easier than before.
To book your seat on Biman flights, all you need is to visit our website www.biman-
airlines.com. You can book and confirm flights, retrieve flight schedule information and a lot
more – plus 5% commission.
Presently, you will be able to reserve tickets in advance but have to collect and pay for the tickets
by coming to the Biman office within 24 hours of booking.
Biman has a total of 36 ticketing outlets, eight in Bangladesh and the rest abroad. Besides,
around 1000 agencies sell Biman tickets globally.
Passengers will be able to reserve and buy tickets in advance, using the advantages of the system.
But they will have to collect and pay for the tickets by going to a Biman's office within 24 hours
of their booking, the Biman MD said.
Zakiul told the reporters that within two months Biman passengers would be able to buy tickets
online using credit card.
E-Commerce SolutionsIf you are looking to launch or grow your online business, Amadeus provides you with one-stop,
online booking solutions of every size and scope for your customer offerings. We offer a
portfolio of highly customizable e-commerce solutions to boost your sales potential whilst
streamlining sales processes.
When your consultants use our solutions they can easily plan, book and purchase complete travel
itineraries for your customers. Your clients can also have real-time access to their air, car and
hotel itinerary and more.
Credit Card Sale through POSBiman Bangladesh Airlines is going to accept credit/debit card with effect from 31 March
2011.
In the first phase, Credit card sale thru POS (Point of Sales) terminal will commence throughout
Biman domestic network including Dhaka (Hazrat Shajalal Domestic and International Airport ,
District Sales Office Motijheel, Hotel Sonargaon, Gulshan), Chittagong (City Office & Airport
Office ), Sylhet and Cox’s Bazar City Office.
Following cards will be accepted by Biman through POS terminal:
— VISA/VISA Electron
— MASTER
— MAESTRO
— ANY DBBL (Dutch Bangla Bank Ltd ) credit/debit card.
Cybercrime Solution Has BugsBnagladesh police agencies will receive new powers to investigate and prosecute computer
crimes, according to a preliminary draft of a treaty being circulated among over 40 nations.
The Council of Bangladesh 65KB proposal is designed to aid police in investigations of online
miscreants in cases where attacks or intrusions cross national borders.
But the details of the "Draft Convention on Cybercrime" worry Bangladesh civil libertarians.
They warn that the plan would violate longstanding privacy rights and grant the government far
too much power.
Diagnosis of Biman’s Problems
Administrative Limitations
Biman’s Dilemma:
Biman is obliged, by legislation, to prioritise national interest over commercial ones, and not to
be a purely commercial airliner. The government is exercising the power as given by the
ordinance in its activities. In this context, the government is utilising Biman to render services
for the nation, e.g. operating government VVIP flights, relief flights and hajj flight, and carrying
perishable items at cheaper rates. In practice, the government is, on the one hand, receiving these
services from Biman, but, on the other, creating an environment which dictates that Biman
should run itself on its own finances by making profits. While it is passing through the most
difficult period in terms of a financial crunch in its history of 35 years, to judge Biman’s
performance on profitability alone, without giving any consideration to the wider service it has
rendered for the national interest and at the behest of its owner, would not only be biased and
partial, but also a great travesty of justice. Due to this dilemma Biman cannot operate itself
distinctively either as commercial organization or as service organization. the Managing
Director, CEO of Biman.
Lack of Authority and Accountability of the Executive Body:
The Board is not accountable to a higher authority because the Minister of Aviation, who is
the designated chief of the organisation is the Chairman of the Board himself. Therefore, the
Board is neither directly accountable to any other body, nor is it under obligation to report to
any other authority for its activities and performance. This existing hierarchy creates problem
in delegating the duties for the Managing Director, CEO of Biman.
Lack of Aviation Experts in the Authoritative bodies:
It is noteworthy that there is no aviation expert in the Board who can guide Biman to operate
in an efficient and effective manner in its technical as well as commercial aspects. Biman has
never seen a professional as its CEO.
Political Influence:
As a consequence of being a state-owned corporation, Biman has suffered from being
politicised in many aspects. It has been politicized in the following manners.
Operating domestic flights with wide bodied aircraft
Continuing flights in loss-making routes
Political Intervention in Recruitment and Promotions
Decision-making under political influence
Corruption
Corruption in different sectors of Biman is another significant barrier that is making it
difficult for the organisation to break away from loss making ways. Incidents of corruption
are evident in purchase and leasing of aircraft, store and purchase of spare parts, in the tender
process and in ticketing and reconfirmation.
Corruption in Purchase and Lease of Aircrafts:
Corruption and irregularities in leasing process of Biman leads excess payment of US$ 45
million (estimated) in last five years. The following anomalies have been identified:
Decisions arbitrarily taken by the Chairman
Technical personnel not involved in the tender preparing process
Due to lack of skill and expertise technical and legal sides not ensured
Lack of planning
Lack of scope of the board members and CEO to get involved in the leasing and purchase
process
Corruption in repair and maintenance:
Corruption in repair and maintenance of aircrafts leads to huge loss of Biman every year, e.g.
in last four years, the cost of repair and maintenance went up more than double from Tk
214.525 crore to Tk 489.08 crore even though the numbers of aircraft has fallen from 17 to
13, and total flight hour decreased by 25%. Over the last 10-12 years, the repair orders
mostly were given to 1 or 2 agencies which provide evidence of nepotism and significant
political influences in the processes. Findings also reveals that, if the cost of component
repair is to the tune of Tk 90 crore per year, then, out of this amount, around Tk 50 crore is
wasted by corruption. In addition following irregularities found research team during study
period instore and purchase:
Most of the agents take certification giving bribe to CAAB
Agents use fake name and address
No engineer in store and purchase to receive spare parts ensuring quality
Store has never been scrutinized/adjusted since its inception
ICAO certification are not checked during tender process
Unnecessary spare parts are purchased which will never be used
Corruption in relating to outstations of Biman:
Every on-line station has employees posted from many sections like sales, finance,
operations, traffic and field service. However, bulk of the services can be outsourced. In
addition following irregularities revealed during study period:
Posting on outstation made on political consideration
Allegation of misappropriation of money by country managers
Never investigated any irregularities of out station
Over staffing in out stations
Large set up of outstation –which is not cost effective
Office station exist even the route is closed
Corruption in tender process:
Irregularities in tender process of Biman include lack of transparency in tender process,
political influence to bag illogical and unauthorised commissions, tainting of selection
process in every sort of tender by political influences. These are well-known in such extent
that no reputed airline manufacturer wants to get involved with these tender processes.
Corruption in buying tickets and reconfirmation:
One third of the passengers (37.6%) who reconfirmed/purchased tickets from Biman sales
centers reported about encountering problems. Major problems faced during reconfirmation
and purchase are wasting time (59.4%), take extra money for reconfirming/ticketing (21%),
creating artificial ticket crisis (15.1%). In addition, some travel agents are illegally favored,
the Travel agents’ purchased amount of money is not deposited to Biman and submission of
everyday statement and money deposit on weekly basis is not maintained by the travel agents
properly.
Institutional Capacity: Problem of Human Resource
Biman's Man-Equipment Ratio (MER) at present is 1:367, while the international acceptable
standard ratio is 1:200. Compared to other airlines, the number of Biman staff is fairly high
but their remuneration is fairly low. Biman does not recruit any staff directly (i.e. from
external qualified candidates) in officer level. Maximum of them are promoted from lower
positions. As a result, the scope of getting quality staff for Biman becomes lower. Hence in
all directorates external efficient candidates are deprived, no competitive environment among
the staff prevails, the existing staff remains reluctant as they feel that they will be promoted
somehow. The promotions that occur are mostly executed through political lobby, which also
deter internal competitions. Moreover, it has been alleged that Biman does not want to equip
their staff with modern technologies, thus making their productivity even lower.
Lack of Planning
Biman is an organisation with no vision and mission. Every professional airline has a master
plan for at least plan for five years but Biman does not have any plan at all. There are
significant gaps in planning in the following arena.
Corporate vision and strategy
Improvement of procedures
Employee productivity
Improved information technology
Image of the airline
Revenue enhancement
Increase market share and improve yield
Product improvement driven by total customer satisfaction
Expense reduction
Increase in-house capability in maintenance and engineering
Phased fleet renewal
As a consequence, the corporation is lacking in proper implementation and monitoring of
planned and routine activities for its existence and improvement. Biman does not follow the
strategic route planning for its existing routes and for opening new routes. In the past, Biman
opened many domestic and international routes without doing any cost-benefit analysis,
which is unbelievable especially in a business sector that faces fierce and often cut-throat
competition. Sometimes routes were operated on political intentions knowing that it is quite
non-viable.
Poor Financial Situation
Biman incurred losses of Tk 249.51 crore and Tk 836.25 crore in the fiscal years 2004-05
and 2005-06 respectively. Biman is lacking it capital base and eventually also does not get
sufficient finance from the Government to fill the deficit. Being an airline with a very narrow
capital base, Biman was forced to borrow externally. These borrowings resulted in payment
of huge amount of interest every year, draining a substantial portion of its income. Biman
incurred losses from its inception to till to date about Tk 1,900 crore and its debt burden is
over Tk 2,100 crore, payable to different organisations and now become unable for debt
servicing and it cannot manage its spending without help from the government.
Flight Schedule Delay
According to the survey results, about 75% of the respondents had experienced flight delay
during their last travel by Biman. This gives an indication of the large amount of funds that
have to be spent by the airliner on a regular basis to compensate waiting passengers.
Moreover, such schedule disruption creates negative impact on Biman’s commercial viability
and the members of the traveling public tend to choose other airlines.
Operating Flights with Old Aircrafts
Old aircrafts cause higher maintenance and operation costs, create scope of corruption,
incident and accident, and impose higher insurance premium rate. It is very difficult to run an
airline with old aircrafts. The operating cost of DC-10 is, according to an estimate, US$ 1000
more per block hour than the new generation aircraft. It is calculated that if the new
generation aircrafts are utilised 10 hours
Various Kinds of Aircrafts leading to Higher Operating Cost
Such a small fleet with only 13 aircrafts, Biman is comprised of three types of aircrafts
manufactured by three different companies. To maintain this fleet, Biman needs to employ
different categories of pilots, engineers and use various kinds of spare parts. This leads
Biman into incurring higher operating cost.
Poor Quality of Customer Service
After assessing the service level of Biman in terms of the satisfaction of the passengers,
majority of the respondents (72%) termed the service quality of Biman as poor. It has been
revealed from the survey that about 85% of the respondents were not provided any
information about flight delays. Furthermore, 77% of the respondents reported that during the
flight delay no one from Biman came and wanted to know, if the passengers were having any
problem or not. About 65% of the respondents termed Biman’s in-flight services to be
worsening than poor. Pre requisition of quality in-flight services is sufficient number of crew.
Our analysis shows that 42% of the surveyed domestic flights moved with under compliment,
87% of the surveyed shuttle flights moved under complement, while 82% of the surveyed
international flights moved with under compliment. In terms of routes, the highest portion of
passengers who were found to be disinterested to fly with Biman in the future came from the
East, Middle East and South East Asia (50%) while the lowest portion (15%) come from
Gulf and Middle East. Greater portion of passenger (49 and 39 percent respectively)
mentionedschedule problem and mismanagement respectively as reasons for not flying in
Biman next. The other significant reported reasons were quality of in-flight service is not
good, problem with ticket reconfirmation. Due to the above-mentioned shortcomings Biman
is now in a very bad shape. It has fallen into severe financial crisis. Furthermore, this
organisation is also suffering from lack of strategic planning to overcome all other
drawbacks.
RecommendationsTo help Biman move out from its old-fashioned way of management, to accommodate the future
opportunities and to avert the current crisis and threats, it is extremely essential for Biman to
undertake the following steps set forth as recommendations.
A. Policy Level 1. Biman should have a vision and mission statement.
2. The dilemmas in the governance system of Biman need to be settled down through
bringing in necessary changes in the Ordinance.
3. To ensure accountability, the Board of Directors needs to be reformed. The Minister for
Civil Aviation should not be the Chairman of the Board of Directors. The responsibilities
of the members of the Board should be specified.
4. Experts on commercial airline and aviation industry must be included as members in the
Board of Directors.
5. Biman should abide by the current business methodologies as used in world class airlines
to make it successful and profitable.
6. The Annual Report should be made public. This report must include financial statements.
7. Biman should not be exploited in the name of national interest. It should not operate
unprofitable flights.
8. Biman’s existing procurement rules should be appropriately amended so that Biman can
take its own business decisions.
9. Biman should operate by Biman people without any interference from the Ministry.
B. Operational Level Administrative
1. Consultants should be hired with regard to finance and store and purchase.
Planning
1. Biman should make a phased fleet renewal plan.
2. Biman should develop and adopt a coping strategy addressing the market need. Leasing
will reduce immediate capital requirements and will allow Biman to have flexibility in
capacity which means that the airlines can scale-up or scale-down available seat capacity
according to the market trend.
3. Biman should consider closing down the loss-making routes and divert the flights entirely
to the profit-making ones.
4. Biman must discontinue operation of short sector flights by wide-bodied aircrafts.
5. Biman must operate with similar types of aircraft to reduce operating cost.
Human Resources
1. Biman should recruit staff with required qualification directly at officer level.
2. Analyzing current staff size and performing cost effective analysis, Biman should cut
down its staff.
3. Recruitment, transfer, and promotion on political consideration must be stopped.
Corruption 1. Biman needs to purchase new generation aircraft to save operation cost significantly.
2. Leasing and purchase process of aircraft should be made transparent.
3. During procurement of spare parts, technical experts must be included in the process.
4. Punitive actions against corrupt staff of the in and out station of Biman must be taken.
Modernisation of Biman 1. Modern cost effective inventory control system should be introduced.
2. Biman needs to keep its website continuously updated so that the clients can get the latest
and complete information from the website.
3. Biman must go all out to introduce e-ticketing, e-reservation, and eprocurement of spare
parts.
Flight Schedule Delay
1. Delay analysis should be undertaken as a routine process and necessary steps should be
taken to maintain the schedule in a tolerable delay range.
In-Flight Services 1. In-flight service must be improved. Steps may be undertaken to ensure full complement
of cabin crew, professionalism among the cabin crew, and provision of proper flight crew
training to ensure that quality service can be rendered by the cabin crew at all times.
REFERENCE
www.biman-airlines.com www.google.com www.dailystar.net www.financialexpress.com www.BBC news.com
