Biman now in severe liquidity crisis, seeks BDT 628cr fund from govt

- A Monitor Desk Report 08 Apr, 2020 | 914 Views|-+
Dhaka: Biman Bangladesh Airlines is now in severe cash as well as liquidity crisis and the situation has forced seeking a bailout fund of BDT 628 crore from the government. This is because of the impact created by COVID-19 pandemic.

According to a report, with no flight operation, the airline currently has no income. Moreover, it had to make refund for cancelled and suspended flights. These have consumed all the cash in hand.

In a letter to the Ministry of Civil Aviation and Tourism (MOCAT), the national flag carrier portrayed its current deplorable financial situation. To ride over the loss incurred in recent months and current liquidity crisis, Biman has asked a fund of BDT 628 crore as soon as possible, to pay salary of employee for the month of April and meet the fixed cost.

Biman in its letter to MOCAT informed that in the month of January 2020, passenger number on Asian routes (main routes of the airline) fell by 15 per cent compared to 2019. In February, the number nose dived further to 58 per cent compared to the passenger carried in the previous year.

In March, Biman had to cancel 114 flights. With the worsening of COVID-19 situation—various countries-imposed flight ban—Biman had to cancel 698 international and domestic flights. Full refund had to be made for these flights, without any charge.

Biman’s income from cargo and ground handling have also dipped low. Biman earned BDT 900 crore from these two sources in 2019. Compared to income of average BDT 75 crore a month, Biman has earned only BDT 90 crore in first three months of this year. In March, Biman has lost BDT 400 crore revenue income.

In the letter Biman mentioned that while there is no income, it has a fixed cost of BDT 628 crore. The fixed cost includes administration—BDT 203 crore; aircraft loan installments—BDT 61 crore; lease rent of aircraft—BDT 98 crore and maintenance of aircraft—BDT 266 crore.

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