Biman’s then managing director Kevin John Steel took the lease from the little-known EgyptAir in order to grow Biman’s profit by increasing fleet capacity
Biman Bangladesh Airlines has incurred losses of Tk1,200 crore from two leased Egyptian aircraft in the last five years since 2014.
Defective engines of the two aircraft compelled Biman to spend a substantial sum for their engineering and maintenance, resulting in the huge loss.
From 2014 to 2018, the two aircraft brought Biman Tk2,329 crore in revenue against the total expenditure of Tk3,529 crore until November this year.
Biman Managing Director Mokabbir Hossain told The Business Standard that Biman spent Tk142 crore for rent, compensation and redelivery purposes of the two planes in five months from June to November.
"This expenditure likely to have negative impact on Biman's profit in this fiscal year," he said.
Biman recently prepared a profit and loss statement for the two aircraft that were returned to EgyptAir – one in July and the other in October this year.
According to the statement, Biman spent Tk1,305 crore only for maintenance of the aircraft and their engines. Biman had to take engines on lease for Tk177 crore as the original engines were found defective within just one year of operation.
Biman leased the two aircraft from EgyptAir in 2014 for five years, but it could put them in use for only one year. Both aircraft had been kept grounded since 2018.
Even though both aircraft were not in operation for two years, Biman spent Tk134 crore in rent. The total cost of rent was Tk571 crore in five years.
Biman's then managing director Kevin John Steel took the lease from the little-known EgyptAir in order to grow Biman's profit by increasing fleet capacity, according to a review report of the organisation.
However, the aircraft did not help Biman increase its fleet capacity. Rather, they became an extra burden due to inefficient dealing with the lessor, creating huge trouble for the national flag carrier.
Despite having the two defective aircraft grounded for two years, a section of Biman high officials were unwilling to return those. As a result, Biman spent Tk134 crore for paying rents of the grounded aircraft.
During these two years, Biman incurred a loss of Tk297 crore, according to Biman's statement.
After Kevin John Steel, two new managing directors – AM Mosaddique Ahmed and a foreigner – took the helm of Biman in the last five years since 2015. But none of them paid attention to settle the EgyptAir lease issue to save Biman from further losses.
Finally, the Ministry of Civil Aviation and Tourism took the initiative to re-deliver the two aircraft to EgyptAir.
In May this year, Mosaddique was removed from his post after corruption allegations against him had surfaced. Mokabbir Hossain, who was the additional secretary of the ministry, replaced him.
Mokabbir took charge of Biman as the managing director in September and formed a probe committee to look into the mismanagement in returning the two aircraft to EgyptAir.
At the end of October, he formed the two-member committee and asked it to submit the report by November.