Biman now in severe liquidity crisis, seeks BDT 628cr fund from govt
Biman Bangladesh Airlines is now in severe cash in addition to liquidity crisis and the problem has forced seeking a bailout fund of BDT 628 crore from the federal government. This is as a result of the impact created by COVID-19 pandemic.
According to a report, with no flight operation, the airline currently does not have any income. Moreover, it had to create refund for cancelled and suspended flights. These have consumed all of the cash in hand.
In a letter to the Ministry of Civil Aviation and Tourism (MOCAT), the national flag carrier portrayed its current deplorable finances. To ride over losing incurred in recent months and current liquidity crisis, Biman has asked a fund of BDT 628 crore as quickly as possible, to pay income of employee for the month of April and meet up with the fixed cost.
Biman in its letter to MOCAT informed that in jan 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 % when compared to passenger carried in the last 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 needed to be designed for these flights, with no charge.
Biman’s income from cargo and ground handling also have dipped low. Biman earned BDT 900 crore from both of these sources in 2019. Compared to income of average BDT 75 crore per month, Biman has earned only BDT 90 crore in first 90 days of the year. In March, Biman has lost BDT 400 crore revenue income.
In the letter Biman mentioned that while there is no income, it includes 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.
