WORLD Bank in its re port entitled Government That Works Re forming The Private Sector has advocated the case for privatisation of Biman Bangladesh Airlines on the ground of its having low productivity and high operating costs as compared to other established carriers as well as industry's average The study has no doubt been carried out in a highly professional manner It would be difficult to question the findings which are based on economics of operation using the internation ally accepted indicators: nevertheless. there are other overriding and non-economic considerations which cannot be disregarded altogether. The purpose of this paper is not to defend the poor overall per formance of the airline, but to offer an alternative view to make it competitive in an era of globalisation, responsive to the needs of the market and improve its ppblic image.
The major findings of the report are (a) low productivity of personnel, (b) low productivity of flying personnel, (c) low ratiq of passenger per personnel. and (d) high operating costs. Obviously, operating costs cannot but be high when there is low productivity in all areas of its activities. Moreover. Biman's performance will have to be viewed in the context of the prevailing socio-economic milieu; when most other public sector enterprises are equally, if not more, inefficient wouldn't if be naive to expect the national carrier to behave irf a different manner?
One can identify a number of factors which might have contributed to its inefficiency. Firstly, reported Interference from top political hierarchy, specially with regard to fleet modernisation. For example, sale of Boeing 707-320C aircraft allegedly at throwaway prices is a case in point. Had these aircraft been in the fleet of the airline today. Biman could have exploited the potential of cargo market with maximum advantage. The written down value of the aircraft would have been zero by now. Just by recovering direct operating costs Biman could prof-itably operate all-cargo flights out of Bangladesh. The same could be said about the sale of Fokker F27 aircraft shortly after expensive interior refurbishing. incidentally. F27 hap pened to be one of the most successful aircraft of its class in the world: it's pity that It may be out of production In the near future. The replace ment of F27 by ATP has been one of the most controversial ■decisions ever undertaken by the airline. And finally, purchase of a new DC 10-30 airdraft (one of the last few to come out of the production line) has not been a very wise and prudent act. Reportedly, these decisions were not taken by the Blman management out
of its own volition, but at the behest of powerful and Influ ential quarters beyond the reach of the management. Left to itself. Biman would have opted for products more appropriate to its route structure and commercial needs.
Secondly, the quality of personnel. It is an undeniable fact that overall efficiency of per-.sonnel at all levels is anything but laudable: this — more so at supervisory and mid-management level — is a general per ceptlon. This is attributable to the reported inability of the management to make direct recruitment of professional cadre at junior and mid-management level. The system of ' firomotion almost entirely rom within and induction of a large number of retired armed forces personnel seriously eroded professionalism within the organisation.
Thirdly, ministerial interferences also contributed significantly to the “weakness of the airline. It is rumoured that on many an occasion fleet planning exercises and other vital decisions were delayed due to such interference. In fact, a minister as a matter of principle should not become the chairman of the board of any state enterprise or statutory body. The position of a minister should be that of a supreme arbiter and he should not get involved in operational matters.
Most of the major airlines of Asia and Europe are either wholly or partially owned and controlled by the state. At the same time, some of the airlines of Asia are considered to
duMry s standards Thus, in volvcment of government in the management of an airline does not. ipso facto, render it inefficient. Efficiency is a function of responsive and re sponsible management and this can be achieved even under the umbrella of state su pervision and involvement
An airline cannot be viewed only as a provider of services its strategic and social obligation cannot be overlooked. Thus, the state cannot and should not divest itself of its obligation to safeguard national interest.
One can put forward a case for privatisation strictly on economic considerations: but it loses its validity when viewed in the context of contemporary scenario. However, what is needed urgently is to restructure and overhaul the organisation thoroughly to cause a break from the past and turn over a new leaf. It must rid itself of inertia and formulate a plan for the future based on pragmatism and vision. In the perception of the travelling public of Bangladesh the national carrier is 'un-sal-vageable'; some even feel stronsjy that it should be closed down as was done in Sri Lanka, some years back. I do not subscribe to any of these views. Its image can be restored and performance improved if a serious effort is made by all those who are associated with the airline with a sense of purpose and com tnitment. and supportive intervention of the government.
Airline is a highly competitive and sophisticated service industry. Small airlines are most vulnerable in this competitive environment. Even the very big ones — the giants of the industry — are finding it difficult to maintain their supremacy without some form of alliance. As a first step towards improving its efficiency Biman must enter into some fortrf of technical collaboration with a well-established airline. Such a collaboration will en able It to have access to the most uptodate development In management techniques in the field of air transport Industry There are a numbei of other areas which deserve Immediate attention
Biman management must immediately undertake a com prehenslve fleet planning exercise. if not done already’ It Is a painstaking effort which can
only be accomplished by people with high professional expertise and technical competence. Reportedly, a series of exercises were carried out in the recent past; but nothing came out of them for reasons not known. It is rumoured that contrary directives were given from the top from time to time which hindered the work of the committee. Presently. Biman has a fleet which does not fully meet the market potential. The ageing DC 10s need to be replaced by bigger and more advanced aircraft urgently; otherwise Biman will lose out to its more efficient competitors. Acquisition of two Airbus A310-300 is a'commendable decision which is expected to Improve the reliability of service. Likewise, the question of fleet rationalisation in the domestic sector should be addressed on a priority basis. THese urgent issues can only be deliberated upon by competent specialists drawn from the relevant branches of the airline. If necessary, services of expatriate experts .should be obtained to formulate an acquisition plan which will see the airline through the first decade of the next century.
As mentioned earlier. Biman could not fully exploit the growing freight market due to inadequate capacity — the consequence of ill-conceived sale of Boeing 707 320C. While formulating the future fleet modernisation plan this matter will have to be given the consideration it deserves. Biman's earnings can be substantially Increased from Ireight revenues with proper planning and effective marketing strategy.
Being a service sector with strategic and commercial significance Blman does deserve state support But it will never be able to stand on its own and overcome its weak nesses and shortcomings if it does not make serious efforts Io become self-reliant; it can-
not continue to depend on the benevolence of the state for qll times to come. This calls for formulation of a strategic plan based on a realistic projection
, of future growth.
This challenging scenario demands the creation of a professional management cadre drawn from amongst the best, available products of universities with the requisite academic background and proven competence. Presently. Blman is pitifully weak specially at miamanagement level in most areas of airline operation. It must formulate a recruitment policy and career development programme which will attract the most promising university graduates.
Over the years Blman has improved its maintenance capability; however an accelerated development in this area deserves immediate attention. It must keep pace with future growth. With more and more sophisticated aircraft dominating the market, there is a greater need for well qualified and bettei; trained maintenance personnel down the line. A weak maintenance and engineering department will be a serious drain on the resources of the airline.
Nevertheless there has been some criticism in respect of awarding of a maintenance contract to Alitalia, a sick airline of Europe. Fortunately, the contract has since been terminated. Acquisition of two new Airbus A310-300 aircraft with Pratt & Whitney (P&W) engines instead of General Electric (GE) engines also raises some technical questions. Incidentally. Biman's existing fleet of DC 10s are fitted with GE engines and Biman’s maintenance crew are familiar with this engine. Moreover, almost 60 per cent of all A310-300 aircraft delivered globally are fitted with GE engines: in other words, aircraft fitted with GE engines have good resale value.
It is evident that mere privatisation will not bring about the desired results unless fhq concomitant issues are addressed simultaneously. Moreover, private sector may not come forward to acquire an enterprise with such a heavy debt burden, poor public Image, low productivity and excess staff. A piecemeal approach without an integrated plan of action will fail to launch the airline on a properly guided takeoff path: it wifi continue to crawl, not fly. A comprehensive restructuring plan based on (a) need assessment. (b) situation analysis, (c) ciparly defined goal, and (dl available implementation strat-i egy will make the national car rier a dynamic one to face the challenges of the future.
The author, a retired secretary to the goutrnment and ambassador, teas the chief ex ecutive of Biman during the early years of its operation and later secretary in the Ministry of Civil Aviation and Tourism.