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Not a lost case

Steele's bright stint shows inefficient management clips Biman's wings

Shariful Islam
Kevin John Steele might have not succeeded in turning around Biman during his stint as managing director, but he certainly proved that the national flag carrier could have a future if run by an efficient management.
Biman's on-time performance improved signifi-
cantly after Steele took the helm at the national airline in March last year. The rate of on-time flight departure has gone up to about 70 percent from about 30 percent in 2012, said Biman insiders.
Steele, the first foreign chief execu- tive officer of Biman, introduced modern ticket reservation and online ticketing systems, a new website and biometric attendance system at Biman offices.
The national carrier has already upgraded its reservation system and launched a frequent flyer programme.
Biman would be fully profitable in fiscal 2014-15,
he told The Daily Star a day before he resigned as Biman chief on April 17.
A new revenue management system, which would be in place in three months, would help Biman saveTk 156 crore ($20 million) annually, he said.
The new system would give priority to passengers from Dhaka in booking tickets.
For example, Dhaka's passengers would get priority over those from Kuala Lumpur in terms of booking on Biman's Kuala Lumpur-Dhaka-Jeddah route.
The ticket fare from Kuala Lumpur to Jeddah via Dhaka is $900 while it is $850 from Dhaka to Jeddah.
Biman will earn about Tk 78 crore ($10 million) a year once it signs a codeshare agreement with another airline. The two airlines will share the same flight under the aviation business arrangement. Biman is already in talks with a big airline.
Much of Steele's failure arises from the fact that he couldn't make the entire staff of Biman work as a team. Steele said he found most of his highly-placed officers inefficient, and the Biman Board sometimes interfered even in minor issues.
It was not easy to work for Biman with a civil service unwilling to work, said the former managing director.
Steele also couldn't cut down Biman's losses in the current fiscal year.
The losses rose to Tk 148 crore ($19 million) in the first eight months till February of fiscal 2013-14, exceeding the expected loss ofTk 94 crore ($12 million) for the fiscal year.
The reason for the soaring losses is a drop in outgoing and inbound passengers from Middle East countries, including the UAE, Kuwait and Saudi Arabia, where manpower recruitment remained almost stalled, said Biman officials.
The national carrier also saw a sharp decline in inbound international passengers from November last year to January due to political unrest in the country.
Biman suffered a loss of around Tk 78 crore ($10 million) in only two months from November to December, Steele told The Daily Star.
Besides, the airline has been incurring losses on the Dhaka-Yangon and Dhaka-Hong Kong routes, and the newly opened Dhaka-Frankfurt route.
It also suffered losses on the Dhaka-Delhi route for around a year, but managed to turn it profitable in March.
The national flag carrier had set a target of around Tk 2,611 crore in revenue from passengers from July last year to February this year.
But it could earn Tk 1,868 crore in the eight months, while the amount was Tk 2,282 crore during the same period of fiscal 2012-13.
Biman officials said the situation started improving from February, as more passengers started travelling to Saudi Arabia to perform Umrah.
As the airline's peak summer season started from March, Steele hoped Biman would get close to their expected loss by the end of the current fiscal year in June.