The recommendation of the 'high-powered' committee is highly confusing. If hundred-percent shares of Biman would still remain with the government after the proposed restructure, how would that eliminate any of the reasons why Biman is in the state that it is in today? Back in September 2000, Salomon Smith Barney, a financial institution under Citigroup, prepared and submitted an Information Memorandum to Biman in regards to the government's interest at that time to sell a part of its equity interest in Biman. That memorandum, albeit somewhat dated now, identified certain extremely important factors to consider for any kind of restructuring. I wonder if the current committee had the time to find out the document and dust-off for a read.

The Adviser for Civil Aviation & Tourism, Mr. MA Matin was quoted as saying, “I shall recommend making Biman a limited company by June.” The last financial audit, which was not even comprehensive, was performed at Biman for the fiscal year 2004 2005. In order to properly transform Biman from the structure of corporation governed by the ordinance to the structure of a public limited company to be governed under the Companies Act, a full-fledged and comprehensive audit is imperative, which itself can take between three to six months to complete. Trying to do a good thing promptly should not end up in something stupid and worthless.

From my little knowledge in the commercial aviation business, I have gathered together a list of eight tasks that the government should accomplish with the case of Biman:

1. Exempt Biman from PPR-2003: The Public Procurement Regulation of 2003 prepared by the World Bank for the government to follow for public procurement activities has turned out to be a nightmare for Biman. It has 'encouraged' corruption at Biman, and has crippled the airline's fleet modernisation efforts. The airline should be immediately exempted from having to conform to the PPR-2003 as far as aircraft and aircraft spares procurement is concerned. The government should take a bold and determined initiative to do this favour for Biman. Of course, all aircraft and spares purchases should be fair, transparent, and accountable to the Board of Directors.

2. Restructure Biman's Board of Directors: Instead of randomly chosen bureaucrats and lawmakers, it should be people with professional experience in the airline business and related sectors who should constitute the Board of Directors of Biman. The Managing Director should be flanked with professionals with extensive experience in travel business, finance, human resource, IT, and such sectors which are directly related with the airline business.

3. Allow accountable freedom and authority to the executive management: In its 35-odd years of operation, Biman has had 24 Managing Directors at the helm of the airline till date. Well, not quite at the helm really. Through its lifetime, the actual control of Biman was always with the Ministry of Civil Aviation and Tourism while the Managing Directors were appointed to take the daily heat, and simply execute decisions imposed by the ministry. This must change once and for all.

The Managing Director should be appointed for a minimum and renewable period of five years to achieve a practical set of objectives. His actions must be accountable to the restructured Board of Directors, and to the satisfaction of the Board and upon acceptable success of attaining the objectives, his appointment may be renewed. He should not be wasting four hours a day on an average in going to and coming back from the ministry, which has been the case in Biman for long. The ministry may only be furnished with periodical reports on progresses made, and may only interfere and/or consulted with in case of significant issues where the government is or ought to be involved.

4. Plan and finance for immediate induction of aircraft: With just four of the nine wide-body aircraft operational, Biman is faced with severe capacity shortage, which is allowing international carriers to take away whatever passenger market Biman is left with. The airline should immediately be allowed to lease four Boeing 777-200ER/300ER or Airbus A330-200/300 aircraft for operations to the Middle-East and Europe, and three Boeing 737-800 or Airbus A320 aircraft for domestic and regional routes. Sticking with either one of the manufacturers would be beneficial for negotiating prices.

These leased aircraft should serve Biman until 2014 when the new-generation aircraft such as the B787 or the A350XWB should replace the B777 or A330s. The orders for the new-generation aircraft should be placed now in order to receive them in time in 2014, and both Boeing and Airbus would be glad to arrange at least 80 percent of the financing required if the government is convinced to issue a sovereign guarantee in their favour. The remaining 20 percent can come from nationalised commercial banks as well as from private commercial banks.

The choice of aircraft between the manufacturers should be based upon mature analysis and not on anyone's personal choice or mindset. Evaluations of aircraft should not be based only upon initial acquisition costs, but also considering operational economics, maintenance costs, and industry-projected residual values.

5. Restrict union activities for a stipulated timeframe: As of year 2000, Biman had as many as 10 labour unions with the Bangladesh Biman Employees Union acting as the collective bargaining agent. While I am not suggesting a complete ban on union activities, I firmly believe that certain rights should be restricted for the stipulated timeframe that it may take for Biman to go through the restructuring process.

On 27th September 2005, Biman's employees went on a strike demanding a pay-hike, which had seized flight operations and handling in all of the country's airports for nine hours, leaving thousands of passengers suffering. While raising legitimate demands can be well within the rights of any labour union, I am strongly against the idea that they may be allowed to hold passengers and airlines as hostage, and damage the country's image internationally through such an appalling act of irresponsibility.

6. Restructure routes and pricing and streamline marketing processes: The Information Memorandum by Salomon Smith Barney in 2000 revealed that Biman's route structure was often impractical, that Biman did not participate adequately in Bank Settlement Plans (BSP) worldwide and that its sales and marketing processes were not optimised. All of these directly hurt the generation of revenues and must be addressed promptly. Route structures should be planned according to capacity and market demand and flights must be scheduled properly to reach that market. Biman should also participate in every BSP arrangement so that more travel agents around the world can sell Biman's tickets, and the tickets should be priced based on advanced revenue management systems which guarantees higher yield at competitive ticket prices calibrating the traffic mix. In order to achieve such revenues in a competitive business environment, the marketing processes must be streamlined, which is only possible through greater IT penetration.

7. Adopt a long-term business plan and prepare for privatisation: With the induction of new aircraft and the subsequent restructuring of routes and fares, Biman should be able to prepare a sustainable business plan for itself for the next 20 years. Once that is in hand, the government should transfer all liabilities up to that point of time into a block account. It should then release at least 51 percent shares for offering to all capable airline investors locally and internationally, or release the 51 percent shares through IPO after turning Biman into a public limited company. The government should also be determined to let go the remaining 49 percent of the shares once the airline can demonstrate self-sustainability without any more government support, until which time the government shall also be entitled to the dividends for its 49 percent stakeholding.

8. Deregulate environment and allow competition: Until recently, Biman enjoyed exclusive use of the international air traffic rights of Bangladesh as governed under the Air Service Agreements (ASA) with other nations. With this exclusive privilege, Biman were given an illusive 'protection' by the government. Through over a decade, the airline passenger traffic growth in Bangladesh was averaging around 6 percent annually, whereas Biman has experienced a steady decline in its market share over its lifetime. Since no private airlines of Bangladesh were allowed to operate in international routes where Biman had a scheduled service, the growth of traffic were all taken away by the international carriers whom neither Biman nor the government had any way to stop.

In our neighbouring countries of India and Pakistan, deregulation of the airline industry and allowing competition to the national carriers from private airlines have not only secured most of the traffic growth but also forced the national carriers to improve their efficiency and competitiveness. The same should be practised here in Bangladesh. The Civil Aviation Authority of Bangladesh should set acceptably high-standards for local airline start-ups (to prohibit sub-standard efforts) and allow any available routes they wish to operate on. If there are frequencies on any route which are occupied by Biman but not regularly operated, those should be revoked from Biman and made available to the private operators too, and let competition do its magic.

Through the execution of the eight tasks mentioned above, what we will have in hand is a scenario pretty similar to that of rope walking at circuses -- running an airline profitably in today's world requires as much concentrated focus and skills; Biman will have to take the challenges on its own everyday just like the rope-walker does to make his living; and the government will just have to be there as the safety net, least desired to be used.

However, it will have to be a circus minus what is quite annoying to Mr. Matin himself -- the clowns!

The writer, currently an aviation industry consultant, has previously worked on projects with The Boeing Company, Honeywell Aerospace, and FAA's Operational Evolution Plan (OEP) in 2004-2005.