Biman chief seeks $20m in savings through 'fine tuning'

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The new chief executive of Biman Bangladesh Airlines says that he has identified several small changes that could generate significant savings for the carrier.

"We need to improve revenue and reduce costs by about $70 million per annum," says Kevin Steele, who was appointed as Biman's managing director and chief executive in March.

Steele, who was formerly the senior vice-president for commercial at Nigerian carrier Arik Air, says that he has already identified "eight or nine 'fine tuning' ideas" where the Bangladeshi flag-carrier could easily generate savings or increase revenues from its operations.

"I think that with these ideas, plus a few more, we can quickly save costs or improve revenue by about $20 million per annum," he says.

One example is reducing the number of passengers that it has on its waitlists from 50 to 15. Steele says that this could reduce its carrier's distribution costs by $1.5 million per annum "just by a few keystrokes on a computer".

He adds that move would be operationally feasible as most of its passengers that hold confirmed tickets do not cancel and most of its flights operate with high load factors.

Another possibility is changing the diversion port for its Dhaka-Chittagong services from Yangon to Sylhet. Although that would require the airline to install its own refuelling equipment at Sylhet, the lower fuel uplift could save it $2.5 million per annum.

Steele acknowledges that the fine tuning measures he has identified are "not the main answer for Biman" and its history of financial troubles, "it is a good start".

State-owned Biman recorded a net loss of $27 million for the financial year ending 30 June 2011, and a loss of $11 million the year before that.

Biman operates a fleet of nine aircraft, including Boeing DC-10s, 737-800s and 777-300ERs. It also has eight aircraft on order, including four 787-8s.