Biman cuts staff salaries amid mounting losses

These saving measures came in the aftermath of rising losses caused by the recent widespread flight suspensions amid the coronavirus pandemic.

The decision, made at a meeting of the company's executive directors on March 15, will come into effect from this month.

With this, Biman has become the first company in the public sector to curtail wages of its staff members in the wake of a severe financial crisis brought on by loss of passengers and cancellation of flights in both domestic and international routes amid the global outbreak of the coronavirus.

The national carrier has reduced its business activities cutting down flight operations on 15 out of 18 routes due to travel restrictions imposed by various countries to contain the coronavirus spread, said an official order issued by the company on Sunday.

The cuts to basic salaries and other facilities are imposed to tackle the current crisis, according to the order.

Biman is not alone in taking these cost-cutting measures to survive. Local private airlines have also plunged into severe financial crisis with the pandemic outbreak.

Regent Airways has suspended its full operation for three months recently due to financial hardships it is facing.

Biman projects a loss of Tk320 crore in the month of March alone, according to its Managing Director Md Mokabbir Hossain.

This huge loss is inevitable as there are no sales of tickets this month, rather the company has had to refund money to its customers due to flight cancellations, he explained. 

The carrier has been facing losses since January this year, Mokabbir said, adding that in the first two months of this year, it suffered a cumulative loss of around Tk150 crore.

He went on to say, the reduction in flight frequency and suspensions of flights have caused a 56 percent capacity loss to the carrier.

According to the new office order, the employees of the sixth grade and above, cockpit and cabin crew will see salary reduction from March.

Moreover, overtime for all employees of the airlines have been suspended from March and will continue until further notice. If any employee is put on overtime in any unavoidable circumstances, the allowance will be provided later which is subject to recovery from the current financial crisis, said the order.

Cabin crew will get overseas allowances based on real flying hour at $21.43 rate per hour.

All overtime allowances have been suspended for all cabin crew except those in London station, who will also be paid later, according to the circular.

Cabin crew will get 8 days off in a month and no compensation will be paid for the day off period.

Other extra allowances including entertainment, milk, food subsidy, fuel cost for personal vehicles have also been slashed.

Biman has 5,173 employees in total.

The corona pandemic has hit Biman hard at a time when it has been investing in fleet expansion and modernisation aiming to expand routes and increase operations.

Instead, putting its expansion plans on the back burner it has been forced to tighten its belt.

In March, Biman was scheduled to operate 914 international flights, of which it could run only 380 thus far, according to official data.

This month, Biman has cancelled 698 flights out of 1,654 in both international and domestic routes.

In the previous month, it was scheduled to operate 1,656 domestic and international flights, of which it could operate 1,542 flights.

Biman's fleet has increased manifold over the years, and the current fleet size is the largest in its history. Currently, the national carrier has 18 aircraft – 12 are its own and the rest are on lease.

Three more Dash-8 aircraft are scheduled to arrive by June this year, taking the total fleet size to 20.