Express (August 09, 2011)
Two Boeing aircraft will join the operational fleet of Biman Bangladesh Airlines Limited between October and November this year.
J.P. Morgan has provided US$277 million loan to Biman to facilitate the purchase of the new aircraft.
Biman had signed a deal as far back as in 2008 under the previous caretaker government with Boeing, a giant US-based aircraft manufacturer, for supply of a total of 10 aircraft.
The US-based J.P. Morgan Monday announced that it would provide the financing facility to the state-run Biman to support the airline's long-term, strategic expansion plan.
"We expect that the first aircraft will arrive in the country by October this year and another Boeing aircraft will add to our fleet by November 2011," a Biman senior official told the FE Monday.
The number of Biman's aircraft will rise to 13 from the existing 11 after the arrival of two new ones, he said, adding that the Biman has planned to expand its domestic and intentional services after receiving two aircraft.
"This is the first aircraft delivery arising from Biman's 2008 order placed with Boeing for 10 aircraft over the next decade," a J.P. Morgan announcement said.
Guaranteed by the Export-Import Bank of the United States, the 12-year loan facility will be repaid on a quarterly basis.
The J.P. Morgan has almost 50 years' experience in handling US Ex-Im Bank-guaranteed transactions, and is one of the world's largest providers of aircraft financing through US Ex-Im Bank, said the announcement, issued from Hong Kong.
Muhammad Zakiul Islam, Managing Director and Chief Executive Officer of Biman, said: "J.P. Morgan's proven track record in providing aircraft financing and their comprehensive end-to-end financing solution were key factors in our decision to partner with them. Throughout this process, their trade finance team consistently provided advice when we needed it and backed this up with an efficient and effective execution."
Sazzad Anam, Head of Financial Institutions, Bangladesh, J.P. Morgan Treasury Services, said: "Following the launch of our representative office in October last year, we have focused on providing our Bangladesh clients with even greater access to J.P. Morgan's comprehensive suite of global solutions. We look forward to strengthening our partnership with Biman as they continue to ramp up their expansion."
Adeline Kow, Head of Export Finance Advisory, Asia Pacific, J.P. Morgan Treasury Services, said: "As this dynamic region continues to grow and develop, we are seeing a surge in interest from clients across all sectors seeking structured trade finance solutions. Many companies, particularly those based in emerging and frontier markets, are aggressively expanding their business and seeking cost effective, large scale funding to facilitate their strategic growth plans."
Biman was founded in 1972 as a fully government-owned entity. It was converted into a public limited company during the tenure of the last caretaker government. But its equity holding is still wholly retained by the government. There has yet been no divestiture of its equity to the private sector.
Until now, Biman operates an international network spanning 19 destinations in Asia and Europe through its small fleet of 11 aircraft.
After witnessing some profits initially after its conversion into a public limited company, Biman went again into a red balance, its usual case throughout its long years of operations as a national airline.
Biman carried a total of 1.62 million passengers and 32,838 tonnes of cargo in fiscal 2010-11.
J.P. Morgan in its press release said, Biman Bangladesh Airlines Limited which is IOSA registered, is expected to witness "substantial growth in fleet size, passenger and cargo uplift and destinations," after "having placed the single largest order in its history of 10 Boeing Aircraft."
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