The liability to foreign loans of the national flag carrier, Biman Bangladesh Airlines (BBA), has swelled to about US$ 592 million (more or less Tk 46.77 billion) due to its poor operational performance, sources said.
The state-owned airlines owe the debt to a total of nine international financial institutions. The credit has been used mainly to purchase aircraft for the BBA, they added.
Every country buys aircraft through foreign debt. It is a general practice. The rate of interest of foreign loan is very low, A. S. M. Monjur Emam, controller of accounts of BBA, told the FE on Sunday.
The loan is shown in the BBA's balance-sheet as loan and asset. But there is no relation with the loss and profit of the airlines, he added.
The BBA has been paying back the loan by regular instalments, he said, adding that the loan was not a burden on the agency.
Outstanding long-term foreign loans stood at US$ 591.77 million as of June 2016, according to the latest data of BBA.
The Biman takes out loans from international lenders in two ways -- one is senior loan and other is junior loan, a senior official of the airlines said.
Usually, the rate of interest of senior loan is 0.24-0.35 per cent annually with 12 years' duration, he added.
On the other hand, the interest rate of junior loan is more than senior loan with five years' duration period, he also mentioned.
Biman has been facing problems due to different complexities especially employment scam, poor management and corruption, aviation experts said.
It cannot provide service as expected due to excessive expenditure in maintenance of age-old aircraft, use of aircraft on lease and no hike in airfare in a competitive market, they said.
Besides, the Biman stopped flying to New York in 1996 after the Federal Aviation Administration (FAA) slapped a ban on the airlines in the absence of 'Category 01' rating from the FAA, they said.
Biman owes a large amount of charges in the form of handling, landing and other charges to the Civil Aviation Authority, Bangladesh (CAAB). The BBA also owes a significant amount of money to the Bangladesh Petroleum Corporation (BPC), a CAAB high official said.
The airliner made profit in 2008 and in the first half of 2009, but after that it again plunged into losses, a source concerned said.
According to the balance sheet, Biman incurred Tk 5.94 billion, Tk 2.85 billion and Tk 2.85 billion as operating loss in fiscal years (FYs) 2011-2012, 2012-2013 and 2013-2014.
Biman earned profit over Tk 2.72 billion in FY 2014-15. But the account for the FY 2015-16 has not been prepared yet.
The amount of accumulated loss stood at Tk over 11.28 billion as of June 2015. The total liabilities also stand at over Tk 81.70 billion during the same period. The amount of long-term loan stood at over Tk 48.96 billion in June last, according to the Biman data.