Biman monopoly set to end as Caab plans second ground handler for 3rd terminal

Biman Bangladesh Airlines' sole grip on airport ground handling is set to end at Hazrat Shahjalal International Airport's Third Terminal, as the Civil Aviation Authority of Bangladesh announced plans to appoint a second operator, introducing competition to a sector long criticised for service inefficiencies.

Highlights: TBS

Caab Chairman Air Vice Marshal Md Mostafa Mahmood Siddiq announced the move today (27 April) while speaking at an interaction with members of the Aviation and Tourism Journalists Forum of Bangladesh (ATJFB).

"A second operator will be engaged alongside Biman at the third terminal, which will create a competitive environment in ground handling services," he said. 

He added that the Japanese consortium, led by Sumitomo Corporation, would have the prerogative to select the second ground handling operator in addition to Biman.

In October 2024, during the tenure of the interim government, Biman Bangladesh Airlines was assigned ground handling responsibilities at the newly built third terminal for an initial two-year period. 

The decision followed prolonged discussions under the previous administration, when the possibility of appointing a Japanese firm was considered due to concerns from foreign airlines over the national carrier's service quality.

The interim government, however, allowed Biman another opportunity to demonstrate its capability, albeit for a limited period and under strict performance conditions.

At present, Biman provides ground handling services for its own flights as well as all international airlines operating in Bangladesh, generating annual revenues of between Tk1,000 crore and Tk1,200 crore.

But, passengers and stakeholders have frequently criticised its services, particularly baggage handling, for delays and inefficiencies. The Dhaka airport authority, however, says baggage delivery times have improved significantly in recent years.

Deal with Japan 'to safeguard national interest'

The Caab chairman further said the agreement with the Japanese consortium to operate the third terminal would fully safeguard the country's interests.

"The agreement will be fair. We will ensure everything necessary to safeguard national interest. We have already held nine rounds of negotiations with them," he said, expressing confidence that Bangladesh's position will be preserved.

While both sides have reached consensus on several issues, some gaps remain. The chairman expressed hope that the agreement could be finalised within the next few months.

Bangladesh and Japan held a bilateral meeting on 3 April to discuss the operation and maintenance of the third terminal, though a final deal has yet to be reached.

Key issues under discussion include embarkation fees, upfront payments and revenue-sharing arrangements. State Minister M Rashiduzzaman Millat has urged the Japanese side to reconsider Bangladesh's position and submit a revised proposal.

The consortium includes Japan Airport Terminal Company, Sumitomo Corporation, Nippon Koei and Narita International Airport Corporation.

Terminal opening timeline

Despite being 98% complete in August 2024, the Third Terminal has remained non-operational for nearly 18 months beyond its original December 2024 launch target. The delay stems from ongoing disagreements between Caab and the Japanese consortium regarding management terms and revenue-sharing arrangements.

Regarding the new launch timeline, the Caab Chairman Mostafa said once negotiations conclude, signing the agreement would take at least three months. This would be followed by a test run lasting between six months and one year.

"We expect to partially open the third terminal about six months after the test run begins," he said.

The government has set 16 December as a target date, and work is progressing accordingly, he added.

Highlighting the risks of rapid airport transition, he said, "Studies by global experts show that around 74% of airport transitions fail. That's why we are proceeding cautiously to avoid any disruptions."

Equipment maintenance concerns

Questions have also been raised over the maintenance and lifespan of equipment installed at the third terminal due to its prolonged inactivity.

Addressing the issue, Mostafa said discussions had been held with contractor ADC, which had assured that regular maintenance was ongoing and could continue until December 2026. The company has also verbally committed to providing support until June 2027.

If the Japanese consortium takes over operations, ADC will work in coordination with them, he added.