Biman strikes landmark Boeing deal to buy 14 aircraft at $3.7b

Biman Bangladesh Airlines has signed a landmark agreement with US aviation giant Boeing to purchase 14 aircraft, marking the largest fleet expansion in the national carrier's modern history.

The agreement was signed at the Hotel InterContinental in Dhaka today (30 April), with Biman Managing Director and CEO Kaizer Sohail Ahmed and Boeing Vice Chairman Paul Righi signing on behalf of their respective organisations.

It marks the largest fleet expansion in the airline's modern history and is expected to increase Biman's fleet size from 19 to 33 aircraft within the next decade, according to Biman sources.

The proposed order, valued at approximately $3.7 billion at list prices, equivalent to more than Tk45,000 crore at the current exchange rate, includes a mix of wide-body Boeing 787 Dreamliners and narrow-body Boeing 737 MAX aircraft, aimed at strengthening both long-haul and regional operations.

Under the deal, Boeing will supply two 787-9 aircraft, eight 787-10s, and four 737-8s.

Speaking at the event, Paul Righi said, "With this agreement, Biman Bangladesh becomes one of the few carriers worldwide to fly the entire family of the 787 Dreamliner: the 787-8, the -9, and the -10. The -10 will bring unmatched efficiency and increased capacity to high-demand routes, including the Middle East, while the 787-9 will serve long-haul routes to Europe and also North America."

State Minister for Civil Aviation and Tourism M Rashiduzzaman Millat said the move aligns with Bangladesh's broader aviation ambitions. "Bangladesh is moving towards becoming a regional aviation hub. The new aircraft of Biman will help achieve that goal."

Biman Chairman Rumee A Hossain said, "The new aircraft will raise daily seat capacity to more than 5,000 and increase cargo handling capability."

US Ambassador Brent T Christensen said, "We're proud this purchase is being financed by the Export-Import Bank of the United States, with terms that will reduce the burden on Biman's cash flows that align with aircraft delivery schedules. The deal also exemplifies the win-win nature of the US-Bangladesh."

"Agreement on Reciprocal Trade, also called the ART. The ART allows us to create a modern, balanced trade and investment
partnership, including numerous provisions that will benefit both our countries. Not least of all, preserving Bangladesh's access to critical US markets, but also facilitating outstanding agreements like the one we're marking tonight," he added.

According to Biman officials, the government will provide a sovereign guarantee to facilitate the purchase

This is a continuation of Biman's long-standing partnership with Boeing. After becoming a public limited company in 2007, the airline signed a deal in 2008 to purchase 10 aircraft from Boeing, followed by the acquisition of two additional 787-9 Dreamliners.

The total cost of those 12 aircraft was around Tk19,020 crore.

The signing ceremony was attended by Civil Aviation and Tourism Minister Afroza Khanam as the chief guest and Foreign Minister Khalilur Rahman as the guest of honour. Among others present were Prime Minister's Foreign Affairs Adviser M Humayun Kabir, and senior officials from both Boeing and Biman.

Airbus lags behind in race

The latest agreement comes amid ongoing competition between Boeing and European manufacturer Airbus, which has sought to secure a share of Biman's fleet expansion plans over the past four years. While Airbus has yet to secure an order, company representatives told The Business Standard that discussions with Biman remain ongoing and their proposal has not been rejected.

Ambassadors from various European nations, including France, the UK and Germany, have long been pushing the Bangladesh government for fair and competitive business opportunities by the inclusion of Airbus into the Biman fleet.  

Airbus had gained traction in 2023 following high-level European engagement, including talks linked to the visit of French President Emmanuel Macron and references in a Bangladesh-UK joint statement to a potential purchase of 10 Airbus A350 aircraft, including freighters. 

European officials have argued that introducing Airbus aircraft would diversify Biman's fleet and strengthen economic ties with the European Union.

Boeing, however, has maintained its long-standing dominance by offering a range of aircraft options, including Dreamliners, freighters and narrow-body jets, alongside sustained engagement with policymakers in Dhaka. 

In August last year, during negotiations over reciprocal tariffs with the United States, the Bangladesh government committed to procuring 25 Boeing aircraft.

As delivery of the newly ordered aircraft will take several years, the government is pursuing interim measures to address immediate capacity constraints. "To ensure smooth operations during this period, we are planning to lease aircraft, preferably through dry leasing, for the next five years," State Minister Millat said recently.