BIMAN CRASH PROMPTS BDG APPROVAL OF NEW AIRCRAFT

UNCLAS DHAKA 003177 SIPDIS E.O. 12958: N/A TAGS: ETRD ECON PGOV BG SUBJECT: BIMAN CRASH PROMPTS BDG APPROVAL OF NEW AIRCRAFT PURCHASE REF: DHAKA 02988 ¶1. Summary: A Biman Bangladesh flight, inbound from Dubai carrying 215 passengers, crash landed and skidded off the runway in Chittagong on July 1. Mechanical and pilot error have been alleged as cause. No one was seriously injured but, according to Biman officials, the airplane is completely destroyed. The pilots have since been suspended from their jobs at Biman pending the conclusion of the investigation. Civil Aviation Minister Nasiruddin subsequently met with Finance Minister Saifur Rahman to discuss purchase of ten new planes. Rahman has reportedly signed off on the purchase of four airplanes - two each from Boeing and Airbus. End Summary. ¶2. The airplane bound for Dhaka experienced mechanical problems with its landing gear forcing a crash landing. The plane caught fire and the passengers had to be evacuated. Six passengers suffered minor injuries. A five-member inquiry committee headed by Biman's technical safety director is investigating the cause of the accident. Blood samples of the pilot to check for alcohol were collected and allegations persist regarding his lack of experience and drinking prior to taking off from Dubai. International flights from the Chittagong airport were suspended for the week but domestic flights resumed the next day. ¶3. Civil Aviation Minister Mir Muhammad Nasiruddin met with Finance Minister Saifur Rahman on July 6 to discuss purchase of new planes and stressed the immediate need for new aircraft following the accident. The Finance Minister officially agreed to the purchase of four aircraft initially and left the door open for further purchases. Rahman said Biman's operations have to be overhauled before more aircraft are purchased. ¶4. According to local media, he asked the Civil Aviation Ministry to submit a "cost-effective plan" outlining ways to streamline the national airline. He cited lack of funds as the primary reason for not approving the purchase of ten planes at this stage. Civil Aviation Minister Nasiruddin told local reporters that they have been offered short-haul Airbus aircraft for $90 million each and long-haul Boeing 777s for $129 million each. ¶5. Rahman told reporters that the decision to go with Airbus or Boeing will depend on price. The Civil Aviation Minister told the Ambassador at a late June meeting that the Cabinet-level Purchase Committee was reviewing the decision to purchase 10 new aircraft. (Reftel). The ultimate decision to purchase would be made by the Finance Minister and hinged on securing adequate financing. The Finance Minister told reporters that the BDG is prepared to provide sovereign guarantee for a maximum of $400 million to secure financing for the airplanes. This concession is definitely a big step in moving forward with the purchase of the new aircraft. CHAMMAS