Highlights:

• Biman aims to sign deal for 10 Airbus aircraft by 31 August
• Airbus deliveries expected to begin from 2031
• Biman to lease 10 aircraft until new jets arrive
• Govt approves move to acquire 10 Airbus planes
• Fleet expansion plan targets 43 aircraft with Boeing, Airbus orders
• Revised Airbus proposal includes four A350s, six A321neos
• Deal awaits final Biman board approval
• Airbus deal follows Biman's $3.7b Boeing order

State-owned Biman Bangladesh Airlines is set to sign another multibillion-dollar agreement with European aerospace giant Airbus by 31 August to purchase 10 aircraft, adding a second major order to its recent $3.7 billion deal with US manufacturer Boeing.

"The government has decided to proceed with the acquisition of 10 Airbus aircraft," State Minister for Civil Aviation and Tourism M Rashiduzzaman Millat told The Business Standard. "We hope to sign the agreement by 31 August."

"However, the Airbus aircraft will not be delivered immediately. Deliveries are expected to begin from 2031. Therefore, until the new aircraft arrive, we will have to strengthen the fleet by leasing aircraft," he added.

Millat said details of the procurement, including the price and other terms and conditions, would be disclosed after the agreement is finalised, adding that negotiations are going on.

Talks advance at Farnborough Airshow

The proposed deal gained momentum at the Farnborough International Airshow 2026 in the United Kingdom, where Airbus and Biman officials met yesterday to discuss the timeline for signing the agreement, according to Airbus sources.

"The meeting at the Farnborough Airshow discussed the progress of the proposed agreement and the next steps in the timeline," an Airbus spokesperson based in South Asia told TBS.

He said the national flag carrier had sent a letter to Airbus this week expressing its intention to sign the agreement by 31 August.

"This is the first time we have received a clear commitment from Biman," the spokesperson said.

Biman Managing Director and Chief Executive Officer Kaizer Sohel Ahmed, accompanied by four senior officials from flight operations, engineering and corporate planning, travelled to the UK on 19 July to attend the airshow.

Airbus Vice President Edward Delahaye also recently met Civil Aviation and Tourism Minister Afroza Khanam, State Minister Millat and senior Biman officials in Dhaka to advance discussions on the proposal.

Fleet expansion plans

The proposed purchase comes as the government reviews a long-term roadmap to expand Biman's fleet to 47 aircraft by the fiscal 2034-35 as part of efforts to modernise the flag carrier, strengthen international connectivity and establish Bangladesh as a regional passenger and cargo hub.

Biman currently operates 19 aircraft, 14 of which are manufactured by Boeing. With the addition of the Boeing and Airbus orders, the fleet would expand to 43 aircraft.

Because neither manufacturer is expected to deliver new aircraft before 2030, Biman plans to lease 10 aircraft by next year to address its fleet shortage.

Industry insiders said Bangladeshi airlines are expanding their fleets in anticipation of rising passenger demand and additional capacity following the expected opening of Hazrat Shahjalal International Airport's Third Terminal later this year.

Board approval still pending

Although the government has publicly expressed its interest in purchasing Airbus aircraft, the deal still requires internal corporate and government approvals, according to Airbus.

"Although Biman's Board had earlier given policy approval on certain aspects, the issue of the down payment has not yet been finalised. Therefore, the proposal will have to be placed before the Board again before the agreement can be signed," the Airbus spokesperson said.

He added that advance payments are standard international practice in aircraft procurement, with around 1% of the total contract value typically paid upfront, although the amount may vary depending on negotiations.

Biman acting spokesperson Md Mohiuddin confirmed that the government approval process is underway.

Asked about the price of the aircraft, the Airbus spokesperson said: "We cannot make the price public because of legal obligations. However, the customer may disclose it after the agreement is signed."

According to aviation news portal Simple Flying, Airbus's flagship A350-900 wide-body aircraft had a list price of $317.4 million in late 2023, while the larger A350-1000 was listed at $366.5 million. The A320ceo carried a list price of $101 million, while the A320neo was priced at $110.6 million.

Airbus revises proposal

According to Airbus and Biman sources, the European manufacturer has revised its proposal, reducing its earlier offer from 14 aircraft to 10 following Biman's agreement with Boeing in April.

The latest proposal, submitted to Biman's techno-finance committee, includes four A350-900 wide-body aircraft and six A321neo narrow-body jets.

The revised offer comes less than three months after Biman signed a $3.7 billion agreement with Boeing on 30 April to purchase 14 aircraft, including eight Boeing 787-10 Dreamliners, two Boeing 777-9 aircraft and four Boeing 737 MAX aircraft.

Airbus and Boeing have competed for a place in Biman's future fleet for several years, attracting considerable diplomatic and commercial interest from both the United States and Europe.

Debate over a mixed fleet

Former Civil Aviation Authority of Bangladesh chairman Air Vice Marshal (retd) M Mafidur Rahman said he supports a mixed fleet comprising both Boeing and Airbus aircraft.

According to Rahman, reliance on a single manufacturer exposes airlines to operational risks if one manufacturer's aircraft encounter technical or regulatory problems.

However, he cautioned that operating aircraft from two manufacturers would increase maintenance costs, training requirements and technical complexity.

"A mixed fleet certainly involves additional costs. But with proper planning, it also offers strategic advantages. The most important thing is that Biman prepares a comprehensive commercial and operational plan so that the government and the public clearly understand the benefits expected from this investment," he said.

Rahman added that Biman has significant opportunities to expand revenue and strengthen its international competitiveness, but that achieving those goals would require professional management, policy continuity and a long-term strategy.

Europe's long campaign

Industry insiders said Airbus scaled back its original proposal as part of a strategic effort to remain competitive in Bangladesh's long-term fleet expansion programme.

The company had earlier proposed supplying 14 aircraft, including 10 A350 wide-body jets and four A320neo narrow-body aircraft.

Diplomats from France, the United Kingdom and Germany have repeatedly encouraged Bangladesh to consider Airbus aircraft as part of a balanced procurement strategy.

Airbus's campaign gained momentum in 2023 following French President Emmanuel Macron's visit to Bangladesh and references in the Bangladesh-UK Joint Statement to the possible acquisition of 10 Airbus A350 aircraft, including freighters.

On 4 November last year, the ambassadors and high commissioners of France, Germany, the United Kingdom and the European Union publicly urged Biman to diversify its Boeing-heavy fleet, arguing that a more balanced mix would improve operational resilience and competitiveness.

According to people familiar with the matter, at least two high-level meetings involving European envoys and senior officials from Bangladesh's aviation sector were held this month to discuss the proposal.