Bangladeshi Prime Minister Sheikh Hasina has instructed that United Airways' debt to the Civil Aviation Authority of Bangladesh (CAAB) be scrapped to attract new investors keen on turning the stricken airline into a cargo carrier.
This is the word from Bangladesh Securities and Exchange Commission (BSEC) Chairman Shibli Rubayat-Ul-Islam, who told The Daily Star newspaper the prime minister had issued the instructions to the relevant ministries. This followed a plan by the BSEC to attract investors to turn the airline into a cargo-only carrier. "I told her that we want to revive the airline as a cargo operator as new clients have started contacting us in that regard. They will use the airline as a cargo carrier." The new investors planned to sell the company's old aircraft and purchase new cargo aircraft, he disclosed, "but we couldn't bring buyers as the airline owes several crores of taka to the CAAB in surcharges." The BSEC requested that the CAAB surcharges be waived while the unnamed investors would pay the airline's principal dues to the regulator.
According to the BSEC, the airline owes the CAAB around BDT568.7 million takas (USD5.3 million), plus value-added tax of BDT56.5 million (USD533,511), and income tax of BDT200,000 (USD1,887). A remaining BDT2.9 billion (USD27.7 million) was counted as a surcharge at an annual rate of 72%. The debt grows annually due to compounding surcharges. The BSEC said the airline could not pay the debt as it has no assets except for a few unusable aircraft.
United Airways Managing Director ATM Nazrul Islam welcomed the prime minister's decision to waive the CAAB surcharges. "It was the main obstacle behind reviving the airline as CAAB would get huge amounts of money from the airline in surcharges while the principal amount is around BDT600 million (USD5.6 million)," he explained.
As reported, United Airways ceased flight operations in 2016 due to rampant corruption and the misappropriation of funds by its former board of directors. The BSEC appointed a new board on February 28, 2021, tasked with overseeing the winding up of the business. In September, the BSEC appointed a task team to investigate issues surrounding the suspension of operations, reconstruction of the board, possible resumption of operations, and stock exchange trading patterns of United Airways securities. It also appointed a special auditor to probe United Airway's financial statements for fiscal years 2012 to 2021. The Finance Ministry earlier rejected an application by the airline to waive BDT4 billion taka (USD42.2 million) in debts.
