Boeing, Airbus and Bangladesh’s ‘flying’ foreign policy

There are cheaper ways to make friends in Washington than buying aeroplanes. Unfortunately for Bangladesh, Donald Trump is not particularly interested in fruit baskets.

On Wednesday in New York, on the sidelines of the UN General Assembly, Biman Bangladesh Airlines signed a supplementary agreement with Boeing for another 11 aircraft order comprising five 787-10 Dreamliners and six 737-8s. 

That takes Biman’s Boeing order book this year to 25 aircraft. In April it ordered 14 — eight 787-10s, two 787-9s and four 737-8s — for $3.7 billion, with deliveries scheduled between November 2031 and October 2035. The price and delivery schedule of Wednesday’s additional order have not yet been disclosed.

For an airline currently operating only 19 aircraft, this is not fleet expansion so much as a declaration of intent. Biman is ordering more Boeings than it presently has aircraft. Naturally, people in Bangladesh have responded in the traditional manner to a large government purchase…by assuming somebody must have been cheated.

That suspicion is understandable. Aircraft procurement in Bangladesh has rarely been allowed the luxury of being merely about aircraft. Biman has been a flag carrier, employment scheme, diplomatic calling card and occasionally a flying extension of foreign policy. Its commercial interests have often had to squeeze themselves into whatever space politics leaves vacant.

The present Boeing order is no exception.

Its origins lie partly in the Agreement on Reciprocal Trade signed by Bangladesh and the United States on February 9, three days before the election and during the dying hours of Muhammad Yunus’s interim administration. 

Washington had originally threatened Bangladesh with a 37% additional tariff. Negotiations eventually produced a 19% rate, alongside preferential treatment for some Bangladeshi goods, including qualifying garments using American inputs. Bangladesh, in return, accepted extensive commitments on market access and imports.

Aircraft were among the conspicuous purchases. During the negotiations Dhaka signalled its intention to buy 25 Boeing jets, precisely the number now covered by the two agreements.

One of the central figures in those negotiations was Dr Khalilur Rahman, then the interim government’s national security adviser and high representative on Rohingya Affairs. He is now foreign minister in Tarique Rahman’s government. The administration changed but the bargain did not disappear. 

An imposing deal or what?

There was an awkward intermission though. On February 20, the US Supreme Court ruled that the International Emergency Economic Powers Act did not give the president authority to impose the sweeping tariffs Trump had used to construct his reciprocal-tariff regime. Suddenly the stick with which Washington had negotiated looked rather less sturdy.

Critics understandably asked why Bangladesh should remain bound by concessions negotiated under a tariff threat whose original legal foundation had collapsed. US officials subsequently maintained that the Bangladesh agreement remained in force and that Washington possessed other statutory routes for pursuing its trade policy. 

The Trump administration has indeed continued using other trade authorities, including Section 301.

The criticism of the agreement is not frivolous. The Centre for Policy Dialogue has called it highly discriminatory and urged its reconsideration. Its distinguished fellow Mustafizur Rahman has pointed out an asymmetry in the text: “Bangladesh shall” appears 131 times, against only six appearances of “US shall”. 

Bangladesh agreed to phase out duties on 7,132 US tariff lines, with 4,922 becoming duty-free immediately upon implementation. Critics have also questioned why an unelected interim administration signed such a far-reaching agreement immediately before an election.

Those are serious objections. But they should not be confused with the simpler proposition that buying Boeing aircraft is intrinsically foolish. It is not.

Biman already lives in a Boeing world. Fourteen of its 19 existing aircraft are Boeings: four 777s, four 787-8s, two 787-9s and four 737-800s. Its remaining five are Dash 8 turboprops. Pilots, engineers, spare-parts inventories, maintenance procedures and training systems have consequently developed around Boeing equipment. 

Information Adviser Zahed Ur Rahman made precisely this point this month that Bangladesh already possesses the supporting personnel and infrastructure for Boeing aircraft.

That matters. Airlines do not buy aeroplanes as Dhaka households buy electronics through Facebook ads. Introducing an entirely different manufacturer means new training regimes, engineering capabilities, spares and operational systems. Fleet commonality has a monetary value even if it produces an exceedingly dull press release.

Nor is Biman an airline without passengers.

In FY2024-25 it carried 3.383 million passengers to 30 domestic and international destinations. Revenue reached 11,559 crore taka, operational profit 1,602 crore taka and audited net profit 785.21 crore taka — up 178% year-on-year. It was Biman’s fifth consecutive profitable year and its ninth profitable year in the previous decade.

That does not make Biman Singapore Airlines. It does make the familiar description of it as an endlessly loss-making corpse somewhat out of date.

There is, admittedly, another ledger. Biman carries enormous disputed arrears to state entities. The Civil Aviation Authority says it is owed about 6,327 crore taka, much of it accumulated surcharges, VAT and tax, while roughly another 1,800 crore taka is owed to the state fuel system. Government guarantees already stand behind billions of taka of Biman borrowing.

A profitable income statement therefore does not magically turn Biman into a model of corporate health.

Still, the airline has an aircraft shortage. Its network is modest, its diaspora market enormous and foreign airlines capture much of Bangladesh’s international traffic. The 787 is hardly an exotic machine for Biman: it already operates six Dreamliners. The new 787-10s are intended for high-density routes, particularly the Middle East, while the 787-9s can support longer European and North American sectors. The 737-8s are designed for regional routes across India, Southeast Asia and the Gulf.

The more interesting question, then, is not why politics has entered Biman’s procurement. Politics never left.

The politics surrounding Biman

In 2023, Sheikh Hasina’s government moved towards buying 10 Airbus A350s after Emmanuel Macron visited Dhaka. Macron publicly thanked Hasina for her “commitment” to Airbus. The visit came at a diplomatically useful moment for a government facing growing Western criticism before the 2024 election. 

A European aircraft purchase consequently acquired significance far beyond fuel burn and seat configuration. So, Boeing diplomacy did not invent political aviation in Bangladesh. It merely changed the salesman.

Europe is now fighting back. French Ambassador Jean-Marc Séré-Charlet said this week that Airbus deserved a “fair and level playing field”, while insisting France was not asking Bangladesh to choose Europe over America. Airbus negotiations are continuing over four A350-900s and six A321neos. If both programmes proceed, Biman could eventually have 54 aircraft.

And here lies the real absurdity.

Bangladesh has managed to turn an airline with 19 aircraft into a ground for transatlantic industrial competition. Washington wants Boeing. Paris, Berlin, London and Brussels want Airbus. Biman, meanwhile, would presumably quite like some routes on which to fly all these planes.

Buying both manufacturers can diversify supply and reduce dependence on one company. It can also increase training, engineering and maintenance complexity. Biman meanwhile has not yet published the document that would settle much of the argument: a consolidated fleet and network plan explaining which aircraft will serve which routes, which existing aircraft will retire, what utilisation rates are expected and how the debt will be serviced.

That omission matters more than the nationality painted on the factory gate.

The Boeing purchase thus sits inside an uncomfortable reality of contemporary trade diplomacy. Trump’s Washington treats trade deficits as invoices waiting to be collected. Countries running surpluses with America are encouraged to arrive bearing LNG contracts, soybeans, weapons or aircraft. It is not the world trade system economists designed. It is, however, the one governments have to negotiate with.

Bangladesh therefore faces two separate questions that are too often bundled together.

The first is whether the US trade agreement imposes excessive obligations on Dhaka. Its critics have produced substantial evidence deserving scrutiny.

The second is whether Boeing aircraft make commercial sense for Biman. Existing fleet commonality, passenger growth, current profitability and genuine capacity shortages mean that question cannot sensibly be answered simply by shouting “Trump”.

Boeing may be part of the price of Bangladesh’s relationship with Washington. Airbus was once part of the price of cultivating Paris. That is what happens when a national airline doubles as a diplomatic gift shop.

The test however will come when the diplomats leave the room.

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Faisal Mahmud is the Managing Editor of Daily Waadaa