Application of Game Theory In Biman Bangladesh Airlines

Application of Game Theory In Biman Bangladesh Airlines

Submitted to,
XXX
Lecturer
Department of YYY
University of ZZZ

Submitted by,

Group “Oracles”
17th Batch
B section

Date of Submission:
19th March, 2012

Dated: 19th April, 201

XXX
Lecturer
Department of YYY
University of ZZZ

Subject: Solicitation for acceptance of the Report on “Application of Game theory in Biman Bangladesh Airlines”.

Dear Sir,
We are very much pleased to submit the report on “Application of Game theory in Biman Bangladesh Airlines” which provides us the opportunity of practicing our theoretical knowledge. Though it is our first such type of report but all the works presented here is done with utmost sincerely and honesty.

We have tried our best to make this report holistic and informative enough. Besides this, there may be shortcomings. We would be grateful if you consider those from excusable point.

Thanking you

Sincerely yours

The group “Oracles”
Batch-17th
Section: B

ACKNOWLEDGEMENT

For the completion of this we cannot deserve all praise. First of all we like to thank the Almighty Allah who gives us the opportunity to prepare this project successfully. We do believe that it is his blessings on us that we have completed this report in spite of some initial obstacles.

We are very thankful to our course instructor XXX. Under his caring guidance we found the completion of the task very easy for us. He gave us all kinds of guidelines related to the report. By following his instructions we have come to know the way of collecting data and whole procedure of preparing this report.

Executive Summary

Game theory is the mathematical analysis of a conflict of interest to find optimal choices that will lead to desired outcome under given conditions. game theory can be also used to simply study economics of the past and interactions of different factors in a matter. It can also be used to investigate matters such as monetary distributions and their effects on other outcomes.

Biman is the national flag carrier, which is fully owned and operated by the Government of Bangladesh. The corporate body of Biman, namely ‘Bangladesh Biman Corporation’, is doing business as Biman Bangladesh Airlines under the Ministry of Civil Aviation and Tourism. Biman was established as of a corporation on 27 October 1972 with a vision to protect Biman Bangladesh Airlines ltd. in the aviation market as a world-class airline.

Biman has experienced man power that it is really a good strength though the management of Biman cannot work independently because of government intervention. At the same time considering the global standard of International Airlines, Biman is lagging behind. The staffs are not provided with modern technologies like Computer, internet facilities etc. The labor passengers have an extreme attraction for the national flag carrier for its home like hospitality. The returning residents also prefer national carrier for home essence. But the free entry of mega carriers like Saudia, Gulf, Etihad etc. is creating threat for International market. Even domestic private airlines are chasing with the similar pace of Biman. Currently, Biman Bangladesh Airlines offers 16 Domestic and 102 International flights through its 13 local and 28 worldwide branch offices. A two-class service (J and Y) is operated on Biman's wide-body airliners and a single class service is available on the smaller aircraft. Biman also operates a cargo service using the cargo holds of its passenger aircraft to ship freight to international destinations. It has established Cargo Village at Shahjalal International Airport where the cargo is packaged and labeled before being loaded onto its aircraft. In addition to normal passenger the annual Islamic pilgrimage to Mecca for the Hajj is undertaken by thousands of Bangladesh’s predominantly Muslim population. Air fare pricing is a complicated job. Being the member of IATA airlines has to follow the IATA pricing rules. IATA Tariff Coordinating Conference is the egulatory body of the Air Tariff worldwide both Passenger fare and cargo rate. Biman is far away from modern promotional activities. It has been coming up with all traditional promotional activities such as Tourism Travel Fair, Special Offers, Sponsorship, Media Conference etc. Distribution of product in airline marketing refers to all aspects of link between the airline and the passengers. Because of recent development particularly in the area of electronic technology there are several approaches to reach it’s product to the clients. Bangladesh has an aviation market of about 3.5 million passengers in respect of passenger travel and about 10 million tons in respect of cargo .The market is expanding rapidly but due to the different cause Biman has lost its reputation and carrying less portion of the market. Biman Airlines is very much bureaucratic which makes delay in providing service to its customers. Nepotism is one of the barriers for not getting right resources. It is a good to mention that the management of Biman has realized the necessity of technological improvement for smooth operation although it’s too late. The Board is not accountable to a higher authority because the Minister of Aviation is the Chairman of the Board himself. Biman has suffered from being politicized in many aspects. Corruption in different sectors of Biman is another significant barrier that is making it difficult for the organization to break away from loss making ways. Again, delay in flight has been a common phenomenon for Biman. To help Biman move out from its old-fashioned way of management, to accommodate the future opportunities and to avert the current crisis and threats, it is extremely essential for Biman to undertake some immediate initiatives such as policy revise modernization, proper planning, experienced and professional manpower and take a mechanism to stop corruption. In this report, all aspects of 4 Ps of Biman Bangladesh Airlines including the problems that Biman is facing have been focused. Considering the present conditions, some suggestions have been made.

Contents 1.1. BACKGROUND OF THE STUDY: 2 1.2. RATIONAL OF THE STUDY: 2 1.3. OBJECTIVES: 2 1.4. METHODOLOGY: 3 1.5. LIMITATIONS OF THE STUDY: 3 2.1 Game theory 5 2.2 Basic Concepts of Game Theory 5 2.3 Applications of Game Theory 7 3.1 Biman Bangladesh Airlines 9 3.1.1 History 10 3.1.2 Management 11 3.1.3 Privatization 11 3.1.4 Services 11 3.1.5 Flight classes and amenities 11 3.1.6 Destinations 12 3.1.7 Current Fleet 12 3.2 Brief description of Competitors: 13 3.2.1 United Airways: 14 3.2.2 Qatar Airways Company Q.C.S.C.: 15 4.1 Planning: 18 4.2 Policy Level: 18 4.3 Human Resources: 19 4.4 Administration: 19 4.5 Modernization of Biman: 19 4.6 Flight Schedule Delay: 19 4.7 In-Flight Services: 19 Conclusion: 20 Bibliography: 21

1.1. BACKGROUND OF THE STUDY: 2 1.2. RATIONAL OF THE STUDY: 2 1.3. OBJECTIVES: 2 1.4. METHODOLOGY: 3 1.5. LIMITATIONS OF THE STUDY: 3

1.1. BACKGROUND OF THE STUDY:

The course “Business mathematics-II” in BBA course of the Faculty of Business Studies, University of ZZZ, provides basic knowledge about mathematics frequently used in the world of business. The honorable course teacher XXX wants us to apply analytical knowledge in practice. So we were assigned to prepare this report on the application of game theory in a particular industry. With is help we selected the topic regarding “Application of Game theory in Biman Bangladesh Airlines”.

1.2. RATIONAL OF THE STUDY:

There is a far gap between theoretical knowledge and practical field. So, only theoretical knowledge is not enough for a business student. This assignment has been mainly launched to bridge this gap. Biman Bangladesh Airlines, operating under the ministry of civil aviation, seems to be a losing concern in spite of operating in a highly growing market. The topic, that we selected, is very important regarding this objective. So we believe that our study will help readers to understand the Human facts that need to be solved in Biman & to keep pace with the fast growing competitors

1.3. OBJECTIVES:

* To understand the strategy of Biman Bangladesh Airlines * To compare the strategy with the competitors * To apply game theory as a corrective measurement

1.4. METHODOLOGY:

This is a descriptive type of research that has undertaken insights and understanding the application of game theory in Biman Bangladesh Airlines. In order to conduct the report, we have decided to collect various types of primary and secondary data.

Primary Sources:
Unfortunately we were unable to collect any data from any primary source due to not having the opportunity of visiting any related organization

Secondary Source: * Website of Biman Bangladesh Airlines * Website of competitor airlines * Articles published on Biman Bangladesh Airlines * Research works conducted about aviation industry in Bangladesh

1.5. LIMITATIONS OF THE STUDY:

In conducting this study WE faced to the following limitations. 1. Did not have the opportunity to visit Biman Bangladesh Airlines and collect data from primary source 2. Sufficient books, publications & journals were not available. 3. Lack of availability of information and data. 4. Up-to-date information were not available 5. For the reason of confidentiality, some useful information cannot be expressed in this report. 6. Finally, this is our first report on application of game theory which is quite new. So our knowledge especially in such a research study is limited

2.1 Game theory 5 2.2 Basic Concepts of Game Theory 6 2.3 Applications of Game Theory 7

2.1 Game theory

Game theory is the mathematical analysis of a conflict of interest to find optimal choices that will lead to desired outcome under given conditions. To put it simply, it's a study of ways to win in a situation given the conditions of the situation. While seemingly trivial in name, it is actually becoming a field of major interest in fields like economics, sociology, and political and military sciences, where game theory can be used to predict more important trends.

It may at first seem arcane to involve mathematics in something that seems purely based on skill and chance, but game theory is in actuality a complex part of many branches of mathematics including set theory, probability and statistics, and plain algebra. This results from the fact that games are dictated by a given set of rules that can be used to outline a set of possible moves which can be ranked by desirability and effectiveness, and with information available, such a set can also be constructed for the opponent, thus allowing predictions about the possible outcomes within a certain number of moves with a probabilistic accuracy.

2.2 Basic Concepts of Game Theory

Game
A conflict in interest among n individuals or groups (players). There exists a set of rules that define the terms of exchange of information and pieces, the conditions under which the game begins, and the possible legal exchanges in particular conditions. The entirety of the game is defined by all the moves to that point, leading to an outcome.

Move
The way in which the game progresses between states through exchange of information and pieces. Moves are defined by the rules of the game and can be made in either alternating fashion, occur simultaneously for all players, or continuously for a single player until he reaches certain state or decline to move further. Moves may be choice or by chance. For example, choosing a card from a deck or rolling a die is a chance move with known probabilities. On the other hand, asking for cards in blackjack is a choice move.

Information
A state of perfect information is when all moves are known to all players in a game. Games without chance elements like chess are games of perfect information, while games with chance involved like blackjack are games of imperfect information.

Strategy
A strategy is the set of best choices for a player for an entire game. It is an overlying plan that cannot be upset by occurrences in the game itself.
Payoff
The payoff or outcome is the state of the game at its conclusion. In games such as chess, payoff is defined as win or a loss. In other situations the payoff may be material (i.e. money) or a ranking as in a game with many players.

Extensive and Normal Form
Games can be characterized as extensive or normal. A in extensive form game is characterized by a rules that dictate all possible moves in a state. It may indicate which player can move at which times, the payoffs of each chance determination, and the conditions of the final payoffs of the game to each player. Each player can be said to have a set of preferred moves based on eventual goals and the attempt to gain a maximum payoff, and the extensive form of a game lists all such preference patterns for all players. Games involving some level of determination are examples of extensive form games.

The normal form of a game is a game where computations can be carried out completely. This stems from the fact that even the simplest extensive form game has an enormous number of strategies, making preference lists are difficult to compute. More complicated games such as chess have more possible strategies that there are molecules in the universe. A normal form game already has a complete list of all possible combinations of strategies and payoffs, thus removing the element of player choices. In short, in a normal form game, the best move is always known.

2.3 Applications of Game Theory
Though at first glance the idea of game theory sounds trivial, applications of game theory are extensive. Von Neumann and Morgenstern originally applied their models of games to economic analysis. Each factor in the market, such as seasonal preferences, buyer choice, changes in supply and material costs, and other such market factors can be used to describe strategies to maximize the outcome and thus the profit. However, game theory can be also used to simply study economics of the past and interactions of different factors in a matter. It can also be used to investigate matters such as monetary distributions and their effects on other outcomes.

The properties of n-person non-zero-sum games can be used to study different aspects of social sciences as well. Matters such as distribution of power, interactions between nations, the distribution of classes and their effects of government, and many other matters can be easily investigated by breaking the problem down into smaller games, each of whose outcomes affect the final result of a larger game.

3.1 Biman Bangladesh Airlines 9 3.1.1 History 10 3.1.2 Management 11 3.1.3 Privatization 11 3.1.4 Services 11 3.1.5 Flight classes and amenities 11 3.1.6 Destinations 12 3.1.7 Current 12 3.2 Brief description of Competitors: 13 3.2.1 United Airways: 13 3.2.2 Qatar Airways Company Q.C.S.C.: 15

3.1 Biman Bangladesh Airlines

Founded | January 4, 1972 (40 years ago) | Commenced operations | February 4, 1972 | Hubs | * Shahjalal International Airport | Secondary hubs | * Shah Amanat International Airport * Osmani International Airport | Subsidiaries | * Biman Flight Catering Centre * Biman Poultry Complex * Biman Airlines Training Center | Fleet size | 16 (+ 10 orders) | Destinations | 24 | Company slogan | Wings of your freedom | Headquarters | Dhaka, Bangladesh | Website | www.biman-airlines.com |

Biman Bangladesh Airlines is the flag carrier airline of Bangladesh. Its main hub is at Shahjalal International Airport in Dhaka, and also operates flights from Shah Amanat International Airport in Chittagong, earning revenue from the connecting service to Osmani International Airport in Sylhet. Biman's operations are assigned the IATA airline code BG and the ICAO airline code BBC, while its call sign is BANGLADESH. The carrier provides international passenger and cargo service to Asia and Europe, as well as major domestic routes. It has air service agreements with 42 countries, but flies to only 16. The airline was wholly owned and managed by the government of Bangladesh until 23 July 2007, when it was transformed into the country's largest public limited company by the Caretaker Government of Bangladesh.[4] The airline's headquarters, Balaka Bhaban, is located in Kurmitola, Dhaka.
Created in February 1972, Biman enjoyed an internal monopoly in the Bangladesh aviation industry until 1996. In the decades following its founding, the airline expanded its fleet and destinations, but it was adversely affected by corruption and mishaps. At its peak, Biman operated flights to 29 international destinations as far away as New York City to the west and Tokyo to the east. The airline has suffered heavy financial losses, and has a reputation for poor service because of regular flight cancellations and delays caused by its ageing fleet. For safety reasons, some of Biman's long-haul aircraft have been banned in the United States and the European Union. Annual Hajj flights, transporting non-resident Bangladeshi workers and migrants, and the activities of its subsidiaries, form an important part of the carrier's business. Rising oil prices have created additional pressure on the airline's finances, which is widely reported to have failed to meet its payment obligations to the state-owned petroleum corporation, BPC. Under Skytrax's five-star rating systems, Biman merits two stars. The carrier is currently facing competition from a number of local private airlines as well as some international carriers, which offer greater reliability and service standards, targeting the country's air transport sector which is experiencing an 8% annual growth rate, owing to a large number of non-resident Bangladeshis.
Since becoming a public limited company, the airline has reduced staff and begun to modernize its fleet. Biman has made a deal with Boeing for 10 new aircraft, along with options for 10 more. The carrier is in the process of leasing some aircraft in the interim to restart flights to some of its previous destinations in Asia, Europe, and North America. * |
3.1.1 History
Biman Bangladesh Airlines was established on 4 January 1972 as Bangladesh's national airline under the Bangladesh Biman Ordinance (Presidential Order No. 126). The initiative to launch the flag carrier was taken by 2,500 former employees, including ten Boeing 707 commanders and seven other pilots of Pakistan International Airlines, who submitted a proposal to the government on 31 December 1971 following the independence of Bangladesh. The airline was initially called Air Bangladesh International but was soon changed to its current name.
On 4 February 1972, Biman started its domestic service on the Dhaka–Chittagong, Dhaka–Jessore and Dhaka–Sylhet routes with a World War II vintage Douglas Dakota and Douglas DC-3, both gifts from the Bangladesh Air Force. On 4 March 1972, Biman started its international operations with a weekly flight to London using a Boeing 707 chartered from British Caledonian. In 1977, Biman was converted into a public sector corporation to be governed by a board of directors appointed by the government
3.1.2 Management
The airline was wholly owned by the Bangladeshi government through the Bangladesh Biman Corporation since its inception. In 1977, Biman was converted into a public sector corporation which afforded Biman limited autonomy, led by a government-appointed board of directors. The authorized share capital was increased to BDT 2 billion in 1987, and Biman was transformed into a public limited company, the largest in Bangladesh, in 2007.
3.1.3 Privatization
Faced with growing losses from the late 1990s onwards, the government offered 40 percent of Biman to foreign airlines in 2004, hoping a buyer would take over the management of the carrier. However, the proposal demanded that many decision-making rights remain within the Bangladesh government, and the offer was ignored by outside airlines. A similar initiative in 1998 cost Biman $1.6 million in consultancy fees with no positive results.
In May 2007, the caretaker government approved plans to turn Biman into a public limited company with shareholdings split between seven public sector organizations. On 23 July 2007, Biman Bangladesh Airlines became the largest public limited company in Bangladesh
3.1.4 Services
Biman is notable for disruptions to its flight schedule and poor customer service. In 2007, Biman faced strong criticism from major international airports including London Heathrow Airport and Dubai International Airport for its failure to maintain flight schedules. In a 10 September 2008 article published in The Times, Biman was labeled the worst performer for punctuality at Heathrow, with flights delayed on average by three hours.
3.1.5 Flight classes and amenities

A two-class service (J and Y) is operated on Biman's wide-body airliners and a single class service is available on the smaller aircraft. The Maslin Executive Class cabin on its Airbus A310s is set up in a 2–3–2 configuration while the setup on the Douglas DC-10-30s is a more spacious 2–2–2 configuration. The economy class cabins are set up in a typical 2–5–2 configuration.
In-flight entertainment aboard Biman aircraft is rated "very poor" by Skytrax. Biman's service as a whole is reflected in its two-star ranking (out of five), which indicative of the poor standard of service is provided by the airline that falls below the industry average. The Douglas DC-10-30s are equipped with a projector in each cabin, while the Airbus A310s have monitors that drop down from the ceiling below the luggage racks in the center of the aircraft. While other airlines using modern aircraft are able to provide more personal in-flight experiences via seatback LCD screens, Biman's ageing fleet has maintained the standard equipment available when the planes were manufactured
3.1.6 Destinations
Biman has air service agreements with 43 countries, but only operates its routes to 16, leaving room for expansion for which it lacks aircraft. The airline operates flights to several destinations in the Middle East, some destinations in South and South East Asia and four destinations in Europe (London, Manchester, Milan and Rome). Foreign airlines are encroaching on Biman's routes, particularly the lucrative London–Dhaka route, on which traditionally only Biman and British Airways (before it cancelled this route in 2009) have operated direct flights. In 2005, Air India commenced a route which permitted flights between London and Dhaka without requiring a transit flight which has occupied the space freed up by Biman when it reduced London–Dhaka flights. New airlines are also hoping to cash in on Biman's shortfall: United Airways and the now defunct Royal Bengal Airlines are two such airlines launched by expatriate British–Bangladeshis with an aim to provide direct flights between London and Sylhet.

3.1.7 Current Fleet
As of January 2012, the Biman Bangladesh Airlines fleet includes the following aircraft, with an average age of 20.3 years: Biman Bangladesh Airlines Fleet | Aircraft | In service | Orders | Options | Passengers | Notes | | | | | J | Y | Total | | Airbus A310-300 | 3 | — | — | 25 | 196 | 221 | | | | | | 25 | 198 | 223 | | | | | | 26 | 197 | 223 | | Boeing 737-800 | 2 | 4 | 2 | 12 | 150 | 162 | New aircraft to be delivered in 2015 | Boeing 747-400 | 1 | — | — | — | 505 | 505 | Leased from Air Atlanta Icelandic | Boeing 777-300ER | 2 | 2 | 4 | 35 | 394 | 419 | | Boeing 787-8 | — | 4 | 4 | TBA | Entry into service: 2016-2020 | Fokker F28-4000 | 4 | — | — | — | 80 | 80 | Two aircraft stored | McDonnell Douglas DC-10-30 | 1 | — | — | 25 | 228 | 243 | Replacement aircraft: Boeing 777-300ER | | 3 | | | — | 314 | 314 | | Total | 16 | 10 | 10 | |

3.2 Brief description of Competitors:
Biman Bangladesh Airlines have several competitors in both domestic & international market. The list of their competitors is shown below: Airline | Competitors | Notes | United Airways Bangladesh | Strong | 18 shared routes (26%) | Qatar Airways | weak | 22 shared destinations (31%) | GMG Airlines | weak | 8 shared routes (11%) | Regent Airways | weak | 6 shared routes (9%) | Saudi Arabian Airlines | weak | 6 shared routes (9%) | Flydubai | weak | 4 shared routes (6%) | Jet Airways | weak | 4 shared routes (6%) | Dragonair | weak | 4 shared routes (6%) | Emirates | weak | 4 shared routes (6%) |
*Source: http://www.whichairline.com/airlines/biman-bangladesh-airlines

Now we are going to give a brief description of the 2 major competitors:

3.2.1 United Airways:
United Airways is a Bangladeshi airline headquartered in Uttara, Dhaka. It was founded in 2005 and began flights on 10 July 2007 with its first aircraft, a Dash 8-100, purchased from Island Air. The airline's first jet aircraft was a McDonnell Douglas MD-83. The airline received its first wide-body aircraft, an Airbus A310-300, in late 2010, and the second in 2011. United Airways (BD) Limited aims to develop the airline in a way which every Bangladeshi can feel proud of being associated with. Investor is not only a part of this profitable venture but is also a part of investing for the economic growth of Bangladesh itself. The development of this new airline will help move Bangladesh further into 21st century.
The allocation of more slots for the private airlines was due to a change in the government policy, as it seeks to inject competition in the aviation industry. The government is now very liberal. Government encouraging the private sector to have its share of the growing market and local airline must be ready to face competition and should improve their service quality.

Bangladesh’s air traffic grew 7.3 per cent on 2008, making it one of the fastest – growing aviation markets in the region, but decades of poor performance by the other airlines has enabled foreign carriers to snatch almost 80 per cent of the market. Government decision proves that it wants a level playing field in the aviation industry. UK and Gulf is the most important market for Bangladeshi airlines as one in two people who fly abroad goes to the six Gulf countries and UK, which employ more than 70 percent of the county’s over five million migrant workers. United Airways (BD) Ltd. comprises a team of dynamic talented Bangladeshis who are fully committed to make this vision successful. Involvement in this airline is an opportunity to be a part of a unique venture that will have a significant impact on national economy. United Airways is truly 'your airline‘…. hence “fly your own airline”.

Fleet:

The United Airways fleet consists of the following aircraft (as of 7 April 2012):

United Airways Fleet | Aircraft | In Fleet | Orders | Airbus A310-300 | 2 | 0 | ATR 72-500 | 3 | 0 | Bombardier Dash 8 100 | 3 | 0 | McDonnell Douglas MD-83 | 3 | 0 | Total | 11 | 0 |

3.2.2 Qatar Airways Company Q.C.S.C.:
Operating as Qatar Airways is the state-owned flag carrier of Qatar. Headquartered in the Qatar Airways Tower in Doha, it operates a hub-and-spoke network, linking over 100 international destinations from its base in Doha, using a fleet of over 100 aircraft.
Qatar Airways operates services across Africa, Central Asia, Europe, Far East, South Asia, Middle East, North America, South America and Oceania, and was named Airline of the Year 2011 at the Skytrax World Airline Awards. The airline employs more than 20,000 people. 14,000 employees work for the airline directly while the other 6,000 works in the airline's subsidiaries.
In a relatively short time, Qatar Airways has grown to over 100 destinations worldwide, offering unmatched levels of service excellence that have helped excel the award-winning carrier to become best in the world. Voted Airline of the Year 2011 in the prestigious Skytrax industry audit, Qatar Airways has won the confidence of the travelling public.
Travel by air has reached the point where it is now taken for granted in most corners of the globe. With a larger number of passengers and more choice available in the skies today, airlines looking to maintain or grow their position in the marketplace must provide high-quality service with ever-increasing efficiency.
In this highly competitive environment, Qatar Airways has achieved much with our phenomenal route expansion averaging 30% growth year to year and flying one of the most modern fleets of aircraft in the skies today. Along the way, Qatar Airways has garnered many awards and accolades since our relaunch in 1997, becoming one of an elite group of airlines worldwide to have been awarded a 5-Star rating by Skytrax. Part of this excellence is offering you a 5-Star experience online at the newly relaunched qatarairways.com which provides a great travel shopping experience.
The new site also features the highest levels of price transparency, a new flight deals section, and an easier navigation tool to find the information you are looking for. Whether you're just beginning to plan your trip online or collecting your baggage after your return journey, you can expect a 5-Star experience all the way with Qatar Airways.
Qatar Airways is one of the fastest growing airlines in the world, flying to over 100 leisure and business destinations across six different continents. Currently operating 11 flights per week from Bangladesh to our hub in Doha, Qatar Airways offers easy and convenient connections to over 100 destinations.

As of March 2012, the Qatar Airways fleet consists of the following aircraft: with a (4.1) year (excluding Qatar Executive): Qatar Airways Fleet | Aircraft | In Fleet | Orders | Options | Passengers | Notes | | | | | F | J | Y | Total | | Airbus A319-100LR | 2 | — | — | — | 8 | 102 | 110 | Widescreen AVOD | Airbus A320-200 | 27 | 6 | — | — | 12 | 132 | 144 | Widescreen AVOD/ Main screen | Airbus A321-200 | 12 | — | — | — | 12 | 165 | 177 | Widescreen AVOD / Main screen | Airbus A330-200 | 16 | — | — | 12 | 24 | 192 | 228 | PTV AVOD | | | | | 8 | 24 | 200 | 232 | | | | | | — | 24 | 236 | 260 | | | | | | — | 24 | 248 | 272 | | Airbus A330-300 | 13 | — | — | 12 | 24 | 223 | 249 | PTV AVOD | | | | | — | 30 | 275 | 305 | | Airbus A340-600 | 4 | — | — | 8 | 42 | 256 | 306 | PTV AVOD | Airbus A380-800 | — | 10 | 3 | 517 (TBA) | EIS 2013 | Boeing 777-200LR | 9 | — | — | — | 42 | 217 | 259 | Widescreen AVOD | Boeing 777-300ER | 17 | 8 | — | — | 42 | 293 | 335 | Widescreen AVOD | Boeing 787-8 | — | 30 | 30 | — | 22 | 232 | 254 | EIS June 2012 |

4.1 Planning: 18 4.2 Policy Level: 18 4.3 Human Resources: 19 4.4 Administration: 19 4.5 Modernization of Biman: 19 4.6 Flight Schedule Delay: 19 4.7 In-Flight Services: 19

To help Biman move out from its old-fashioned way of management, to accommodate the future opportunities and to avert the current crisis and threats, it is extremely essential for
Biman to apply game theory in the following steps set forth as recommendations.

4.1 Planning:

Biman suffering a huge amount of system loss due to unorganized fleet renewal plan. Pilots are being trained though specific aircrafts will not be available. So a phased fleet renewal plan is mandatory. Biman should develop and adopt a coping strategy addressing the market need. In this fast changing world, outdated strategy is one of the main factors behind Biman’s failure.
Leasing will reduce immediate capital requirements and will allow Biman to have flexibility in capacity which means that the airlines can scale-up or scale-down available seat capacity according to the market trend. Biman should consider closing down the loss-making routes and divert the flights entirely to the profit-making ones. Biman must discontinue operation of short sector flights by wide-bodied aircrafts. Biman must operate with similar types of aircraft to reduce operating cost.

4.2 Policy Level:

Biman should have a clear vision and mission statement. The dilemmas in the governance system of Biman need to be settled down through bringing in necessary changes in the Ordinance. To ensure accountability, the Board of Directors needs to be reformed. The Minister for Civil Aviation should not be the Chairman of the Board of Directors. The responsibilities of the members of the Board should be specified. Experts on commercial airline and aviation industry must be included as members in the Board of Directors. Biman should abide by the current business methodologies as used in world-class airlines to make it successful and profitable. The Annual Report should be made public. This report must include financial statements. Biman should not be exploited in the name of national interest. It should not operate unprofitable flights. Biman’s existing procurement rules should be appropriately amended so that Biman can take its own business decisions. Biman should operate by Biman people without any interference from the Ministry.

4.3 Human Resources:
Biman should recruit staff with required qualification directly at officer level. Analyzing current staff size and performing cost effective analysis, Biman should cut down its staff. Recruitment, transfer, and promotion on political consideration must be stopped. 4.4 Administration:
Consultants should be hired with regard to finance and store and purchase. Biman needs to purchase new generation aircraft to save operation cost significantly. Leasing and purchase process of aircraft should be made transparent. During procurement of spare parts, technical experts must be included in the process. Punitive actions against corrupt staff of the in and out station of Biman must be taken.

4.5 Modernization of Biman: Modern cost effective inventory control system should be introduced. Biman needs to keep its website continuously updated so that the clients can get the latest and complete information from the website. Biman must go all out to introduce e-ticketing, e-reservation, and procurement of spare parts. 4.6 Flight Schedule Delay: Delay analysis should be undertaken as a routine process and necessary steps should be taken to maintain the schedule in a tolerable delay range. 4.7 In-Flight Services: In-flight service must be improved. Steps may be undertaken to ensure full complement of cabin crew, professionalism among the cabin crew, and provision of proper flight crew training to ensure that quality service can be rendered by the cabin crew at all times

Conclusion:

In the last but not the least, it can be mentioned that the improvement of the can be possible if the above mentioned tasks or initiatives can be taken. Under the leadership of CEO and MD, Biman has engendered a restructuring program aimed at bringing the airline back to profitability. A detailed review the BASAs would be warranted to identity market segments which would be advantageous to Biman. The experienced and dedicated manpower of Biman along the proper application of game theory directed by management can lead Biman to be the market leader in South Asian Regions.

Bibliography:

1. http://biman-airlines.com/
2. http://en.wikipedia.org/wiki/Biman_Bangladesh_Airlines
3. http://en.wikipedia.org/wiki/Game_theory
4. Boeing online tnformation-www.boeing.com
5. http://www.centreforaviation.com/analysis/competition-ramps-up-in-bangladesh-as-kingfisher-flies-in-7571
6. http://www.whichairline.com/airlines/biman-bangladesh-airlines
7. http://www.ti-bangladesh.org/research/EX_Summary_Biman_Eng.pdf