Biman's passenger handling monopoly to go as global giants vie for 3rd terminal
Under the plan, airlines operating from the new terminal will be able to choose between Biman and another operator for passenger-related ground handling services
Highlights:
- Bangladesh removes foreign ownership cap on private ICDs and off-docks
- Foreign investors can fully own logistics facilities from July 1
- Previous rules required foreign firms partnering with majority local stakeholders
- Government expects stronger investment, exports, and cargo capacity growth
- Infrastructure and operational bottlenecks may still discourage foreign investors
- Foreign operators could bring technology, skills, and efficiency improvements
The Civil Aviation Authority of Bangladesh (CAAB) has decided to appoint a second ground handling operator alongside Biman Bangladesh Airlines for passenger services at Hazrat Shahjalal International Airport's third terminal, marking a significant shift towards competition in one of the country's most lucrative aviation businesses.
Under the plan, airlines operating from the new terminal will be able to choose between Biman and another operator for passenger-related ground handling services. Cargo handling, however, will remain exclusively under Biman's control.
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The decision emerged from high-level discussions held on 3-4 June between CAAB and the Japanese consortium that is set to take over overall operations of the third terminal, according to officials familiar with the matter.
"A second ground handling operator will be appointed for passenger-related services. Cargo handling at the new terminal will remain exclusively under Biman's control," CAAB Chairman Air Vice Marshal Md Mostafa Mahmood Siddiq told The Business Standard.
The move marks a departure from earlier expectations that a second operator would be appointed for both passenger and cargo services at the terminal. Biman has long faced criticism from foreign airlines over the quality and efficiency of its ground handling operations.
Several international ground handling companies have already expressed interest in entering the Bangladeshi market, including UK-based Menzies Aviation, Turkey's Çelebi Aviation, UAE-based dnata, and Switzerland's Swissport.
Diplomats and company representatives have intensified lobbying efforts in recent months. Ambassadors from the respective countries have held meetings with Civil Aviation and Tourism Minister Afroza Khanam and State Minister M Rashiduzzaman Millat to advocate for their companies. Earlier this month, the aviation minister also visited London to observe Menzies Aviation's operations at Heathrow Airport.
Japanese consortium to prepare shortlist
CAAB sources said the Japanese consortium will shortlist potential second ground handlers, with Bangladesh making the final selection.
A senior CAAB official, speaking on condition of anonymity, told TBS, "There is no scope for more than one cargo handler under the agreement with the Japanese consortium."
Most countries operate multiple ground handling agents, creating competition, improving service, allowing airlines to choose providers, and benefiting passengers.
The official said a second cargo handler could be considered in future if the existing cargo terminal is expanded and modernised.
"The Japanese side will provide a shortlist of potential operators. The relevant authorities will then assess their qualifications, licences, equipment and technical capabilities before granting final approval," the official added.
National security, standard of operations to be reviewed
The third terminal has remained idle for nearly 18 months due to disagreements over management and revenue-sharing between CAAB and the Japanese consortium – comprising Japan Airport Terminal Company, Sumitomo Corporation, Nippon Koei, and Narita International Airport Corporation.
The issues were resolved following a series of negotiations after the BNP-led government took office.
A source familiar with the consortium said, "From the list of possible ground handlers, CAAB will mainly examine two issues: whether the company is acceptable from a national security and sovereignty perspective, and the quality and standard of its operations."
State Minister Millat said earlier this month that the agreement with the Japanese consortium is expected to be signed by 19 July this year, with the terminal likely to become operational by 16 December or early 2027.
Biman's lucrative business faces competition
Ground handling is broadly divided into passenger and cargo services. Passenger handling includes boarding, baggage and aircraft support operations.
Dhaka airport Executive Director Group Captain Ragib Samad told TBS that about 75% of workload is passenger-related, with the remaining 25% cargo.
Ground handling is one of Biman's most lucrative segments, generating Tk1,000-1,200 crore annually. Airlines pay Biman $2,200-6,000 per flight, plus $0.07 per kg for cargo.
Despite this, Biman has faced persistent criticism over service quality, with foreign airlines long calling for a second ground handler to improve standards.
The Airlines Operators Committee, representing 38 foreign airlines, formally raised the demand on 2 December 2024 during a Dhaka event.
The move is now partially being addressed, with Biman retaining exclusive cargo handling while airlines can choose operators for passenger services.
Why are foreign firms so eager
Dhaka airport currently has the capacity to handle around 8 million passengers and 250,000 tonnes of cargo annually.
The third terminal, spanning 542,000 square metres, is designed to add capacity for 12-16 million passengers and nearly 500,000 tonnes of cargo a year.
With passenger numbers rising, industry insiders say the ground handling business has become increasingly attractive to international operators.
Dhaka airport handled 12.72 million passengers in 2025, up from 12.5 million in 2024 and 11.7 million in 2023, according to airport data. Of the total, 10.312 million were international passengers and 2.411 million domestic.
Former Biman board member Kazi Wahidul Alam said IATA projects Dhaka's passenger traffic could nearly double to 25 million within a decade.
"Most countries operate multiple ground handling agents, creating competition, improving service and allowing airlines to choose providers. Passengers also benefit," he told TBS.
On selecting a foreign ground handler, Wahidul said merit and operational capability should outweigh political considerations.
He added that after shortlisting qualified operators, selection should be made through open competitive bidding to ensure the best financial and technical outcome for Bangladesh.
Diplomatic lobbying intensifies
Turkish Ambassador in Dhaka Ramis Şen met the aviation minister and state minister twice last month to discuss Çelebi Aviation's interest in ground handling services at airports.
Following the meeting on 12 May, the ministers assured that Çelebi Aviation would be given due consideration in the selection process, according to a ministry press release.
On 24 March, British High Commissioner Sarah Cooke conveyed Menzies Aviation's interest during a meeting with the aviation minister, the ministry said.
On 21 May, UAE Ambassador Abdulla Ali Abdulla Alhmoudi met the ministers on behalf of dnata, the Dubai-based aviation and travel services company.
On 16 June, Swiss Ambassador Reto Renggli discussed Swissport's interest in a courtesy meeting with the civil aviation minister and state minister.
