Airbus makes ‘Incredible Offer’ to challenge Boeing

The European Union (EU) wants European aircraft manufacturer Airbus to have an “equal opportunity” alongside US-based Boeing in Bangladesh’s aircraft procurement process.

Europe made the call shortly after Bangladesh Biman signed an agreement with Boeing to purchase 14 aircraft for fleet expansion. The EU also called for transparency in government procurement and decisions based on commercial merit.

EU Ambassador to Bangladesh and Head of Delegation Michael Miller made the remarks at a joint briefing on Sunday following a meeting between the government and ambassadors and representatives of the 27 EU member states at the Ministry of Commerce.

The EU ambassador said, “From our perspective, Airbus has an incredible competitive offer. Dhaka should take it very seriously.” He also expressed hope that Airbus and Biman Bangladesh Airlines would hold discussions on the matter soon.

During French President Emmanuel Macron’s visit to Dhaka in 2023, Bangladesh had made an in-principle decision to purchase 10 Airbus aircraft. Following the ouster of Sheikh Hasina in the mass uprising and amid strategic pressure to reduce the trade gap with the United States, the interim government ultimately decided in favour of Boeing.

On April 30, Biman signed an agreement to purchase 14 new aircraft from Boeing. The deal includes eight Boeing 787-10 Dreamliners, two Boeing 787-9 Dreamliners and four Boeing 737-8 MAX jets. Their estimated market value is around $3.7 billion, or approximately Tk 450 billion. The average price per aircraft is Tk 32.14 billion. The aircraft are scheduled to be delivered in phases between 2031 and 2035.

As a result, the Boeing-Airbus competition is no longer limited to the issue of modernising Biman’s fleet; it has also become linked to Bangladesh’s broader trade and diplomatic relations. Bangladesh had earlier made an in-principle decision to purchase aircraft from Airbus as part of its fleet modernisation plan. Subsequently, amid a change of government and a new equation in commercial relations with the United States, the agreement was signed with Boeing.

“Decision based on commercial merit”

The EU ambassador said, “We are asking for a level playing field in all areas. If you make a decision on any government procurement, it should be based on commercial merit, and our companies should be able to compete to the best of their ability with companies from any country.”

Through this statement, the EU essentially called for ensuring that European companies are not disadvantaged in any way in Bangladesh’s government procurement process.

Miller had previously urged Bangladesh to include Airbus in its plans to renew Biman’s fleet. At the time, he stressed transparency and non-discriminatory competition.

Relevant stakeholders do not view Europe’s position merely as a commercial interest in selling aircraft. The EU is one of Bangladesh’s largest trading partners. Therefore, a major government procurement decision such as an aircraft purchase also carries implications for future trade and investment relations.

48 non-tariff barriers removed, 13 remain

Meanwhile, Bangladesh has reported significant progress in strengthening its trade relations with the EU. Of the 61 non-tariff barriers identified by the EU, 48 have been resolved, while the remaining 13 are in the process of being addressed.

Commerce Minister Khandakar Abdul Muktadir said that in March, a delegation led by the EU ambassador had highlighted various obstacles affecting trade with Bangladesh. Following this, initiatives were taken to resolve the issues quickly in coordination with the National Board of Revenue (NBR), the ministries and agencies concerned with agriculture, fisheries and livestock, shipping and other relevant sectors.

Among the issues resolved are complications related to renewing licences for 100 percent foreign-owned logistics companies, increasing the annual limit for importing commercial samples from $10,000 to $20,000, and resolving customs valuation complications involving scanning smart cards used to ensure the traceability of export products, along with setting reasonable values for them.

The commerce minister said the EU is Bangladesh’s largest export market. He said the government is focusing not only on removing non-tariff barriers but also on product diversification to retain access to the market and further increase trade.

Talks on FTA to begin soon

Significant progress was also reported at the meeting regarding a Bangladesh-EU free trade agreement (FTA). Ambassador Michael Miller said the European Commission had responded positively after Bangladesh formally proposed an FTA and an investment protection agreement. Once the necessary approvals from the member states are completed, joint technical discussions on the issue could begin as early as this week.

The matter is extremely important for Bangladesh. After graduating from the least developed country (LDC) category, retaining its current trade benefits in the European market will become a major challenge. In this situation, an FTA or a similar trade framework could provide important protection for Bangladesh’s exports.

Bangladesh has previously urged that FTA negotiations begin soon. Dhaka considers such an agreement important for retaining duty-free access to the European market and increasing future investment.

Dhaka seeks EU support to defer LDC graduation

Bangladesh has applied to defer its LDC graduation by another three years. The commerce minister said Bangladesh has already passed two stages of the process under the UN Committee for Development Policy (CDP) and the Economic and Social Council (ECOSOC). Dhaka expects EU support if the matter is raised at the 81st session of the United Nations General Assembly.

The commerce minister said, “We have applied for a three-year deferment. We have passed two stages at the United Nations. When the matter is raised at the 81st session of the General Assembly, we hope to receive the European Union’s support.”

This is important for Bangladesh because there are concerns over export tariff preferences in the European market after LDC graduation, particularly regarding the competitiveness of the ready-made garment sector. For this reason, the government is pursuing FTA negotiations while also seeking to extend the timeline for graduation.

‘Import decisions made in national interest’

Alongside the EU’s remarks on the purchase of Airbus aircraft, the commerce minister also responded to questions about imports of goods from the United States and government procurement. He said Bangladesh makes import decisions based not on the influence of any particular country, but by considering national interests, economic rationale and the needs of the people.

The commerce minister noted that in the case of imports of fuel, LNG and food grains, the government procurement committee makes decisions by considering competitive prices, product quality and the rate of wastage.

The government’s position on aircraft purchases is essentially the same—the decision will be made by considering the country’s needs, technological capabilities, price, maintenance costs and long-term commercial benefits. However, the EU’s message makes it clear that it wants Airbus to have an equal opportunity to compete with Boeing.

Trade and investment: a new equation

Sunday’s meeting discussed strengthening trade and investment relations, removing non-tariff barriers, improving the business environment for European companies and market access after LDC graduation. Among those attending were Finance and Planning Adviser Rashed Al Mahmud Titumir, Foreign Affairs State Minister Shama Obaed, Planning State Minister Jonaed Abdur Rahim Saki, acting NBR Chairman Ahsan Habib and senior officials from the relevant ministries.

Overall, three important messages emerged on the same day: following the major agreement with Boeing, the EU called for Airbus to be given an opportunity to compete; Bangladesh has moved towards an FTA after resolving 48 of the 61 non-tariff barriers; and Dhaka has sought European support for its initiative to defer LDC graduation.

As a result, the competition over aircraft purchases is no longer simply a business rivalry between two aircraft manufacturers. It is increasingly becoming intertwined with Bangladesh’s future trade policy, access to the European market, investment and diplomatic balance.