Thai Airways Acting President Somchainuk Engtrakul sent a letter to the Civil Aviation Authority of Bangladesh (Caab) last week venting the company's frustration after the authorities postponed the most recent date for the airport takeover, said a senior official of the Ministry of Civil Aviation and Tourism.

After a series of failed promises, Caab told Thai Airways that the company could start managing the airport under a 10-year contract from April 1, already two months behind the original schedule. But it failed again.

Thai Airways now feels that it has been too lenient in dealing with the issue and that it is time to pursue legal proceedings against Caab for breach of contract.

Somchainuk in his letter called on Caab to abide by the contract and said Thai Airways would like to start running the airport in the next few months.

The handover of management of Shah Amanat has been delayed by protests from Biman Bangladesh Airlines staff fearing loss of jobs.

Chittagong City Mayor Mohiuddin Chowdhury, who is a vociferous opponent of the deal, alleged that there was a conspiracy behind the move to hand over the control to a foreign company.

He suggested that the airport would become a safe haven for drugs and arms smuggling once it was under Thai Airways management.

Accusing the government of signing a problematic contract he said its implementation could threaten national security.

Given the nature of politics in Bangladesh, Thai Airways executives doubted that the airport management could be handed over in June. They said January would be a more realistic expectation.

Running Shah Amanat Airport, under the deal signed on Dec 1 last year, would earn Thai Airways US$9.06 million a year in fees.

Thai Airways would handle passenger services, ground equipment, cargo and catering. It would also manage operations, maintenance and management of the terminal building and the ramps, and collect landing, security, embarkation and ground-handling fees.

The airport is situated on the route from Europe and Middle East to Far East.

Every day 20 airlines fly over Chittagong. With attractive fuel price, ground handling facilities and charges, some of these airlines could be encouraged to use Chittagong as transit.

Apart from some international flights of the national flag carrier Biman Bangladesh Airlines, three foreign airlines -- Phuket Air, a private airline of Thailand, Silk Air of Singapore and Thai Airways International had started international flights to and from Chittagong.

Unfortunately, operation of Phuket Air did not last long, it folded its operation soon after it began. Silk Air also pulled out its operation in January 2004. These two airlines failed to generate enough point-to-point traffic even to cover the operating cost. Phuket Air, however, resumed its service -- connecting Dubai.

The airport project, initiated on March 12, 1998, was completed on schedule in March 2001. The airport was expanded and modernised, not only looking at the future need, but as an alternative to Zia International Airport, Dhaka at times of need.

The airport with 1.80 lakh square feet terminal building and other modern facilities like boarding bridges and luggage conveyors is capable of handling about 1.5 million passengers a year and nearly 6000 tons of cargo. The expanded and strengthened runway is able to allow landing of any aircraft now in operation commercially in the world.

The government on June 23, 2005 decided to hand over management of the airport to Thai Airways for the next 10 years as it continued to incur losses. Thai Airways will pay a management fee of Tk 520 million over the period of the contract.

Shah Amanat International Airport has failed to achieve profitability and incurred consecutive annual losses of about Tk 320 million over the past four years.