The near future of image processing techniques state the compatibility issues of applied algorithms with storage techniques and data transmission across noisy environment. Image compression is a vital element that is employed due to its characteristics of image size reduction without considerable data loss. This paper employs an SAR image compression technique based on CDF 5/3 in unison with bit plane algorithm. The CDF 5/3 encodes the real images converted by fast Fourier transform (FFT). The performance analysis is observed by changing in BPP (Bit per pixel) for a given image and based on varying BPP peak signal-to-noise ratio (PSNR) and (Mean square Error) MSE. General Terms Image processing, SAR image, wavelet transform, Directional lifting wavelet transform.