Kathmandu, September 28;

The government’s ongoing negotiation to renew the Air Service Agreement with India is likely to be concluded by December this year.

“The only hitch is India is trying to reduce the number of seats for the Kathmandu-Delhi sector, given the passenger pressure in the Indian capital. Since Delhi is life-line for Nepal, the government has not agreed to the proposed reduction of the air seats so far,” CEO of Buddha Air, Birendra Bahadur Basynet, told this daily.

At present, as per the Air Traffic Regulation, only 6,000 air passengers can fly to New Delhi from Kathmandu every week. The Indian government has already adopted the open sky policy for cross-border cities. Some 18 cities in India, from Dehradun to Guwahati, would be open to foreign airlines.

According to the Indo-Nepal bilateral agreement, 10 Indian cities from

those 18 are included for access to Nepali airlines there. “The same policy is in the extension mode here,” Basynet added.

The government has bilateral agreements with 37 countries and the current flying rate to international destination is mere 14 per cent. The airlines have to guarantee a capital of 15 crore for domestic flying and 50 crore for international flights. Meanwhile, the private domestic airlines of Nepal are now trying hard to acquire licences to carry out international flights. The Yeti Airlines, Gorkha Airlines and Buddha Air are in the forefront.

Yeti Airlines conducted its first test-flight to Paro, Bhutan, on September 27. “We successfully conducted the 70-minute Jet-41 flight to Paro,” said Bijaya Shrestha, executive director of Yeti Airlines, adding, “We are now on a progressive mode.” Yeti has acquired a licence from the government to fly to 11 destinations, namely Singapore, Bangkok, Hong Kong, Kuala Lumpur, Seoul, Lhasa, Tibetan Autonomous Region of China, Delhi, Sarjaha, Doha and Riyad.

“We are in the process of obtaining Air Operation Certificates from the governments of these countries,” Shrestha said. He, however, added that there are many challenges facing the private airlines. Some major issues, according to Shrestha, are high cost of air transport because of high fuel cost, which is probably the most expensive here

in the whole of South Asia (the cost is $1000/ kl); high aeronautical charges;

upgrading TIA to meet international standards; lack of monetary incentives for the private sector; and government’s inefficient way of functioning.

Gorkha Airways, which is the oldest airlines among the domestic private ones after the closure of the Necon Air, is looking for joint venture. The CEO of Gorkha Air, Prajjwal Shrestha, told THT, “At a time when big international airlines are providing subsidised air fares, the competition has reached an all-time high,” adding, “As we neither have the management capabilities nor the financial strength to go ahead alone, I am encouraging joint venture.”