Nepal Airlines Corporation has been expanding its network eyeing the rising number of outbound travellers and migrant Nepali workers. NAC, at present, has four aircraft for international flights to eight destinations. Very recently, NAC started its flight to Dubai in United Arab Emirates and is close to concluding procedural stipulations to fly to Guangzhou of China. NAC can operate international flights to nine destinations with the four aircraft that it possesses. To expand its network, NAC has made a proposal to purchase two wide-body aircraft with the government. Pushpa Raj Acharya of The Himalayan Times caught up with Sugat Ratna Kansakar, Managing Director, Nepal Airlines Corporation, to know more on what the national flag carrier has been doing to expandits network and rebuild its image.

The national flag carrier has been expanding its network in recent times. After Dubai, where does Nepal Airlines Corporation plan to expand to?

Our next destination will be Guangzhou of China and we are preparing to fly there by the end of October. After Guangzhou, we will not be able to expand our network without purchasing more aircraft. At the moment, we have four aircraft for international flights and we are flying to eight destinations namely Doha, Hong Kong, Bengaluru, Mumbai, Delhi, Bangkok, Kuala Lumpur and Dubai. We can manage flights to nine destinations including Guangzhou

with three aircraft but we cannot take a chance because if one more aircraft is required to be sent for maintenance or is grounded then flight schedules will have to be changed and sometimes we might have to even cancel flights. To avoid such a scenario we will not start flights to other destinations after Guangzhou without purchasing more aircraft. Recently, one of our aircraft was grounded and has been sent to Singapore for maintenance but we have been easily operating regular flights through three aircraft. In the next phase, our target destinations will be Australia, Japan, South Korea and Saudi Arabia, among others. But the key thing is we have to purchase aircraft to operate flights to the aforesaid destinations.

Since NAC purchased two aircraft just one-and-a-half years back, do you think the government will allow NAC to purchase more aircraft?

NAC purchased two aircraft after a 28-year interval. We had witnessed the monopoly being exercised by the international airlines flying to Kathmandu. The expensive airfare in Kathmandu route that was fixed by the international airlines had discouraged foreign travellers from coming to Nepal. The international airlines started cutting their airfare after NAC started regular international flights to the aforementioned destinations. This is why the government must promote the national flag carrier to revive and give a boost to the country’s flagging tourism industry. Airfare is a major component to lure travellers. Till date, Kathmandu has been the most expensive destination among other Asian cities in terms of airfare. The government should not treat NAC like other public corporations. If the government is seeking more profits from NAC like Nepal Telecom then it must help us expand. To expand our business we need more aircraft because we already have sufficient human resources to operate it and I think the government will agree to NAC’s proposal. The NAC board has approved the proposal and is seeking the government’s guarantee to obtain loan from financial institutions to purchase two aircraft. The Cabinet needs to approve the government guarantee on credit that NAC is seeking. I think the government will take a positive decision regarding it because it will have a significant contribution in tourist inflow when the country’s national flag carrier is linked with many countries like Japan, South Korea, Australia and Britain, among others. The last time too, we obtained Rs 10 billion from the Employees Provident Fund on government guarantee and purchased two aircraft. The payback period of that loan is 15 years and we have been paying the instalments of that loan in a timely manner.

How much credit will NAC require on the government’s guarantee to purchase two more aircraft?

We need around Rs 25 billion to purchase two wide-body aircraft. We have been mulling over on purchasing two Airbus 330 aircraft, which can fly to Europe, Australia and other Asian countries like Japan and South Korea directly from Nepal. The Airbus 330 has 270 seats and this aircraft is the need of the country to bring more tourists from different countries. I remember an interaction I had a few months back with the Japanese ambassador to Nepal. During the interaction, I put forward my concern regarding the declining number of tourists. His response was that Japanese nationals are shy in nature and do not like to travel when there are too many transits. He mentioned that if we were able to connect Japan through direct flights there would be a possibility of bringing in more Japanese tourists to Nepal. There is a sizeable proportion of Buddhist population in Japan, China, Thailand and Myanmar, among others. If we are able to attract only 10 per cent of that population the country’s tourism sector will boom. We have tremendous potential to boost tourism in the country as we are bestowed with natural beauty and we are also rich in culture. One tourist arrival in the country creates employment opportunity for around six people. I believe tourism and hydropower are the only two sectors that can bring about transformative change in the country’s socioeconomic development in a sustainable way.  So the government must look at the country’s tourism sector and create an environment for NAC to purchase more aircraft.

Earlier too, there was a long debate and controversy while purchasing aircraft and you were also victimised for making a decision to send lock-up money to Airbus. Do you believe the situation has changed now?

The government allowed NAC to acquire the aircraft nearly four years after the decision to purchase them was made. It was four years of lost opportunity and NAC suffered a lot because of limited business during that time. I do not think there will be a controversy again as we have already purchased two aircraft from Airbus. And it will be feasible to buy aircraft from Airbus because NAC is preparing to sign an agreement with the original equipment manufacturer for maintenance works. There is also debate on whether we should purchase wide-body or narrow-body aircraft. We should prioritise our need. If we have to connect to Europe, Australia, Japan and South Korea, among others then we have to purchase wide-body aircraft, which can fly to long-range destinations as well. The narrow-body aircraft we purchased can fly to only short-range (around five hours) destinations. As we have already assigned aircraft for the Gulf countries and other closer destinations our priority must now be the source countries of tourists. We are focused on developing air connectivity with countries in Asia and Europe, where the number of outbound travellers has been rising.

You have mentioned that NAC will fly to Europe as well, but the fact is that the European Union has blacklisted Nepali airline companies. How can you make sure that NAC will be able to fly to Europe?

The Civil Aviation Authority of Nepal (CAAN) has been working on a war footing to get the ban rescinded. The EU has blacklisted Nepali airlines due to some concerns on aviation safety. We have been abiding by all the rules of International Civil Aviation Organisation and CAAN. EU will definitely lift the ban after their concerns are addressed by our aviation sector regulator.

You have talked about expanding international flights. What about improving domestic service?

Domestic services are important for socioeconomic development of the country. We have around 50 airfields. Being a national flag carrier, we also have to pay attention to improve domestic air service. For domestic services, we have three Twin Otters and two Chinese aircraft. Now our main focus is to expand international flight network and if we are able to generate substantial profit from our international flights we will invest a major chunk of it to improve domestic service. We will purchase aircraft and operate flights at subsidised rates to places where private airlines are reluctant to fly due to low flow of passengers.