The government recently appointed Madan Kharel as the executive chairman of Nepal Airlines Corporation. Despite being the national flag carrier, Nepal Airlines has not been able to make itself competitive in the market in terms of airfare and route diversification. Sujan Dhungana and Umesh Poudel of The Himalayan Times spoke to Kharel to learn of the future plans regarding NAC’s growth. Excerpts:

The government has brought you back to the top post of NAC after a few years. How are you feeling?

I am happy that the government has appointed me to this post. It is an opportunity that I have received to lead Nepal Airlines twice. My appointment at NAC at present has come at a time when the national flag carrier is passing through a difficult phase. However, I take my appointment as an opportunity to give proper direction to Nepal Airlines. It is certain that Nepal Airlines, as an airline company will face challenges along with the growth of the aviation industry in the country. But we have to be ready to cope with such challenges. I have served at NAC’s top post for almost two-and-a-half years before and NAC had accomplished and initiated various plans at that time that were intended for the growth of the corporation. I will give continuity to all those plans that were initiated back then. However, the previous management has also continued a few of those plans and I will accomplish them during my tenure. The major problem that NAC is facing today is not the availability of aircraft, but connectivity, especially international connectivity. We have added two new wide-body aircraft to NAC’s fleet but have not been able to identify new international destinations. As a result, we have been using these long-range aircraft to old destinations where we can utilise narrow-body aircraft. Similarly, we are also facing a crunch of pilots to fly the aircraft. Now addressing these two issues will take some time. In a bid to start flying to new destinations like China, Japan and Korea, we need to fulfil all legal procedures of those countries which will take time. At the moment it is a great challenge for NAC to use these available big aircraft until we start flying to new international destinations.

Does that mean we bought the wide-body aircraft without proper homework?

Instead of commenting on who did what, I am committed to adding new international destinations to Nepal Airlines’ schedule as soon as possible. As mentioned earlier, I have given due focus to identifying new international destinations for Nepal Airlines from the first day I joined office. So far, we have failed to even appoint a general sales agent (GSA) of NAC for Japan. However, we will finalise it through our board meeting soon. Similarly, legal procedures to fly to other countries like China and Korea will be accomplished soon. However, it is not just in the hands of NAC to add new destinations. It is up to the destination nation whether or not to allow Nepal Airlines to fly to their countries. However, as different airlines of these countries are flying to and from Nepal, we are optimistic that Nepal Airlines will get permission to fly to these countries soon.

It is said that Nepal Airlines is losing its credibility owing to its inability to fly to diverse destinations and the delay in regular flights. What is your take on this?

Such problems can be seen worldwide and every airline company goes through such problems. However, the point is how we tackle such problems and minimise them in the future. If everyone in NAC has faith and dedication towards their work, we can operate our flights on time. We need to keep NAC’s management intact to cope not only with problems related to delay in flights but various other problems. Effective plans and policies and dedication of staffs towards their work will improve our services which will ultimately enhance our credibility. Moreover, this is how we can transform NAC into a profit making entity. Thus, I am committed to making my management strong and competitive. Similarly, we also need strong plans to expand NAC, its fleet and services and we will introduce them soon. Meanwhile, we have been receiving positive feedback regarding our flights from many people. The primary goal of NAC today is to expand its routes, add aircraft to its fleet, operate flights on time and ultimately make profit out of this business. However, we need to identify necessary tools to achieve these goals which we will prepare soon. I would like to assure that I will bring positive changes in NAC within the next six months in terms of everything. We have a 10-year plan in effect, which we will revise as per necessity and context. All such plans will be changed as per the demand of the industry and the institution.

NAC’s major source of income is ground handling while its flight operation is at loss. However, the International Civil Aviation Organisation recommends that these two tasks need to be handled by separate entities. What do you have to say on this?

We have been involved in ground handling of aircraft at TIA. It is true that ground handling is one of the main sources of income for NAC. However, it is not that NAC solely depends on  the income made through ground handling. This year, NAC’s budget is Rs 25 billion and we will be able to collect only Rs four billion from ground handling services while the remaining budget has to be generated through flight operations. This shows that Nepal Airlines Corporation does not completely depend on the income from ground handling. However, we need to strengthen our air operations (both domestic and international). I assure that the national flag carrier will strengthen its air operations within the next two years.

However, the aviation sector is getting competitive with a number of foreign airlines entering the market. How do you plan to make NAC competitive?

As I earlier mentioned that Nepal Airlines at present is facing various difficulties which hinder its competitive growth. In such a context, the role of the government towards the national flag carrier is very high. It does not mean that the government should support NAC forever, but it should at least for a certain period as being a national flag carrier we have many social responsibilities too. The government is celebrating ‘Visit Nepal 2020’ with a target to increase the inflow of foreign tourists and boost tourism in Nepal. Nepal Airlines has a big role in the upcoming campaign and bringing in foreign tourists. Thus, Nepal Airlines today needs support from the government not only for its growth but also to boost country’s tourism and economy. We cannot boost country’s tourism without strengthening Nepal Airlines and its service. In a bid to attract tourists, we need to have competitive airfare to and from every destination. This is possible only if the government supports NAC. To strengthen our economy, strong air transportation is a must. We all know this fact, but we need to act now and adopt ways to make Nepal Airlines strong and competitive.

Lastly, appointing a strategic partner for NAC has long been discussed. Will it be in your priority list?

It is still under discussion. There are instances of the strategic partner system failing across the globe while they have also helped the growth of firms. We need to analyse what is the need of the time. We will take necessary decisions on the basis of institutional demand in the future.