RNAC moves into profitability

Himalayan News Service

Kathmandu, June 30:

Royal Nepal Airlines Corporation (RNAC), the national flag carrier, once labelled as a

‘financially bankrupt’ airlines, is slowly generating profits for the past two and half years.

Despite RNAC being a state-owned airlines, facing a very long history of financial and other difficulties, it is now slowly becoming a profitable public enterprise, Mohan Khanal, managing director of RNAC disclosed to The Himalayan Times today. Khanal mentioned this to The Himalayan Times on the eve of the completion of 47 years of operations of the national flag carrier on July 1. However, he said that business transactions in the current fiscal year has not been very encouraging compared to previous fiscal years. Revenue statistics produced by the corporation are yet to be audited by the auditor’s general office, according to Khanal.

According to RNAC management sources, in the last two fiscal years, the corporation earned over Rs 200 million as profits. This year’s profit is yet to be known. However, operating costs have increased manifold, due to hike in fuel prices in the international market. This has posed another big challenge to our survival in the days, said Khanal. He underlined the need for expanding the volume of businesses by adding more aircrafts in the corporation’s fleet. In terms of ‘reliability and punctuality’ of RNAC flights, Khanal said that operations have been up-to the mark and, quality of service is at par with the global standards which has further encouraged us to work towards the upliftment of the airlines.

According to Khanal, the airlines currently flies to 10 international destinations in seven countries. The international destinations include Malaysia, Bangkok, Singapore, Dubai, Delhi, Bangalore, Mumbai, Hong Kong, Shanghai and Osaka. However, this time the Shanghai and Osaka destinations are being postponed as ‘usual’ for some period, said Khanal. RNAC has two 190-seater aircrafts that are in operation on the international routes and seven other 19-seater twin-otter planes for domestic destinations. RNAC management has been trying for long to purchase aircrafts to boost business and compete more effectively with international airlines but has not been succeeded to procure the aircrafts for some technical difficulties. However, Khanal said that the management has a plan to purchase at least two wide-body jets and two turbo (about 50-60-seater) to cope up with emerging challenges in the aviation business. Although, all management colleagues have agreed to buy aircrafts on principle, time is not ripe to clinch a deal, informed Khanal.

After buying aircrafts, RNAC will fly to more international destinations, which are waiting to be tapped and can be rich source for in-bound tourists, he said. He said there are a number of international destinations that can help generate profit for RNAC. All it requires is better infrastructure, he added. Talking about slow business generation by RNAC, Khanal said that due to the country’s environment, tourists arrivals did not go up which has also had it own inimical impact on the performance of the airlines. “The overall tourism performance in this current fiscal does not seem encouraging on which the airline’s business depends so crucially,” said he. Current flight occupancy in RNAC is about 80 per cent, besides Indian routes. But the Delhi route has a 100 per cent occupancy, said Khanal. RNAC’s air transport operation began with a single DC-3 aircraft and 97 employees back in 1958, linking four points with the capital, Kathmandu. Today the airlines network extends to more than 25 points in the domestic sector, besides the many international links.

RNAC operates two flights daily to Pokhara, which is 40 minutes from Kathmandu. RNAC also flies to Lukla daily. Other domestic routes are Biratnagar, Nepalgunj, Taplegunj, Phaplu, Tumlingtar, Rumjatar, Jumla, Jomsom, Simikot and Dolpa. The aviation history of Nepal started in early 1940s. RNAC took to the international route in 1960. Starting with a fleet of Douglas DC 3’s, the airline quickly moved on to the turboprop Fokker F-27. The commissioning

of the remarkable Twin Otter and Pilatus Porter aircraft into the Royal Nepal Airlines fleet in 1970 brought around a quick and easy way of accessing many remote regions in the kingdom.

By the early 1970s, the airlines had introduced Hawker Siddley HS 748 turboprops, and Boeing

727 jet airliners were introduced in 1972 after Kathmandu’s runway had been extended for medium-sized jet operations. Boeing 757s gradually replaced the Boeing 727s.