TAKING STOCK : Pay less, fly more

Rakesh Wadhwa


The air wars continue unabated. The fight for customers on the Kathmandu – Delhi route has intensified. The battle has been carried over to the domestic routes as well. Cosmic Air started it by being the first to reduce fares to government mandated minimum levels. The consumers watch in amazement as the fares fall to rock bottom levels, and, then – they fall some more. A year earlier no one could have predicted the lows. If you had asked the airlines, as to what would happen if the fares come down as drastically as they have, they would have said, “we will ground our planes and go home”. Today it is different. Each airline woos the air travelers with the zeal usually associated with our first love. Each airline wants to drive the other to bankruptcy. Are these fights good? You bet. Druk Air has fired the latest salvo in the rate-cut campaigns. Consider its new fares to Delhi. Rs 8,000 will allow you to go to India’s capital and return. If you travel in a group of four or more you will pay 20 per cent less. Along with the fare reduction the baggage limit has been increased to 35kg. Only a short while ago travelers had to shell out twice as much, and the baggage allowance was limited to 20kg.

Even Druk’s low fares are not the cheapest. That honour belongs to Cosmic which is offering prepaid tickets to Delhi at Rs 2,400. Admittedly there is a catch. The service is minimal and meals are not served. But so what? For people who do not care for airline food, or who would just pack their own snack box, the low fares are a blessing. For some of us, lower airfares mean the difference between life and death. Many of those who earlier traveled by road now fly. This change by itself saves lives, as air travel is safer. Couple this with the lives saved by the people who can now fly to India for urgently required medical treatment, and we realise that low fares mean more than just savings. These fare wars have exposed the myth that big businesses can cheat the little fellow – the consumer – who has no control over what he pays. Businesses are supposed to gouge their customers. So what happened? Why are the airlines run by fat cat businessmen in such dire straits?

It is because the consumer gets to decide which airline he flies on. As soon as he has choice, his powers increase and that of the airline decrease. The more the competition, the more the choices available, the more is the benefit to the general public. High prices are the result of government given powers. As long as RNAC enjoyed monopoly privileges granted by HMG, it could charge prices at its discretion. It cannot do so now, for then we will simply travel by Cosmic, Buddha Air, or Yeti Airlines. Thus, RNAC has been forced to mend its ways; it has had to boost its marketing expenses, cut fares, and enhance customer services. Customers are reaping a bonanza. Cosmic Air’s rate cut in April resulted in tickets to Biratnagar, Bhairahwa, and Nepalgunj from Kathmandu being cheaper by 44 per cent. The fare to Nepalgunj has dropped to Rs 1,970 from Rs 3,500, resulting in a saving of Rs 1,530 for the flier. This money is all his – to spend or save as he wishes. When businesses gouge us on price, it is government restrictions which need to be lifted.

The answer is not to regulate and tie airlines or other businesses with red-tape, paperwork, and bureaucratic rules. The answer lies in opening up the sector to competition. Even now the competition is far from perfect. The skies have only been partially opened. The proper way to make air travel affordable to all, and safer, is by opening the skies completely. Allow any airline from anywhere in the world to come to Nepal. Let international airlines be allowed to compete on the domestic routes. Permit foreign investment in airports. Then sit back and watch big businesses gouge each other.

(The writer can be contacted at: everest@mos.com.np)