NAC gears up to redeem lost glory

Kathmandu, June 30:

Nepal Airlines Corporation (NAC), the national flag carrier, once almost ‘financially bankrupt’ airlines, is gearing up to bring back its past glory, as it is slowly generating profits for the past four years.

Despite being a state-owned airlines, it has faced a very long history of financial and other difficulties.

“NAC is now slowly coming back on track, as a profitable public enterprise,” said Gautam Das Shrestha, managing director of NAC, while talking to The Himalayan Times, on the eve of the 49th anniversary of the national flag carrier.

He is optimistic that the lost glory of NAC (then RNAC) could be brought back once the current fleet size is doubled and proper long-term strategy with a public-private-partnership concept is opted. “The urgent need is a wide-bodied aircraft in order to sustain the progress,” he added.

Along with the profits made by the airlines, NAC has been able to reduce the bank overdraft from Rs 1.46 billion a year ago to Rs 760 million this year, he said adding that it has, in the meantime, also paid Rs 190 million tax. “The ongoing restructuring and internal reforms are paying back.”

Some other developments that took place over the year include setting up of pension and gratuity fund worth Rs 40 million for employees and advance payment of Rs 27.3 million to Nepal Oil Corp.

“We initiated a massive overhead cost cutting measures and stopped flying to loss making sectors, while operations to profit-making sectors were strengthened and reliability and punctuality have been improved,” claimed Shrestha.

He, however, underlined the need for expanding the volume of businesses by adding more aircrafts in the fleet. In terms of ‘reliability and punctuality’, Shrestha 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 uplifting the airlines.

The NAC management has been trying to increase the fleet size to boost business and compete more effectively. Shrestha informed that the management has a plan to purchase at least one wide-bodied jet and two turbo (about 50-60 seater) to meet the rising demand and cope up with emerging challenges in the aviation business.

“If everything goes as planned, NAC will be add-ing a wide-bodied jet by October-November this year and acquire another plane on lease soon,” he said add-ing that the airlines plans to resume its services to at least one sector in Europe.

According to Raju Bahadur KC, director-corporate, the international operation is the sole bread and butter earner for the NAC, which employs a total of 1400 people, while its

domestic operations is incurring an average of Rs 180 million annual loss. “In domestic operations, we fly to remote areas and provide services at the subsidised rates, where most of the private airlines don’t operate,” he said.

Besides glorious past and brighter future prospects, Shrestha further said that NAC has every reason to be proud and fly to the new heights. “Our current occupancy rate has gone up to an average 74 per cent, against the target of 67 per cent,” he added.

With its past safety records, reliable and punctual services, as well as a tag of the national carrier, the NAC has such a huge potential that its a dream of any private sector company or international airlines to forge a partnership with NAC, Shrestha said adding that the corporation should now opt for a paradigm shift from a fully state-owned enterprise to a vibrant company in public-private- partnership concept.

NAC currently flies to seven international destinations — Kuala Lumpur, Bangkok, Dubai, Delhi, Hong Kong, Shanghai and Osaka — in six different countries and on 31 domestic routes.

It has currently two 190-seater Boeing 757 aircrafts in operation on the international routes and four 19-seater twin otter that fly on domestic routes.