Nepal | May 25, 2020

EDITORIAL: Flying high

The Himalayan Times
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Additional aircraft in the fleet may take NAC to soaring heights, but only if the company is managed well

A new Airbus A330-200 series wide-body aircraft touched down the Tribhuvan International Airport (TIA) yesterday morning. The $104.5- million 274-seater aircraft will start its commercial operation to Dubai from August 1. Nepal Airlines Corporation (NAC) is also receiving another wide-body aircraft of the same version by August-end. The national flag carrier will have five aircraft – two narrow-body aircraft and one Boeing 757 and two wide-body aircraft in its fleet, making it able to conduct international flights in major cities. Once all aircraft come into operation NAC will be able to bring in more tourists promoting the country’s tourism. Currently, the three narrow-body aircraft have been conducting flights to nine international destinations. NAC, which has earned a bad image in the aviation sector due to its poor management and financial health, had singed separate loan agreements totalling Rs 25 billion at nine per cent annual interest rate with Employees’ Provident Fund and the Citizens Investment Fund in June last year after the government agreed to stand as the guarantor for the loans. NAC needs to pay Rs 3.5 billion to the lending agencies in the form of annual interest which is almost the same NAC earns from the ground handling of TIA.

Ever since NAC – then Royal Nepal Airlines Corporation – officially rolled out its service in July 1958, it has always been a loss-making entity while other regional airlines, including Thai Airways, which started their operations at almost the same time have got a strong foothold in the aviation industry. Almost 60 years in the air, NAC is now seeking management and financial strategic partners to make it a profitable venture. In a bid to restructure the national flag carrier, the Ministry of Culture, Tourism and Civil Aviation (MoCTCA) recently sought suggestions from the Ministry of Finance (MoF) to bring management and financial strategic partners for NAC. A financial strategic partner can have up to 20 per cent equity in the financially ailing NAC. Management strategic partner will be roped in to look into overall management aspect.

Suresh Acharya, acting secretary at MoCTCA, has said financial strategic partner will “identify financial leakages” at NAC and restructure its entire commercial aspect to make it financially strong. Do we really need a financial strategic partner to plug financial leakages? Have we not been able to identify where the problems are? Overstaffing, unavailability of an adequate number of pilots and technicians, irregularities – top-notch NAC officials had landed in financial controversy in the past – and poor management is the major problem NAC has been facing since its inception. Despite its repeated attempts to bring in strategic financial and management partners since 2013, NAC has failed to attract potential firms to make it a flying business. The MoF has already given its consent to the MoCTCA to hire strategic partners on the condition that they follow the domestic law. Although NAC made a profit of Rs 43.3 million in 2016-17, its cumulative loss was Rs 1.82 billion at that time. Airlines business is very complex. It requires huge capital investment and sound financial health. Additional aircraft in the fleet may take NAC to soaring heights, but only if the company is managed well; or else NAC creating a niche in the aviation sector will just be a flight of fancy.

Stop child marriage

It is welcome news that children are all set to launch a campaign against child marriage in Sankhuwasabha. Despite child marriage illegal in Nepal – child marriage was outlawed in 1963 – the practice is still prevalent in many parts of the country. At a town-level gathering of children in Khandbari Municipality, participants said since child marriages were still taking place due to lack of awareness, there was an urgent need to run extensive campaigns.

The minimum age of marriage in Nepal is 20 years. A September 2016 Human Rights Watch report said “37 per cent of girls in Nepal marry before age of 18 and 10 per cent are married by age 15”. Early marriage could mean early childbearing, which could be risky for both mother and child. Nepal has committed to ending child marriage by 2030 under the global Sustainable Development Goals. Child marriage is prevalent in Nepal, largely due to lack of education, awareness and poverty. Campaigns against child marriage hence must be launched in other parts of the country, while governments at all levels and other concerned must work to end the practice.

A version of this article appears in print on June 29, 2018 of The Himalayan Times.

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