Postponing flights to Osaka might make business sense to the airline, but in doing so NAC’s credibility is at stake
The decision by Nepal Airlines Corporation (NAC) to postpone its scheduled flights to Japan only adds to its already poor image. The national flag carrier was to fly to the Japanese city of Osaka from June, after a hiatus of more than 12 years. However, it has decided to postpone the flights till August due to the poor response to the pre-booking that opened a month ago. Only seven tickets were sold for the months of June and July. Could this have happened due to lack of publicity and long-term planning? The passengers, according to NAC, will be referred to other airlines. NAC had pinned high hopes on the three flights a week to Osaka to overcome the financial difficulties it is facing in repaying its loans to purchase its two wide-body aircraft. The two aircraft arrived in quick succession last year without a long-haul destination to press them into service. Europe is a lucrative destination, but the 28-nation European Union has blacklisted Nepali airlines, including NAC, from flying in its skies since 2013, citing lack of improvement in safety lapses by Nepal’s aviation regulator – although ICAO has removed Nepal’s aviation from its blacklist.
NAC used to operate commercial flights to Osaka twice a week from 1994 to 2007, using its narrow-body Boeing 757, with a stopover in Shanghai, China, and it should have known better that there are few passengers during the monsoon season. Knowing that flights were also suspended then during the monsoon season, NAC should have thought twice before opening its ticket booking and saved itself a lot of embarrassment and ridicule. True, rather than fly almost empty, postponing the flights to Osaka makes business sense for the airline. With the grounding of India’s Jet Airways, it is definitely more profitable for Nepal Airlines to fly to New Delhi in full capacity. However, in doing so, the credibility of the airline is at stake, as passengers want an airline whose schedule and service are reliable.
Air connectivity is a prerequisite for increasing tourist flow, and the resumption of flights to Osaka, and hopefully later to Tokyo as was initially planned, holds much promise of attracting tourists from the Land of the Rising Sun. Secondly, with Japan and Nepal signing an agreement to recruit Nepali labourers in different fields of the economy, there will be plenty of Nepalis flying there and back in the near future. But NAC will make good business only if it starts operating like a truly commercial airline, without the constant intrusion of political and other interests. NAC must strive to bring back its past glory when its services were world-class and its aircraft, though limited in number, were flying to as far as London and Paris in Europe and Shanghai and Japan in the Far East. While it waits till August to begin flights to Japan, NAC must do what is necessary to start services to China without much delay. And the Civil Aviation Authority of Nepal (CAAN) must do whatever it takes to meet the international safety standards to take Nepali airlines out of the EU air safety list. But after decades of mismanagement and stagnation, if NAC is to expand its business and transform itself into a successful airline, it will be necessary to rope in a foreign strategic partner.
Access to banks
All 123 local levels in Province-5 now have access to banking channels. Last year, the federal government had announced that all local levels would be connected with banks and financial institutions within the current fiscal. Sunchhahari Rural Municipality in Rolpa district is the last local level to have access to a commercial bank, according to officials at the Bhairahawa-based branch office of Nepal Rastra Bank. As per the latest data provided by the central bank, as many as 725 local levels, out of a total of 753 in the country, are now connected to banking channels. Karnali is the only province where only 12 of the 88 local levels have a banking facility.
As all the local levels are independent of one another, they need to have access to a banking facility to carry out their financial transactions as required by law. All the rural local levels had been facing problems in carrying out their financial transactions due to absence of banks in their areas. With the opening up of banks in most of the local levels, their financial transactions will be easier and transparent. From now onward, they will no longer have to rely on the district headquarters to manage their accounts. This will help them maintain fiscal discipline.
A version of this article appears in print on June 07, 2019 of The Himalayan Times.