NAC to get new aircraft for first time in 25 years

Nepal Airlines Corporation (NAC) usually hits the headlines for management fiascos and habitual flight cancellations and delays. However, the state-owned carrier has been in the news recently for a more cheerful reason. The government has recently decided to enhance NAC’s ancient and tiny fleet by acquiring six new aircraft.

If the plan succeeds, this will be the first time in 25 years that NAC is getting new planes. The national flag carrier has an unenviable record of proposed aircraft deals falling apart with its chiefs also ending up in jail. The tourism industry, therefore, is keeping its fingers crossed.

The carrier plans to operate the new planes on remote sectors where travellers have often been overcharged due to the rush for air tickets. NAC has not been able to operate flights to remote destinations due to lack of aircraft, leaving travellers at the mercy of private airlines who know an opportunity when they see one.

NAC officials said that the government’s plan to buy new aircraft will put them in a position to compete with private airlines and serve people living in remote areas not connected by roads. The loss-making corporation has prepared a number of plans after the government moved to buy the Chinese-made 58-seater MA60 aircraft.

NAC spokesperson Saroj Kasaju said that they planned to operate the planes on long-haul sectors. The plane will also be used on the mountain flight, an aerial sightseeing tour of the Himalaya that is its most profitable sector.

After humming and hawing for more than a year, the government finally signed a commercial agreement to obtain six Chinese aircraft — four 19-seater Y12e and two MA60 for NAC. The government will pay for four planes while two will be gifts.

NAC said that the MA60 will be used on its Biratnagar, Pokhara, Bhairahawa, Nepalgunj and Bhadrapur routes. The smaller Y12e will operate on remote sectors, including a number of tourist destinations, said Kasaju.

Meanwhile, NAC has also decided to repair its two grounded Twin Otters which were received from Canada as donations in the 1970s. “NAC will have 11 aircraft in total,” Kasaju said.

As one of NAC’s objectives is to serve remote people where private airlines are hesitant to operate, officials said that the profits earned from tourist sectors will compensate its losses incurred in the remote sector. They said that due to travel demand, the remote sector has also become a potential sector nowadays. Due to limited aircraft, NAC’s flight operating stations have dropped to 25 from 42 a decade ago. “We are unable to operate daily flights even to the existing destinations.” In its heyday, NAC used to operate 18 aircraft — 12 Twin Otters, three Avros and three Pilatus Porters — to 42 stations across the country.

According to NAC, it has been racking up losses of Rs 170 million annually from its domestic operation as it has been serving remote sectors at reduced airfares. The carrier said that the hefty losses were due to flying to remote sectors where operating costs are comparatively higher.

Meanwhile, experts said that political interference should end to make NAC a professional body, as its downfall has been blamed on over politicization and internal management problems.

“Inducting aircraft into the fleet means a capacity enhancement. But it should reform its management first,” said Rajesh Raj Dali, former director general of the Civil Aviation Authority of Nepal. In addition, it should be a public-oriented organization to earn public trust. “And for this, it should be freed from the political interference that it has been facing until now,” Dali added.

Although domestic air passenger movement has been growing, NAC’s performance in the domestic sector has been falling with every passing year. 

According to Tribhuvan International Airport (TIA), the number of passengers carried by NAC in 2010 dipped 11.84 percent to 47,081 from 53,406 in the previous year. In 2010, domestic airlines carried 1.55 million travellers or 176,833 more than in 2009. But NAC’s market share shrank to 3.02 percent.

NAC’s poor performance continued in 2011. The number of passengers it carried in 2011 dipped 2.31 percent to 45,990. Its market share shrank to a low of 2.90 percent. In the first six months of 2012, NAC saw its passenger movement declining by a whopping 21.30 percent to 18,378.

source: The Kathmandu post,5 Dec 2012