Foreign airlines 'propose' code-share agreement

A number of foreign carriers have proposed code-share agreement with the Nepal Airlines Corporation (NAC), sources in knowledge of the matter have said.

The agreement, if signed, is expected to boost Nepal’s tourism sector and airlines revenue, government officials said, adding a code-share agreement is an easy way to create network in foreign countries.

Recently, Abu Dhabi-based Etihad Airways held a conference with officials of the Ministry of Culture, Tourism and Civil Aviation, NAC and travel trade entrepreneurs on the benefits of the agreement. Etihad has proposed “third-party” code-share agreement to the Nepal government. Such an agreement is a low-risk way for airlines to expand their network without added cost.

Etihad has code-share agreements with European airlines like Air France, Air Berlin and KLM. And, if Nepal signs the agreement with Etihad, the European Airlines will be the third party to Nepal, while Etihad will be the second party. This means Etihad can fly passengers of the European carriers to Nepal from Abu Dhabi using a NAC’s code.

Each airline has a separate flight code, but the codes are integrated into a single system.

Such an agreement will help foreign carriers boost their traveler numbers, which will lead to an increased number of travelers to Nepal.

Given NAC does not have direct connectivity to the US and European gateways, such an agreement will also benefit passengers with a significant reduction in travel time, a ministry source said.

Etihad Airways’ hub in Abu Dhabi is linked with key destinations in the US and European countries, including the UK, France, Germany and Ireland. Etihad flies around 148 destinations across the world.

“This type of agreement helps an airline create easy network with other carrier. The service also allows passengers to travel to areas, where their preferred carriers do not normally cover,” said Suresh Acharya, joint-secretary at the ministry.

Multiple sources said Tourism Minister Post Bahadur Bogati and other senior ministry officials might sign a provisional agreement, at least for six months, with Etihad to see whether the agreement will benefit Nepal. “If Nepal witnesses a substantial increase in tourist arrivals during the trail phase, an agreement might be signed,” the source said.

Etihad has expressed confidence that the agreement, if signed, will boost the number of high-end travelers to Nepal by over 15 percent.

“As NAC is required to fulfill a number of safety obligations to enter the Europe and other destinations by 2013-end, a code-share agreement with Etihad will also be helpful for NAC,” another ministry source said.

Travel trade entrepreneurs are also positive on the scheme, the source said, adding Etihad will promote Nepal in different travel fairs in the Europe as its “code-share partner”.

NAC Managing Director Madan Kharel said they have received several requests from foreign carriers for “code sharing”. “We will evaluate the proposals to find out whether they are in our interest. If it is so, will go for the agreement,” he said, adding other airlines making such proposals include India’s Jet Airways.

Meanwhile, ministry officials said Germany and France, including other countries, have requested for bilateral air service agreement with Nepal. They have requested the ministry to proceed ahead with the exchange of note if the agreement could not be signed at present. “A code-share agreement can also be an alternative to air to their request.”

source: The Kathmandu post,24 Feb 2013