NAC Holding Short End of Business Stick

Ninety per cent of the international air business has been taken over by foreign airlines, with just a 10 per cent share left for the national carrier, according to experts.

However, the Ministry of Tourism and Civil Aviation (MoTCA) and Nepal Airlines Corporation (NAC) both are working to increase the share of the national carrier.

"Domestic airlines should target for the rest 90 per cent share also," said Tourism and Civil Aviation Minister Sharat Singh Bhandari during a programme on `Aircraft Financing in Nepal -- Problems and Prospects,' here today.

He also said that if the domestic airlines want to compete in the international market too, government is open to supporting their initiative.

"Here, we do not lack money in the market. It is the flow of investment that is lacking," Bhandari said adding that along with NAC, the private airlines sector should also come up with new plans. T alking about NAC, Bhandari said that NAC should make proper business plans and enhance its corporate and management sectors to garner profits.

"Currently, 22 international airlines operate in Nepal and even these existing international airlines are on their way to increasing the frequency of flights and seat capacity," said MoTCA secretary Nagendra Prasad Ghimire.

According to Ghimire, foreign airlines are profit-oriented so they will stay here as long as they get benefits from their flights operations.

Thus, they can also minimise flight operation if their business goes down.

Ghimire also informed about the preparations going on for a second full-fledged international airport.

He said, "The government has come up with a plan to establish an international airport at Nijgarh. The feasiblility study for it is going on and the study should be completed within 10 months. Within five years, Nepal can be developed into an international standard transit hub."

Talking about plans for boosting the number of NAC aircraft, NAC executive chairman Sugat Ratna Kansakar said, "We are planning to purchase aircraft rather than take them on lease as leasing aircraft creates numerous problems."

"However, for the purchase we need investments and funds," he added. According to Kansakar, Employee's Provident Fund is ready to grant Rs 10-12 billion but only if the government is ready to stand guarantee.

"Not only international flights, we are facing pressure to increase domestic flights too," added Kansakar.

During the programme, people from the civil aviation sector urged for establishing financial discipline along with responsible corporate behaviour so that the airlines corporation can get major financing support.

According to Civil Aviation Authority of Nepal director general Keshab Raj Khanal, domestic banks are not capable of major financing in this sector.

"The Cape Town Convention should be ratified and the government should allow funding in this sector," Khanal suggested.