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VOL. 03, NO. 08, Sept. 11 2009 (Bhadra 26 2066)
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The Weakest Link
As the government aims to bring in one million tourists within two years, lack of wide body planes with the national flag carrier emerges as a major handicap
By Bhagirath Yogi in London
In September last year, the then Minister for Tourism and Civil Aviation, Mrs Hisila Yami, told a gathering of Nepalese and tour operators from the UK that Nepal government was all set to buy two airplanes for the loss-making Nepal Airlines Corporation (NAC).
“The government has already decided to offer guaranty to buy two wide-body aircraft for the NAC,” the minister said while inaugurating the Nepal Fair in London in September last year. Exactly a year later, new Minister for Tourism and Civil Aviation, Sharat Singh Bhandari, said the government was in the final stage of procuring aircraft for the national flag carrier.
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NA Aircraft: Busy Schedule |
Talking to a group of journalists and tour operators at the Nepali embassy in London on Sep. 7, Minister Bhandari said a government-formed committee was assessing the proposals submitted by two leading aircraft manufactures, Boeing and Airbus, and a decision will be made soon. He said since the aircraft manufacturers themselves were taking part in the bid, there was no room for hanky-panky this time around.
As the Nepal government has decided to observe year 2011 as ‘Nepal Tourism Year 2011,’ analysts say the country immediately needs at least one wide body and one medium body aircraft to meet the increased demand. Officials say they plan to bring in around one million tourists by 2011—up from around 500,000 tourists who visited Nepal in 2008.
“We have got enough hotels and other infrastructure to accommodate up to one million tourists visiting Nepal,” said Prachanda Man Shrestha, CEO of Nepal Tourism Board (NTB)—that is spearheading the campaign. “ Nepal is an exotic destination –with an unparalled natural beauty, bio-diversity and rich cultural heritage—that is suitable for people from all age groups,” he added.
He recalled that the BBC holiday has enlisted Nepal as one of the 50 tourist destinations that people must visit before they die.
But, the weakest link in the government’s ambitious goal to bring in one million tourists is lack of planes with the national flag carrier, say tour operators.
“Besides catering to tourists, there is a great demand for national flag carrier in cities like London as the number of Nepalis living and working in the UK is on the rise,” said Anand Acharya of Holiday United, a travel company based in London. “But such a demand can’t be met unless Nepal Airlines adds wide-body planes in its fleet,” he added.
Two Boeing 757s that Nepal Airlines owns right now are both more than two decade old. When one aircraft develops a snag or has to be sent for routine maintenance, the Airlines’ international operations are affected badly.
The Nepali Congress government-led by G P Koirala decided to sell two aircraft belonging to the then RNAC in the early 1990s promising that they will be replaced by brand new wide-body aircraft soon. But even after nearly 15 years, the Airlines is yet to get the planes as promised. Instead, subsequent management of the airlines has been bogged into series of controversies and allegations of corruption while leasing aircraft for the airlines.
A number of committees were formed by previous governments to recommend ways to reform the airlines and make it profitable. Following the recommendations made by a committee led by then vice chairman of the National Planning Commission Dr Shankar Sharma, the government announced in 2002 that it was ready to sell-off up to 49% of its stake in the RNAC to either private investors or a joint venture partner.
The government’s decision came close on the heels of cumulative loss of whopping Rs 2.4bn incurred by the company in the fiscal year ending in July 2001.
But as the Maoist insurgency escalated and Nepal saw a series of unstable governments one after another, reforming the then RNAC seemed at the bottom of the agenda for subsequent governments. They also refused repeated requests by the state-owned airlines seeking financial guaranty to buy aircraft from the international market. Officials said it would be against the liberal, open market policy adopted by the government.
The Maoist-led government last year, however, seemed to be breaking the ice. Then minister Yami announced that the government had agreed to provide guaranty to the Corporation (which was renamed NAC after the fall of the monarchy) to buy two wide-body aircraft. But, the Maoist-led government did not last long to oversee the process.
The ‘Yellow Book’—that chronicles performance of the state-owned enterprises-- published by the Finance Ministry this year says the government is taking necessary action for receiving one Boeing 757 jet plane on lease and for procuring four narrow body and two wide body planes within next five years. “Study and analysis is taking place for procuring two suitable planes for domestic flight (trunk routes) and receive a new Twin Otter plane by swapping or exchanging the existing Twin Otter plane,” the Ministry said.
Sources, however, say choosing a supplier to buy two wide-body jets is going to be a major bone of contention for the beleaguered government led by Madhav Kumar Nepal.
NAC formally initiated process to purchase the aircraft in April this year by floating a 45-day tender notice inviting only aircraft manufacturers to participate in the bidding. In June this year, a committee formed to evaluate the bid documents submitted a report to the NAC management on the offers made by the two companies -- Boeing and Airbus -- that had participated in the bidding.
A highly placed source at the NAC said Boeing has offered to make available its aircraft to Nepal no sooner than 2011 while Airbus has offered to make its aircraft available earlier than that. While the government would like to buy new planes ahead of 2011 just ahead of the campaign, Nepal Airlines staff and pilots are said to be in favour of the Boeing planes saying that they have better knowledge of handling and maintaining Boeing aircraft compared to the Airbus.
NAC, which once had 21 airplanes including four Boeings, is currently operating with three Twin Otters and two aging Boeing 757s. Unless it moves fast to acquire new aircraft, its dream of bringing in one million tourists within two years is likely to remain a pipedream only. And, given its history, whatever the government decides it is likely to generate fresh controversy ruffling many feathers.
