Aviation industry sensing survival threat

By Gopal Tiwari

KATHMANDU, Sept 12 - Sky is not the limit for Nepali aviation industry. The environment here already looks cloudy and entrepreneurs have begun to smell survival threat.

What they fear now is that it might come too early in the increasingly crowded sky. Cutthroat price war, government's faulty regulation on mandatory flights to remote areas compounded with poor infrastructure has made industry's future bleak. Another looming threat is rise in fuel prices following its soaring international prices.   

Birendra Bahadur Basnet, Managing Director of Buddha Air says airfare is very low in all sectors of flights, which has been very hard for entrepreneurs to even register a nominal profit. As the expenses in the industry are bloating fast, if airfare is not raised, even the established airlines will be grounded in a short span of time.

Basnet was also worried about unaccountability and harassment from bureaucrats and called for non-interference in decisions making of Civil Aviation Authority in aviation-related policies and their implementation.

As the challenge mounts, entrepreneurs have even begun to plead for merger. "Merging of airlines is the need of the time for their sustainability, effective marketing and low operation costs," says Sunil Shakya, pilot-turned-tourism entrepreneur.

Since the industry is growing at a greater speed, lack of manpower has been yet another bottleneck to make it sustainable. Shakya calls upon the government to set minimum standards and regularize it for operating airlines as the International Civil Aviation Organization (ICAO) policies are also not adequate.

Bharat Basnet, who handles Ggeneral Sales Agent (GSA) for Lauda Air in Nepal, strongly demands the fulfillment of basic infrastructures for sound aviation business. The ill-equipped and underdeveloped airports of the country should be expanded and upgraded with appropriate policies. There are 44 airports including the big and small in the country.

Talking to The Kathmandu Post, M P Khanal, Director of Marketing and External Affairs Department of Royal Nepal Airlines Corporation (RNAC), said that if the entire aviation sector is to be consolidated, national airlines should be strengthened first with re-investment.

Prajwal Shrestha, Executive Chairman of Gorkha Airlines, also agrees that the sustainability question is looming large in the aviation industry. He argues it is high time that the government  provided licence to the private parties only after setting certain criteria and making the viability study of the project.

He also blames that the government has made dual policy in aviation sector by imposing Value Added Tax (VAT). On one hand the government says, VAT will not be imposed on aircraft purchase, on the other , VAT is being imposed on the purchase of raw materials, Shrestha grumbles.

Yagya Prasad Gautam, Joint Secretary at the Ministry of Culture, Tourism and Civil aviation denies any ambiguity on VAT imposed on aircraft's raw materials and asserts that it is government's avowed policy. 

Subodh Rana, Managing Director of Marco Polo Travels, a GSA of Transavia Airlines for Nepal, says if RNAC is strengthened, new markets will be explored abroad, which will help boost domestic aviation industry through increased inflow of tourists. 

"Main bottleneck for the deterioration in the aviation industry at present is the inefficiency of RNAC," he argues. 

As the industry is growing weak, it is compromising on the safety requirements. Trampling with safety measures could be one of the major reasons behind the increasing air casualties. Record shows that, there have been altogether 33 air accidents since 1975 to date (see the adjoining graph). Air passengers are showing increasing concerns for safety, which only an industry with safe future can ensure.   

FM promises farmers to cut lending rates

By a Post Reporter

BHAIRAHAWA, Sept 12 - Finance Minister Mahesh Acharya has assured to provide loans to small farmers at lower lending rates.

"I will try to bring down bank rates on loans to be provided to small farmers", said Minister Acharya speaking at a management transfer program of Small Farmers Development Project (SFDP) run by Agricultural Development Bank (ADB) at Shankarnagar of Rupandehi district on Monday.

He said though the current budget has introduced many packages aimed at uplifting the economic condition of small farmers, there is a need to launch more programs.

"In order to realize the objective of poverty alleviation, the present programs are not enough. More programs needs to be introduced. The only way is to reduce administrative cost and to augment revenue mobilization", the FM added.

Acharya said that the institutions run by the people should be strengthened to achieve the goal of poverty reduction. Some of the poverty alleviation programs run by the state could be operated at a far less expense if run by the locals.

Government has been providing loans to poor (small) farmers through Agricultural Development Banks but the targetted groups complain of delay, influence and commission involved in lending process. And some of them do not have even access to the loans at all.

However, Minister Acharya said that the lending process would be further simplified. But providing loans alone is not sufficient to fight poverty. Women's empowerment is equally important. Women's empowerment is the social revolution, said the finance minister.

Implicitly talking of the under ground Maoists, Acharya said killing each other would never uplift the economic condition of the country. The immediate need of the nation is to have consensus of all political parties on economic agenda and to mobilize the capital of the people in industrial sector, he further said.

Devendra Pratap Shah, General Manager of ADB said that the bank has initiated various programs with a view to reduce poverty. "The poor should have their own institutions in order to identify their problems. Only then poverty can be eliminated", said Shah.

He also said that the bank, mobilizing its internal means and resources, has a plan to expand its branches in order to reach the poor. MP Surya Prasad Upadhyaya said that control of river cutting and expansion of irrigation project could reduce poverty in the district.

The bank has transferred the management of 92 SFDPs to the local people so far. Minister Acharya also inaugurated sub-branch office of the bank at Mahilabar of Lumbini on Monday.

Summit completes 20 yrs  

By a Post Reporter

LALITPUR, Sept 12- Summit Hotel, located in a hillock of Patan, is to celebrate its 20th anniversary next week amid cultural and various other programs.

The hotel was established in 1980 at the active initiation of founder chairman late Doff Noordijk, who took other enthusiastic Dutch  trekkers and mountaineers into confidence to set it up.

It was informed at a press conference today that the hotel came into operation with 28 rooms and some 60 employees, which have gone up to 77 high quality rooms and 170 staff respectively.

Cas F de Stoppelaar, Honorary Consul General of Nepal to the Netherlands and chairman of the hotel mentioned that the hotel aims at providing high quality services and does not intend to be the biggest or tallest hotel of Nepal.

Highlighting the hotel's contributions to promoting bilateral relations between Nepal and the Netherlands, he said that the prospect of tourism development in Nepal is bright. He also urged to expand tourism promotion activities throughout Europe to familiarize Nepal as an attractive destination.

Willem Gulcher, Member of Board of Directors said that a three-day long celebration to mark the 20th anniversary, which starts on Wednesday, would be participated in by a renowned ten-member Dutch band including all board members of the hotel.