Flying low

The Royal Nepal Airlines Corporation (RNAC) is supposed to fly high, not low. Unfortunately, it is sinking in the thick and black cloud of political interference, mismanagement and corruption. Sad but true, the mismanagement of the national flag carrier grew exponentially in the post-1990 period. RNAC rapidly became a political recruitment centre and a corporation for skimming commission for the political parties. Not a single party, in the post-1990 period, has come out of the civil aviation ministry clean and untainted. Corruption scandal has become its signature.

It’s widely believed that political parties deliberately installed a system that would perennially supply funds to the political parties. Wet lease is a case in point. Starting from 1994, RNAC has leased over 19 aircraft but never decided to buy one, though that would have been far economical in the long run. And each time it leased an aircraft cases of corruption were reported. If RNAC had decided to buy an aircraft instead of leasing it a number of times, it could have bought its own jet with the millions it spent on leasing. While the other international airline companies that started off at the same time as RNAC did – Thai Airlines is a case in point – have become leading airlines companies in the world, RNAC is sinking under mounting debt and corruption.

However, it would be a mistake, as many make, to see RNAC purely as a financial burden on the treasury. In fact, it is more of a political liability. If the political interference has bankrupted the corporation, it has also, in return, bankrupted the integrity of the political parties. Minus the infamous Dhamija, Lauda, Chase Air and China South West Airlines scandals of the last twelve years, the history of RNAC does not look that bad. That, however, does not purge the RNAC of its sins. If RNAC is both the financial and political liabilities and an average Nepali never boards an aircraft, why then, and for whose interest, are we running the corporation? Clearly, not for the interest of those having political clouts.

It does not make any sense, why the past governments of the Nepali Congress, a staunch advocate of privatisation of the loss making enterprises, did not dare to hand over RNAC to competent hands. It is a classic case of betrayal of people’s mandate that a "socialist democratic" party’s government privatized an Agriculture Tools Factory while keeping the loss making airlines corporation under the government ownership. Till the end of the fiscal year 2000/2001, out of the total investment of 199.33 billion rupees, the rate of return has been only 1.27 percent. Likewise, the return on RNAC’s loans of 57.26 billion rupees till the end of the fiscal year has been meager 0.32 percent.

Given such a grim record, a task force led by Dr Shankar Sharma, Vice Chairman of the National Planning Commission, had recommended converting RNAC into a public limited company as one of the options to clear the mess. It is indeed encouraging to hear Assistant Minister for Tourism and Civil Aviation Ravi Bhakta Shrestha, saying that the government is seriously contemplating to convert RNAC into a public limited company with a majority of shares floated to the private sector. Hopefully, it would not be a case of good words gone bad.