Economy News The Rising Nepal (Daily)

RNAC’s route cancellation
Miseries don’t come alone

BY NAVIN SINGH KHADKA

It could not have come at a worse time. Just when tourist arrival has reached an all time low thanks to one after another crises in the country, the national travel trade has sustained yet another severe blow. And what caused the woes? Nothing else than what should have been the travel trade’s safety valve: Royal Nepal Airlines Corporation (RNAC).

The national flag carrier "amputated" its five destinations and an aircraft from its operation network at a time when the national travel industry needed them most. The five member board of the national airline last Friday decided to pull out from its five destinations — London, Paris, Frankfurt, Singapore and Dubai — beginning next month and sent back the leased Boeing 757 of China South West Airlines last Saturday.

The move left the corporation with only two of its Boeing 757s to press in its international routes now limited to few Asian cities. Surely, it was a bombshell for the already troubled travel trade. "This was the most stupid thing to do," said Rajendra Vantava, President of Trekking Agents Association of Nepal (TAAN). "After all the crises in the recent past, it was only now we were getting some positive signals in terms of tourist arrival but it was the same time RNAC chose to take the grave decision."

No matter how riddled it was, and is, with irregularities and loopholes, RNAC still had retained tourism entrepreneurs’ hopes until recently. Travel traders liked to believe the national flag carrier would at least continue flying in tourists from prime market like Europe, even if it did not improve its performance.

The belief was based on simple mathematics. RNAC topped the list of all the inbound international carriers in case of the number of passengers they brought in. It accounted for more than 50 per cent of the inbound tourists by air until the mid-90’s. Things began to wrong in the late 90’s. By 1999, the national airline’s share in bringing in passengers dropped to 31 per cent — 14 per cent less than the 1998 record.

Yet, few had imagined that RNAC would abandon the routes it had been flying since the mid-80’s. What stemmed the belief that the national flag carrier’s performance would improve in these sectors was the fact other international airlines have been faring well in these routes.

Take, for instance, Austrian Airlines that carried in around 12,000 passengers from Europe in 1999 — up by more than four times than the 1998 record. Similarly, Qatar Airways, that flies to the Middle East and then to Europe from Kathmandu, saw an increase of 40 per cent in its 1999 record compared to the previous year.

Clearly, the foreign international airlines were gaining on the pie that once belonged to RNAC.

When RNAC last week walked away from such a lucrative market, the national travel industry’s worst nightmare came true. So, why did RNAC choose to pull out from the European market now only? Or, why did it realise only now that these were loss- making markets and should be jettisoned?

"The corporation was operating in the European sector for the sake of prestige only," said a senior RNAC official. "But now since we cannot even meet the operation cost, it is just impossible to fly to these destinations."

Operating Boeing 757s as it was, RNAC was naturally incurring loss in the European sector. Reason: the narrow-bodied aircraft is not meant for flying as far as Europe. It is best only for regional operations. Then there came other international operators like Austrian Air, Transavia, Qatar Air, and Gulf Air with better aircraft beckoning wannabe Nepal visitors.

In Singapore route, RNAC could never be match for Singapore Airlines and Thai Airways. "That was the reason why we had always been saying that RNAC should operate only regionally," said Narendra Bajracharya, President of Hotel Association Nepal (HAN). "We believe it was a bold move on the part of RNAC to pull out of the European sector."

Now, that it has given up the race, the big question is what would RNAC do with its clients who have already reserved their seats after September 1. "There are two ways RNAC can tackle with the situation now," said Bhola Thapa, President of Nepal Association of Travel Agents (NATA). "Either it can return the clients’ money if it has no ethics and if it thinks it has then it will have to transfer them to other aircraft."

Even as there are unconfirmed information that RNAC has approached different airlines to transfer its passengers of the cancelled routes, there have been no final decisions in this regard. "They did ask questions if we could do that for them," said Joy Dewan, General Sales Agent of Qatar Airways, and who is also the Secretary General of Board of Airlines Representatives in Nepal (BARN). "We have asked them for a proposal and we are yet to receive one."

The national flag carrier may overcome the problem of transferring its passengers who have already booked the tickets to other airlines. But, what in the long run? Will it be pulling out of the five destinations for good? Tourism experts say, that would be counter-productive. "Once you do that, you must forget about entering those markets for at least next five years."

Any way out? "Code sharing could be one option," said Thapa. Even if it would not be operating in these routes, RNAC could allow other international airlines routes to use its codes to operate in these destinations. "That way, both the parties (RNAC and the airline it has allowed to use its code) could negotiate how to bear the operation cost and how to share the profit," said Thapa.

"RNAC will have to take up such measures," said Pradeep Raj Pandey, Chief Executive Officer at Nepal Tourism Board. "Or else it would not be easy to get the re access to such market."

At least not so easily as it delisted five destinations from its operation network last week.

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