Birendra Bahadur Basnet
MD, Buddha Air (P) Ltd.

What would you say if a commerce graduate who failed as a farmer comes up with a proposal to set up an airline? "Outrageous", may be your answer. But Birendra Bahadur Basnet (BBB), the MD of Buddha Air (P) Ltd. that commands about 45% of the domestic air travel market in terms of passenger number and seems to have ducked the global downtrend in air travel, has proved that operating an airline is far easier than agriculture.

The secret behind the success lies in the systems, the technology and teamwork, says Basnet when asked to comment about it. "Then of course the education from Budhanilkantha School", adds this member of the second batch of students who passed the SLC from this British-styled premium educational institute of the country.

But the beginning of the airline was not so pre-planned as one may expect it to be while looking at the nature of the business. Basnets, who were struggling with commercial farming in an eastern Terai village, entered airline business as they had to start something.

As BBB recounts, it was the time when his brother Sivendra Bahadur Basnet had just returned from Russia after completing a training in  piloting MI-17 helicopter and had started a job in a helicopter company drawing Rs. 100,000 as monthly salary. Meanwhile, BBB was working in an NGO for a monthly salary of Rs. 10,000 after, as he describes it, a failed business venture in commercial farming. However, the farm had enriched him tremendously in terms of experience. Another equally important aspect about the situation was that, as BBB recalls, the family was facing cash crunch and had already started selling the land that they owned at various prime locations in the country.

Looking at the others doing good business in it, the brothers proposed to their father, a senior politician in the Rastriya Prajatantra Party, to set up a helicopter company of their own. For that they partnered with two Marwari families from Jhapa and Biratnagar, named the company Buddha Air, estimated the total investment requirement at Rs. 10 million, divided the equity 30% each among the three parties setting aside 10% to an expert on the field and put in Rs. 800,000 each to start the business. Basnets arranged that by selling a plot of land at Duhabi in eastern Nepal. With the money, younger brother Basnet and the two partners went to search for the helicopter, but in the meanwhile, the government changed the rule that the MI-17 helicopters would not be allowed to operate passenger services.

Then Basnets decided to go for fixed wing business and selected Beech aircraft that had just come into the market and was regarded the most advanced technology craft. But the project cost was too high. Meanwhile the partners left the company and as Basnets had decided to go on their own they paid the departing partners their investment. "Thus our Rs. 2.4 million was stuck", recalls BBB.

Though the Beech craft were very costly, a teacher of BBB who was in the board of Employees Provident Fund, promised to help. However, there was a problem: The Fund could not invest on its own: it could only participate in a consortium with other banks. Then BBB approached Nepal Bank of Ceylon (now Nepal Credit and Commerce Bank) and the Sri Lankan MD said he would help provided that the feasibility study was done by Nepal Sri Lanka Merchant Bank. The cost of the feasibility report was Rs. 1 million that they charged calling it "the success fee" after the airline company was granted the loan. Despite the hefty cost, Basnet was happy.

"That was a miracle for us - to get the finance even though we were not technically expert in the business. But then onwards, everything has been a miracle", notes BBB with a proud smile. Though the airline business throughout the world, and also in Nepal, is reporting dwindling sales, Buddha Air is reporting just the opposite. "Just last month we became a zero-debt company", he notes.

The case of BBB becomes more interesting when seen in the context that he was a totally nontechnical person in the airline business and his brother Sivendra, who had some technical expertise in the field, had separated himself from the business soon after Buddha Air became operational. Moreover, Sivendra set up his own company - Mountain Air - operating the same aircraft - Beech - thus competing directly with his brother. Now Sivendra's company has closed down its operations, while Birendra's is flying high.

Making of BBB

After completing SLC from prestigious Budhanilkantha School, five or six years were full of trials for BBB. His father enrolled him into a Science College to prepare him for the profession of an engineer. But he recalls that he could not find himself comfortable with Physics, the subject mastery over which is very important to become an engineer. Then he gave it up and went first to Delhi and later to Benaras to enrol at grade XI to pursue Commerce, but he could not adjust there as he found that all the other students were too younger to him. So finally, he appeared for the Intermediate of Commerce exams as a private student and passed out.

Upon coming back to Nepal, his father sent him to Calcutta to learn about fishery that he was planning to add to the multipurpose agricultural farm they had in the village called Dangihat about 50 Km east of Biratnagar. He started using that learning at the farm and at the same time joined Mahendra Morang Campus at Biratnagar to pursue B.Com. During the weekends, he would go to the farm. "The seven years [1986-1993] as a farmer were very valuable to me, as it was during this period that I learned very important lessons in business management by making several mistakes", he recalls. 

As to the examples of the mistakes, he recalls that he was too rigid in prices due to which a lot of the produce would not sell.

Though he later joined MA classed in Economics, he is yet to submit his thesis. Then he started a business with his friend's brother to export handicraft garments, but left it as his partner breached the contract.

Then they tried to sell the land at Jawalakhel so as to generate the cash for family expenses, but was not getting the party when younger brother Sivendra Basnet returned with the helicopter pilot's training. And the entire story took a new turn.

Politics

Now that BBB seems a contented person businesswise, what would be his next project? He does not give any indication. However, while considering the political background of his father, politics may be a possible field that BBB would enter. Though he does not give any direct hint about it, one fact indicates to his political ambition. He has recently completed a detailed survey of Dangihat VDC (covering 100% households, as he claims) and hopes that it gives him opportunity to plan appropriate programs for his home village. These programs may be the beginning of BBB's career in politics.