Govt should have definite policy on airlines

Deep Mani Rajbhandari is the managing director of Necon Air, probably the most successful private airline in the country, and a leading entrepreneur, mainly in the aviation sector. Born in Kathmandu in 1955, he got his commercial pilot’s license from Messem School of Aviation, Texas. Beside being the president of the Airlines Operators Association of Nepal, he is also the managing director of NecoInsurance, an insurance company and director of Nedrill, a joint venture company with Danish IFU, IWAC, HMG of Nepal and Agriculture Development Company. Widely travelled both in Europe, Americas and other countries, he has experiences in airlines, resort hotel,  water well and geological drilling and insurance. Last week, Rajbhandari talked to The Independent about the airline business and about his own airline, Necon Air. Excerpts:

Q. Necon Air seems to have a pretty good reputation among the private airlines operating in the country. How would you evaluate your own airline?
A. We basically concentrate on punctuality, reliability and customer service. On the technical part, we are pretty experienced and our technical manpower is very competitive. That is the reason why our technical despatch is very good — it is almost 99 per cent perfect..

Q. What is your view of the private airlines in the country, what with new ones coming up and several old ones  closing down that is leading to doubts about the sustainability of the private airlines?
A. With privatisation and free economy becoming the catch words, government gave license to many people thinking it would be unfair to give license (to run the airline) to some and deny others. As a result, many airlines came up, and  many closed down. This is also a part of the business. But our main concern is that if you want to open any business like a bank or an insurance company, there has to be certain criteria; the government should have a definite policy on airlines - both on the technical and non-technical aspects.

Q. Do you mean to say that there is no criteria for opening an airline?
A. None. Now, opening an airline is as easy as opening a taxi company. But we have been trying from our side. This is not a healthy environment. Even regarding the policy, there is one, but that policy, which was brought out 8 years ago, has outlived its utility.

Q. You just talked about healthy environment, what is the situation now among the private airlines?
A. Recently, there is an act - consumer protection act. After the act, there should be no cartelling. Certainly, there is no cartelling as far as fares are concerned. But there are other things. Recently (June 8),  Nepal Oil Corporation increased the price of aviation fuel by 25 per cent, which may kill the aviation industry.

Q. In the last several years, there have been several accidents involving the private airlines leading to allegations that the private airlines have failed to maintain proper safety standards. What do you say?
A. There are two parts — accident is one part, and how it happens is another. All airplanes must be air worthy, according to the rules of the civil aviation and the maintenance schedule of the manufacturers. Whenever a plane is not airworthy, it does not fly at all. Because the civial aviation authority have a system of daily inspection of the aircraft before it takes to the sky. Similarly, there is also a system of 200 hour check. Some aircrafts have 50 hours check, some have 200 hours check and there is also a system of checking the engine after a definite hour of flying. If that is not done, the aircraft does not fly.

Q. But some time ago, the civil aviation authority during sudden checks found some slips - log books were not maintained up-to-date.
A. No, there have not been any major finding of fault. What the civil aviation found were some minor components that were malfunctioning; and such slips were corrected immediately. But I don’t think any airline has overlooked major things such as the checking of the engine.

Q. That means, there has been no compromise on the safety?
A. I don’t think so. You can see so many planes at the far end of the airport, being maintained and repaired. But accident is another part. It may be due to human or mechanical error and there are so many other things involved. So, it is very difficult to say how an accident happens. But it is certainly not due to the aircraft being not airworthy.

Q. There have been talks of several Nepalese private airlines going international but so far, your airline is the only one to fly across the border. Do you have any plans to expand your international flights?
A. First of all ours is the only private airline to go international. We are planning to start flights to Varanasi before the 20th of this month using ATR three times a week. At this stage we also plan to have our own ground handling operations at Varanasi and we have received the permission.

Q. However, domestically, the private airlines are being accused of going to only the lucrative sectors. How would you defend such accusations?
A. I don’t understand why this accusation is being made. Quite naturally, one of the main motives of  private airlines is to make profit. I am also in the board of the Nepal Civil Aviation Authority, and I have asked them why don’t they increase the landing and parking fees at lucrative areas like Lukla, Jomsom, and with that increased revenue, let the RNAC run the show in other remote areas. Although there is a provision of a 60:40 ratio and according to the provision any airline should have its flights to the tourist and non-tourist sector at that ratio. But the Civil Aviation Authority has not been able to implement that provision. But, it would be wrong if the government wants to force the private airlines to go to the non-profitable sectors.

Q. Do you see any possibility of any kind of cooperation, in technical and other areas, between the private airline and the RNAC?
A. I don’t think so. Nobody has ever thought about it.

Q. Talking about the aviation policy, you said the present policy is outdated and needs to be reviewed completely. What provisions do you think should be incorported in the aviation policy?
A. First of all, the fares should be defined according to the market scenario. Presently, the fare structure is protected by an upper and lower structure. You can not go down below the lower limit and also not above a certain limit. So, the market has not controlled the fare; whereas the landing, parking and the fuel price has been controlled by the government and they are being increased. This is an unhealthy situation.

The government needs to develop training centres for the aviation sector. These are several things which needs to be addressed by the aviation policy.

Q. In the last several years, more than two dozen airlines have been given licenses, and some airlines have been operating with just one plane or helicopters. Do you see any possibility of forming something like a consortium among the private airlines?
A. I don’t think so. The main reason is that most of the airlines are run by individuals or are family businesses. Ours is the only airline which is a public limited company with more than 10,000 shareholders. So, it is very difficult for them to come together.

Q. What plans do you have for the expansion of Necon air?
A. We have already planned that within one year we will get an additional two or three ATRs, and we are going to replace all the Avros. Currently, this airline has one ATR, three Avros and one Cessna caravan. Presently we are flying upto 350 nautical miles. We are also discussing with the government to allow us to fly to 1,200 nautical miles. Within two years time, we are going to bring two jet aircraft and then we will be able cover 1,200 nautical miles; that means destination wise we can fly to Bangkok and Mumbai.