NATIONAL 1 (Spotlight Weekly)]

Survival Of The Fittest

Half a dozen new aircrafts are being added to domestic sector resulting in price war

By KESHAB POUDEL

Just a decade ago there were less than 60 seats a day available in the Biratnagar sector but now five airlines are offering more than 300 seats a day in the same sector. The situation is similar in other trunk routes like Nepalgunj and Bhairahawa.

As new private airlines join the fray with government-run RNAC, domestic air market witnesses unprecedented expansion and growth in the passenger movement. Due to the low fare, airlines are losing money in flying to non tourist domestic destinations.

"If the airlines fare is raised, large number of domestic passengers will board the bus. At a time when the domestic market is in such a vulnerable situation, increasing frequency of flights is in itself a strange matter," said an aviation expert.

The arrival of new aircrafts will make the market more competitive and pull down the fare. The question now is how will they survive?

"It is not a question of who will survive but how. When there is a stiff competition, the rule of survival of the fittest applies and the weaker ones will have to go," said Birendra Basnet, Managing Director of Buddha Air. "Some airlines may collapse after this season."

During the forthcoming tourist season which will begin from next week, domestic route may see further escalation in price war with the introduction of new models of aircraft in Pokhara and mountain flights.

Despite the limited market, the government seems to be in no mood to stop giving licenses to new airlines. "We are considering to take certain initiatives to limit the number of airlines and aircraft," told Minister for Culture, Tourism and Civil Aviation to SPOTLIGHT. Strangely, Chataut has already issued a license to another new airlines just a week after holding the portfolio.

Contradictory to the statement of the minister, the Ministry is giving clearance to bring new aircrafts and new airlines. Two new airlines are joining the sector in the coming season.

When the sky was opened for private sector in 1992, the government agreed to issue new licenses after thorough evaluation of performance and other issues every two years. In the first phase, the government issued license to three airlines Necon Air, Everest Air and Nepal Airways.

Due to the political intervention, the policy was ignored and every successive government started to issue licence to new airlines.

In the last eight years, two airlines Everest Air and Nepal Airways have already closed down and some of the airlines are said to be in a very bad financial situation.

"If an airline goes bankrupt, it will be the banks and public who will ultimately lose their money. The time has come to evaluate how much hard currency we are spending to buy or lease new aircrafts," said Basnet.

As more aircrafts and new airlines are coming up, there have been more competition and more closing downs. Can a country like Nepal withstand such a situation?

New Aircrafts

1. Shangrila Airlines Beach 1900-C 2 aircrafts
2. Cosmic Air SAAB-200 1 aircraft
3. Buddha air another Beach 1900-D 1 aircraft
4. Yeti Airlines EMB 120 1 aircraft
5. Necon Air ATR-42 1 aircraft

SITA Air and Sherpa Airlines are planning to operate shortly.

Existing Aircrafts in domestic sector

1. Shangrila Air 2 Twinotters
2. Yeti 4 Twinotters
3. Skyline 2 Twinotters
4. Cosmic 2 Dorniers
5. Gorkha 2 Dorniers
6. Buddha 4 Beach 1900-D
7. Mountain 2 Beach 1900-C
8. Flight Care 2 Y-12
9. Necon Air ATR-42 1, Avro 4 and Cessna 1
10. Lumbini 1 Twinotter
11. RNAC Twinotters 6 and Avro 1

Helicopters

1. Air Ananya 4 MI-17
2. Asian Airlines 2 MI-17
3. Air Manang 2 MI-17
4. Karnali 4 Kawasaki,1 Ecureuil
5. Fishtail Air 2 Ecureuil
6. Dynasty 2 Ecureuil

Government Owned Aircrafts

1. VVIP 2 Superpuma and Bell 2
2. Royal Nepalese Army Skyvan 1, Avro 1, Puma 2, MI-17 1, AS-350 1 and Chetak 1