|
|||
|
|
|||
|
COVER STORY |
TOURISM Nepal’s tourism industry suffers a major setback as Royal Nepal Airlines Corporation (RNAC) decides to suspend flights on its European and other sectors. After it cancelled an agreement with China South-West Airlines, RNAC is in no position to continue serving its regular routes with its two ageing Boeing 757 aircraft. Over the past decade, RNAC has been the victim of continual attacks by politicians. By stepping into the ring, the Public Accounts Committee and the Commission of Abuse of Authority have completed the process of destroying the national flag carrier. By KESHAB POUDEL Nepal’s tourism industry has survived on hope for a long time. Even hope has become a luxury these days. The tourism sector is on the verge of collapse after the Royal Nepal Airlines Corporation (RNAC) suspended its regular schedules on the European sector. Having survived even the fiercest assaults over the last two years, RNAC’s decision has come as the proverbial last straw on the back of the tourism industry. The hijacking of an Indian Airlines flight in December 1999, a series of bird-hits in October 2000, the hotel workers’ strike in November 2000 and January 2001, the widespread negative publicity generated by anti-Indian activities triggered by anti-Nepal remarks attributed to Indian film star Hrithik Roshan — which he consistently denied making — successive Nepal bandhs, the royal palace killings and bomb scares all contributed to driving tourist arrivals to unprecedented lows.
Although many other international airlines have proposed to increase the frequency of their flights from Europian destinations withdrawn by the RNAC, it is not easy to recover the vacum created by the suspension of the flights by national flag carrier. Quatar, Transavia, Lauda and Aeroflot remain four airlines which fly to Europe from Kathmandu. ìWe have already received request from some international airlines which want to increase the frequency following the withdrwal of flight by the RNAC,î told a senior official of Ministry of Culture, Tourism and Civilaviation to Spotlight. The cutback in flights by Indian Airlines from July hampered the recovery efforts made by Nepal Tourism Board. RNAC’s latest move will further reduce the number of tourists visiting Nepal. Britain, Germany, France, the Netherlands and Italy occupy 7.31 percent, 5.39 percent, 5.06 percent, 2.85 percent and 2.60 percent of total tourist arrivals respectively. The number of tourists is bound to plummet after flights to the major markets are suspended.
RNAC’s move was expected even before the formal announcement was made. After the cases filed against board members in the Lauda Air deal and accusations of irregularities made by the Public Accounts Committee in the leasing of a China South-West Airlines aircraft, nobody was in a position to retain the leased jets for too long. Although other international airlines will undoubtedly step in to fill the gap, Nepal’s tourism industry can hardly expect to recover by depending on carriers belonging to other countries. Along with Qatar Airways, Lauda and another airlines from Netherlands are operating direct flights from Kathmandu to London and other European destinations. Emirates and Pakistan International Airlines also have direct links to European cities. But who knows when foreign airlines will start seeing thinning profit margins and eventually decide to pull out? Indian Airlines’ decision to cut the number of its flights shows how vulnerable it is to depend on foreign carriers. "Other airlines may fill the gap created by the cancellation of flights by the RNAC, but these are not as dependable as the national carrier," said Tek Bahadur Dangi, marketing director of Nepal Tourism Board. "We need to have our own strong airlines to provide reliable service."
It doesn’t look like the much-hailed truce between the government and Maoist insurgents will help the tourism industry. The sector can just forget about making a recovery for the time being. RNAC officials are not alone responsible for the present plight. After the punishment meted out to senior officials involved in the leasing of the Lauda aircraft, no official or minister is willing to take any major decision. The Commission for Investigation of Abuse of Authority’s (CIAA) decision to warn the prime minister in the case has multiplied the risk factor involved in files reaching the cabinet room. "Who will take risks at a time when officials are indicted for causing losses during the course of operating flights? If I continue flights to Europe incurring losses, who can guarantee that the CIAA will not file a case demanding that I compensate for the loss," said a senior executive official of the RNAC, requesting anonymity. "If we continue operations with our own two aircraft, we might not make money. But, at least, we won’t have to face any kind of risk." The CIAA’s indictments in the Lauda Air case are based on losses incurred by leasing the aircraft rather than on any acts of corruption or irregularities. This anomaly is responsible for the present situation. "We will operate the aircraft we have. Why should we have to go to the Public Accounts Committee and Commission of Investigation of Abuse of Authority for taking decisions that might benefit the country?" another official said. Private airlines, too, are feeling the heat. "Fewer flights mean fewer tourists. If the number of visitors goes down drastically, many private airlines will suffer," said Birendra Basnet, managing director of Buddha Air. "Some airlines may just have to close down."
When the government-Maoist truce was announced, tourism entrepreneurs breathed a sigh of relief and had started plotting a tourism promotion strategy. The royal palace massacre and subsequent events sent negative signals in the international market. As a result, tourist arrivals plunged in June and the first week of July. Encouraged by the upswing in the second week of July, tourism entrepreneurs were becoming cautiously optimistic of a recovery. RNAC’s decision ensured that the optimism was short-lived. "RNAC’s move to discontinue flights on the European will have a major setback in the tourism industry. We will be forced to close down hotels if the government does not take necessary steps to restore those flights," says Narendra Bajracharya, president of Hotel Association Nepal. "As tourist arrivals over the last two months have gone down drastically — the arrival of Indian tourists alone has plunged by 72 percent — it is impossible for us to do business." By firing shots in unproven allegations of corruption in the leasing of aircraft, the CIAA has ruined the country’s two major tourism components, RNAC and hotels. "Look at the irony. All this damage was done by an anti-graft watchdog headed by someone accused of abuse of authority during his tenure as secretary to the Ministry of Agriculture," says a political analyst. Double standards on questions of morality have exacted a heavy price from the tourism industry. The decline in the number of Indian tourists is understandable, because Indian Airlines has cut its flights to Kathmandu from New Delhi, Calcutta and Benaras by half. Maintaining the share in western markets should ordinarily have been high on RNAC’s priority list. But these are not ordinary times. At a time when available seats are low, one cannot expect high growth in tourism. RNAC’s flight cutback comes just a few months before the tourist season, which has sent shock waves through the industry. The RNAC management has other compulsions to cancel the flight, as it has terminated the lease with China South-West effective August 5, 2001. "How long we can operate flights on the European sector losing such huge amounts of money? RNAC has lost more than Rs.750 million in the European sector in the last 10 years," a senior RNAC executive told SPOTLIGHT on condition of anonymity. In its announcement, the national flag carrier has made it clear that it is in no position to operate flights on the European and other sectors with its two Boeing 757 aircraft after the cancellation of the agreement with China South West. It has already suspended flights to Frankfurt, London and Paris in European sector and Dubai and Singapore in the Asian sector. Although a group of tourism entrepreneurs has met Prime Minister Sher Bahadur Deuba to demand the restoration of the European flights, he is yet to take any kind of decision right now. Aware of the plight of his predecessor, Girija Prasad Koirala’s, in the Lauda Air deal, Deuba may simply avoid getting involved in a highly controversial matter. Some RNAC executives say there is a slim chance of improving things, but want the government to make honest commitments. "If we receive strong assurances from the government and written directives, then we may be in aposition to rearrange the flight schedule. However, we don’t want to put our career on the line. If we take initiatives to normalize the flight schedule, the PAC and CIAA won’t lose time in launching a probe," said a senior RNAC official, requesting anonymity. At a recent meeting, the director of Nepal Administrative Staff College disclosed that no secretaries and senior officers in government ministries and departments are in a mood to take decisions because of overreaching approach of the PAC, State Affairs Committee and CIAA. "There is a growing mentality in favor of not working. Whenever a ministry or department takes a decision, officials fear they might be summoned by the PAC, State Affairs Committee and the CIAA at any time," said Sambhu Saran Kayastha, at a meeting organized by the State Affairs Committee. In RNAC’s case, this psychosis is at full play. In the last decade, whenever RNAC has taken an initiative to lease aircraft, the PAC and CIAA have summoned senior officials. "We will not take any new decision until something concrete finally comes from the minister or the prime minister," said another RNAC official. According to RNAC’s press release, the carrier will continue its flight to Osaka, Shanghai, Hong Kong, Bangkok, New Delhi, Mumbai and Bangalore. However, with just two ageing Boeing 757s on its international fleet, tourism entrepreneurs are questioning whether flights on these sectors will be regular. If one aircraft hits a technical snag, the whole schedule will be hampered. "I don’t think tourism will be a viable industry at a time when the national carrier itself is in the doldrums," said a tourism entrepreneur. Although other international airlines may add flights, no one can predict when they will suspend it." The fortunes of RNAC began heading downhill soon after Girija Prasad Koirala, during his first tenure as prime minister, approved the sale of the carrier’s two Boeing 727s at throwaway prices, paving the way for leasing aircraft. All successive governments used RNAC as a milching cow that brought hefty commissions along with every new lease deal. Unfortunately, the CIAA this time filed cases against the tourism minister and half a dozen RNAC officials, including a former executive chairman and board member, on the ground of incurring losses, not for committing any offense of corruption and irregularities. The case has had a knock-out effect on the wider administration, virtually ruining the decision-making process of countless institutions like RNAC. "There are still many ways of improving the performance of RNAC. If the airline’s officials are allowed to work independently, they can manage the airlines efficiently and start bringing in profits soon," says an official. "I think RNAC can still recover from this trauma." However, that kind of optimism is very hard to come across. After 10 years of endless cases of commission, omission and political intervention, RNAC has completed the circle to destruction — dragging down the tourism industry as well. ‘If Other Airlines Bring In Tourists, We Won’t Have To Worry’ — NARENDRA BAJRACHARYA President of Hotel Association Nepal (HAN) NARENDRA BAJRACHARYA sees the RNAC’s decision to suspend flights on the European sector as a bold step. Bajracharya just want a system put in place under which tourists booked on RNAC should be able to come to Nepal. Bajracharya led a team to Prime Minister Sher Bahadur Deuba and other government officials to demand appropriate measures to control the damage from the flight suspension: Excerpts from an interview with the HAN chief: As a tourism entrepreneur, how do you see RNAC’s decision to withdraw from the European sector?
Despite its negative impact on the tourism industry, the RNAC management’s decision to withdraw from the European sector is a bold one. According to the RNAC management, they will save millions of rupees after pulling out from the European route. There is no reason to continue flights incurring loss. As a hotel entrepreneur, what I want is more flights from Europe. The duty of the RNAC management is to make alternative arrangements to transfer its booking to other airlines. If RNAC can accommodate the passengers in other airlines, Nepal’s tourism would not have to suffer much. Don’t you think RNAC’s withdrawal from such a vital route would have an adverse impact on Nepalese tourism? The RNAC management has assured us that they will make alternative arrangements to transfer the bookings made with RNAC. If other airlines bring tourists, we don't have to worry. We want more tourists. We don't care which airlines bring them. Why are you so sympathetic to RNAC? When the executive chairman briefed us about the situation, we came to realize the huge loss incurred by RNAC on the European sector. If RNAC cannot make money, how can we ask them to continue their flights? How do you see the role of RNAC in the European sector? Over the last few months, the number of passengers coming to Nepal via RNAC has drastically declined. RNAC’s executive chairman informed us that the carrier would have to transfer 5,000 passengers to other airlines. According to the RNAC management, their aircraft carried 570 tourists a week from the European sector. If you see RNAC’s decision as bold, they why are you calling on the government to make other arrangements? We are concerned about introducing alternative arrangements and met officials for this purpose. RNAC can support in arranging other carriers, by giving its flight to other airlines. If alternative arrangements can be made, hoteliers won’t have to worry. Do you believe RNAC will make alternative arrangements? They have to make alternative arrangements within 10 days of rescheduling their flights. RNAC management should move positively toward an alternative system. When you met the prime minister, minister and other officials, what was their response? I saw a very positive response. The new budget has termed hotels as a sick industry. This policy shift will play very a positive role, as the tourism industry will take another two or three years to make a recovery. What will be the impact of truce between government and Maoist insurgents? We view the truce very positively. After the cease-fire, we have extended the Festival of Life program to attract more tourists from India. The tourist arrivals will increase. How do you see the future of tourism in Nepal? If peace continues to exist, tourism will recover soon. The arrival of tourists will start to increase. I think the talks between the government and Maoists will result in an amicable solution. No Flight, No Exposure After the withdrawal of RNAC from the European sector, pilots and other senior officials have lost opportunities to gain exposure. Human resources development in RNAC is set to suffer. Condemning the practice of leasing aircraft, RNAC pilots and other officials appear to have hurt themselves. In the airlines business, loss alone cannot be a valid reason to withdraw flights. Until the regular service to Europe, RNAC pilot got opportunities to take off and land at such leading international airports as Frankfurt, Paris and London. Marketing and other administrative staff stationed at these cities also got the opportunity to learn international practices and trends. Suspension of flights means missed opportunities for junior pilots and staff. It will take many decades to develop professional and technical capability to fly on the European route. Some RNAC pilots seemed to be happy that the airline finally pulled out of the European route, arguing that management and politicians cannot spend time leasing aircraft. After RNAC management’s decision to lease wide-body aircraft, Nepalese pilots were barred from going to Europe. "The decision to pull out of the European sector is a good one, since RNAC incurred huge losses annually," says a senior pilot on condition of anonymity. Other see the decision as major setback for RNAC and the country. "Not only the RNAC, Nepal has lost something it achieved after investing a lot of money," says an aviation expert. "If loss is the only criterion to judge the performance of an organization, then every corporation in Nepal should be closed down." The government still has time to rescue RNAC from total ruin. If the government is sincere about preserve RNAC, it must intervene in the management and make necessary arrangements to add new aircraft. Otherwise, Nepal’s national flag carrier might find its wings limited to Indian cities. Bridge To The West Over the years, RNAC has played a major role in bringing tourists from Western Europe to the kingdom. According to the Nepal Tourism Statistics 1999, RNAC shared 43.3 percent of tourist arrivals in 1988, 39.5 in 1989, 42.4 in 1990, 41.2 in 1991, 42.1 in 1992, 40.3 in 1993, 42.5 in 1994, 43.3 in 1995, 39.8 in 1996, 39.8 in 1997, 36.0 in 1998 and 29.3 in 1999. On the European sector, despite introduction of daily flights by Qatar Air, RNAC carried the largest number of tourists in 1999. According to the report, Qatar Air carried 9,541 tourists from UK compared to 6,676 by RNAC. RNAC brought in 4,087 French, 4,087 German, 3,093 Italian, 1,888 Swiss, 1,537 Spanish, 1, 998 Dutch tourists and 336 from other countries in 1999. RNAC carried 28,530 European nationals in 1999. Qatar Air carried 19,865 tourists from Western European nations. |
Send your feedback to the
editor: spotligh@mos.com.np |
