NATIONAL 3 -(Spotlight Weekly)

Journey To Recovery

Mired in controversy for years, Royal Nepal Airlines Corporation is on a flight to renewal

By A CORRESPONDENT

After years of controversy, disruption of flights and accumulation of huge losses, Royal Nepal Airlines Corporation (RNAC) is on the process of gradual recovery. Although the cancellation of flights to Europe and some Asian destinations have created panic in the tourism and export business sector, the new schedule is expected to help the carrier to improve its financial position.

Regular political intervention and legal troubles generated by the House of Representatives Public Accounts Committee and the Commission of Investigation of Abuse of Authority, have forced RNAC, the country's oldest airline with an experience of more than four decades in the international and domestic sector, to make desperate moves to survive as a regional carrier.

RNAC : Backbone of tourism

Thanks to the "unfortunate" but bold decision taken by RNAC Executive Chairman Rajesh Raj Dali and his management team, the airline is now gradually injecting a feeling of confidence in the international sector that Nepal's national flag carrier can be reliable and on time.

From the brink of virtual bankruptcy and closedown, RNAC is trying hard to remold itself into an economically sustainable airline. RNAC fell on hard times following the sale of its two Boeing 727 aircraft a decade ago. Since then, the airline has relied mostly on leased aircraft to serve Europeanand other sectors.

RNAC officials claim that the airline has improved its reliability and punctuality. The carrier’s two 757 aircraft may be ageing, but they have been able to maintain their schedules.

"We do not have to bear any additional liability as we are operating our own aircraft in the remaining sectors," says Executive Chairman Dali. "Right now we are gradually in the process in achieving economic sustainability. The cancellation of flights on the European sector has paved the way for the proper utilization of our two aircraft in the proper sectors." According to the RNAC management, the two aircraft are now flying an average of 300 hours, which is considered optimum utilization.

Despite the reduction of the sectors, the number of passengers has increased by several folds in recent days. The occupancy rate on RNAC's aircraft was below 50 percent when it had three aircraft. Now it is more than 70 percent. Since tourist arrivals are gradually increasing, the RNAC management hopes the coming season will be more profitable.

When RNAC has three aircraft, it operated 28 flights a week, including those to Europe. Now the two aircraft are flying 23 flights a week to Mumbai, New Delhi, Osaka, Shanghai, Hong Kong and Bangkok.

RNAC has limited itself to the region. If it is allowed to operate without intervention, the airline may in a position to expand its flights. After the cancellation of the flights to Europe and other routes, the carrier can now concentrate on more traditionally profitable sectors.

RNAC sustained the European sector five years ago when Lufthansa suddenly withdrew its flights to Kathmandu. "Along with the tourism sector, the discontinuation of the flights on the European sector will hamper export business, which is going to be unrecoverable," says Rabindra Man Singh, president of Nepal Freight Forwarders Association. "RNAC's flights to Europe have played a very important role in increasing the export of Nepalese carpet, garments and handicrafts."

As the airline has a pool of competent manpower in the technical, management and marketing fields, what it needs is its own aircraft. "RNAC needs to have a well-equipped and suitable aircraft, if government want us to continue flights in the European sector," says Executive Chairman Dali.

From the verge of collapse and economic bankruptcy, RNAC is desperately making efforts to survive as a sustainable airline. If political leaders learn their lessons correctly and stop intervening in RNAC’s management and operations, the national flag carrier may re-emerge soon as a sustainable and economically strong institution.