National 10 (Spotlight Weekly)

On The Ground

What happens to the RNAC Act, which gives sole traffic rights to the airlines, once it is split into domestic and international entity?

By KESHAB POUDEL

As soon as technical snags hit two of its Boeing 757 aircrafts, those who advocate for the privatization of the Royal Nepal Airlines Corporation (RNAC) were encouraged. Since the temporary cancellation of all of its flights for two days has stranded hundred of passengers in different airports, the airlines credibility has been largely affected.

This is not for the first time that the country’s five-decade-old national flag carrier had to face such situation. But the timing of temporary suspension of flights and technical faults in both the aircrafts gave ample ammunitions for the votaries of its privatization. Two weeks ago, the airlines had to similarly cancel all its flights for few days.

This time too RNAC’s management, in short notice, announced cancellation of all flights for a few days till the complete check up of its aircraft and proof of their airworthiness. Although one of its aircrafts is said to be fit for operation after the replacement of its gear-box, it will take few more days to completely get back to its original schedule.

RNAC airlines : Ignored by policy-makers

Previously whenever RNAC faced such scarcity of aircraft, the airlines used to rent aircrafts from foreign airlines to continue its schedule but nobody showed any interest this time to do so. The question whether RNAC should be privatized or split into two companies is not a major one. The question is what happens to the traffic rights monopoly enjoyed by the RNAC under the existing act, once it is split or privatized.

If government wants to privatize or split the RNAC, it can do so by amending the present act through issuing ordinance or by waiting till next parliament to decide its fate.

The clause 15 of RNAC Act 2019 has given the sole traffic rights to RNAC. No one is allowed to operate air service within the Kingdom of Nepal or outside the country except RNAC and its cooperative. The government can issue license to airlines permitting to operate air service inside the kingdom and outside kingdom. Such permission will be time bound.

Annually, the airlines get tens of millions of rupees equivalent for the ground handling of other international airlines and by selling the traffic rights to other airlines, which have to sign the commercial agreement with the RNAC to operate their service since the traffic rights is with national flag carrier.

In other countries, the national flag carrier’s right is always protected. Even in developed countries, the traffic rights are exchanged under reciprocal basis. “Instead of strengthening the national flag carrier of land-locked country, our prime minister and other policy makers prefer to fly by foreign airlines,” said an aviation expert.

In the last twelve years, politicians have scandalized the RNAC on the question of leasing short term aircraft but no body has ever seen it in terms of the rights it enjoys in the international sector.

Mired in a number of unnecessary political controversies the country’s only national flag carrier is on the process of verge of ruin.