Air Fares To Increase As airline operators lobby hard

By BMD

Although passengers travelling by air in the domestic sector are benefitting due to seasonal slackness in tourist arrival, they may have to pay a considerably higher air fare once the autumn season begins. Private air operators are already pressuring the government to raise the existing air fare by 25-40 per cent after Nepal Oil Corporation hiked the price of aviation fuel a month back by almost 25 per cent.

At present, a ticket from Kathmandu to Pokhara costs as little as Rs. 900 - Rs. 360 less than it used to. The government has fixed an upper and lower limit on air fares on all routes so as to regulate the fare. Air operators cut down on the fares during the lean season and hike up the prices during the busy season.

Kishor Silwal, general secretary of Air Operators Association of Nepal (AOAN), says the airlines are not able to make a profit due to the increase in fuel prices and other costs.

“Since the air fare has not increased for the last 10 years, it has been very difficult for the airlines to recover even the operation costs. So we have asked the government to raise the air fare by upto 40 per cent to sustain the airline business,” Silwal, who owns Shangrila Air, said.

The government has made it mandatory for the private airlines to operate 40 per cent of their flights to remote and non-tourist areas. But they are often accused of flying mostly to the ‘dollar’ sectors. Flights to the service sector are often cancelled.

Silwal, however, says the private airlines are ready to fly to the service sector once the government allows them to raise the fare. “If we cannot generate even the operation cost, how can we fly to the remote areas?”

Royal Nepal Airlines Corporation has been operating flights to several remote areas. But there are grievances that passengers must often buy their tickets in black. Regarding the price hike of aviation fuel, Ram Raj Upadhyaya, marketing director of RNAC, says the fuel is not the only determining factor in air fare.

“Aviation fuel prices fluctuate throughout the year. Airlines must consider all aspects while deciding the air fare,” he says. As for RNAC, he says that the national flag carrier has no plans to increase its air fare for the time being.

But Birendra Basnet, member of AOAN and managing director of Buddha Air, is of the opinion that the rise in aviation fuel costs has a negative impact on the country’s entire aviation industry.

Basnet says that the existing lower and upper boundary of the fare should be increased by upto 40 per cent so that the airlines can move towards sustainability. He claims that even RNAC cannot operate without revising the present fare rate.

The Civil Aviation Authority of Nepal (CAAN) has already made recommendations to the government to make some revisions in the existing air fare.

Tourism entrepreneurs, especially travel and trekking agents, are worried about the possibility of an air fare hike. They say it will adversely affect their business.

The private air operators were all set to increase the air fare in the dollar sectors by around 25 per cent last year. But they hiked it by only 10 per cent in January this year due to lobbying by the travel, trekking and hotel industries. The dollar sectors could see an increase by another 10 per cent by the end of the year.

RNAC, Ansett Deal Fails

By Our Correspondent

On the eve of its 42nd anniversary, Royal Nepal Airlines Corporation (RNAC) has decided to continue with the lease of the Boeing 757 of China South West Airlines for three more months.

The RA management and the representatives of Ansett Worldwide Service, an Australian company, have been unable to finalize a deal for the lease of a Boeing 767 even after weeks of negotiation.

Ansett had agreed to provide the plane to RNAC at US$ 3,400 per flight hour for 18 months.

Officials of the national flag carrier said that RNAC and Ansett could not reach an understanding since the latter informed that it would be unable to supply the aircraft for at least a month.

But the main bone of contention is said to be the clause regarding aircraft maintenance. RNAC wants the maintenance to be carried out at Royal Brunei Airlines that will push the lease costs up by another $ 200, which Ansett has refused.

But RA officials say the chapter on leasing a plane from Ansett has not been closed. “We renewed the deal with CSWA as we had no alternative. But talks are also continuing with Ansett.”

Three months back, the then Executive Chairman of RNAC had tried to lease an aircraft from the same company without calling a tender. He was consequently fired by the Ministry of Culture, Tourism and Civil Aviation.

With the deal with Ansett being virtually cancelled there is fear that the RNAC may go through another round of controversy while finding an aircraft for leasing.

Nepal’s HDI Shows No Improvement

By Our Correspondent

Nepal is lagging behind its South Asian neighbours in terms of human development index.

The UN Development Programme (UNDP) rated Nepal as showing no signs of improvement in Human Development Indicator (HDI) which states into account health, education and life expectancy among other things.

According to the Human Development Report 2000 of the UNDP, although the country has achieved a slight improvement in its Human Development Index (HDI) rating ... it has retained its previous position at 144 out of 174 nations studied by the report,” the radio report said.

According to the Report, Nepal has the lowest life expectancy among the SAARC (South Asian Association for Regional Cooperation) nations.

Life expectancy at birth in Nepal is 57.8 years on average, 4.2 years lower than the average in South Asian countries. The report calculates the life expectancy of the disadvantaged at just 46 years, 15 years younger than that of the wealthier classes.

But, surprisingly, Nepal is the only country in the world where female life expectancy is lower than that of males.

Nepal’s Human Development Index (HDI) reveals that it is one of only eight countries of the world where more than half of the population lives under appalling conditions due to extreme poverty.

The country’s Human Poverty Index is 51.3 percent and is at par with nations like Mozambique, Ethiopia and Burkina Faso, the report said.

Last year Nepal had gained eight positions in the HDI ranking, but that increment was credited largely to revised methods of calculating the index.

Adult literacy in Nepal has risen by 1.2 percent to 39.2 percent from last year and school attendance is at 61 percent, an increase of 2 percent.

Nepal’s Gross Domestic Product (GDP), at 1,157 dollars, puts the country 11th from the bottom of the ranking, the report said. The ten countries rated below Nepal are all sub-Saharan countries.

The report stressed the need to integrate human rights into national constitutions, giving people the legal ammunition needed to take action when their rights are violated.

“Increased litigation for human rights can create problems if there are too few courts or if judges, lawyers and magistrates are poorly paid,” the report said.

“... every country has some distance to travel in creating a fully inclusive democracy and Nepal is no exception,” it said.