After losing Rs 100m in 7 months, Buddha Air stops Kolkata flights

Published On: December 1, 2019 12:17 PM NPT By: Muna Sunuwar  | @TheMunaSun

KATHMANDU, Dec 1: Buddha Air is flying to Kolkata, India, one last time on Monday.

Despite having a significant air movement between Kathmandu and Kolkata, the privately-owned carrier decided to discontinue the scheduled flight after incurring heavy loss in the last six months.

According to Buddha Air, it lost Rs 100 million by operating 78 flights to and from Kolkata since May.

The decision of the private airline company to discontinue its flights to the Indian city comes amid preparations around the country to celebrate Visit Nepal Year 2020 with a target to bring two million international tourists.

For some experts, lack of promotion of Nepal as a tourist destination partly contributed to the low passengers' turnout that caused financial losses to the airline. They say that it is also a setback to the tourism sector on the eve of Visit Nepal Year 2020. 

The company itself plowed in Rs 25 million in marketing activities.

It was Buddha Air's trial flight before venturing into other long-haul international destinations. But the lack of passengers from highly potential destination resulted into despair for the carrier.

“As the airport in Kolkata is one of the busiest airports in India, we assumed that we would get passengers from the destination,” Birendra Bahadur Basnet, managing director of Buddha Air, told Republica. “Despite having flight price in line with the market trend, the passenger turnout was not up to our expectation.” 

Tourism experts say that the airlines had targeted tourists from West Bengal state of India, but the flow was not satisfactory. They voice that Indian tourists are diverting to other international destinations as Nepal has not been promoted well in the international arena.

“The budget to visit Nepal is around Rs 35,000. With the same amount, they would rather visit Thailand or other destinations,” said Bijay Amatya, CEO of Kora Tours – a Kathmandu-based travel agency. “The economic condition of Indians has improved over the years and they travel out of the country in large numbers. But Nepal has failed to attract them.” 

Basnet shared that not even 2% of the people of West Bengal prefer to visit Nepal, whereas about 30% of them travel to Bangkok in Thailand.

"There is a need to focus more on marketing of Nepal as many Indians still don't see Nepal as a tourist destination,” Basnet told Republica, adding: “Traveling trend in India is growing, but Nepal is yet to bring in Indian tourists in full capacity.” 

Not only did the airline experience slump in international passenger footfalls, the domestic dollar fare passengers decreased by 20% this year. “The trial flight (to Kolkata) taught us a lesson that will come handy for our future operations. It was a lesson we learnt and it will be a lesson for those who want to pursue their business in the similar field,” added Basnet.

An official of CAAN, however, said that airline may decide to resume its operation in the future if it sees better business prospects in the long run.

After withdrawing Kolkata flights, the airline is now focusing on inter-provincial flights. “We will concentrate in the domestic sector,” Basnet said. “We have been minimizing the operational cost in domestic flights and have been increasing flight frequency.” 

Buddha Air is operating flights from Biratnagar and Bhadrapur of Province 1 to Pokhara from January 1 targeting Visit Nepal Year 2020 campaign.

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