November 7, 2019 10:01 AM NPT
By: Muna Sunuwar
KATHMANDU, Nov 7: Nepal Airlines Corporation (NAC) is conducting market research on seven international destinations as it plans to spread wings further in the international market.
The national flag carriers is studying destinations like Beijing and Shanghai of China, Dhaka of Bangladesh, Yangon of Myanmar, Hanoi of Vietnam, Phnom Penh of Cambodia, and Colombo of Sri Lanka on which it is conducting market studies.
Even though the officials of NAC had earlier said that direct flights to Guangzhou and Tokyo Narita was likely from December-end, they told a press meet on Wednesday that flights to these two destinations as well as Riyadh of Saudi Arabia could be possible in March 2020 only.
Addressing the press conference, Madan Kharel, executive chairman of NAC, said that Civil Aviation Administration of China (CAAC) will conduct safety audit of NAC in December 2019. “We will initiate the process of applying for flight permission to destinations like Shanghai and Beijing after the CAAC submits its report.”
NAC is in the process of obtaining approval from Japanese Civil Aviation Bureau (JCAB) for starting non-stop flights to Tokyo Narita. “We plan to submit all required documents to JCAB by November 2019,” Kharel said, adding: “The process of appointing GSA for Saudi Arabia is in the final stage.”
Although it has been 16 months since NAC’s two wide-body aircraft landed in Nepal, the aircraft has not been utilized to the best due to lack of destinations. Because of underutilization of the aircraft designed for long-haul flights, the company has been seeing resources crunch. The management’s incompetency to find destinations has put the leadership of the executive chairman of the company into question.
NAC began scheduled flights to Osaka two months ago. It operated two chartered flights to Tokyo Narita – one each in September and October – to prepare for the direct flights. NAC used Airbus A330-200 aircraft for both flights.
“We had to immediately operate flights to Osaka though we were making plans for Narita,” said Kharel. “We hope to get more passengers once we begin direct flights to Narita.”
Stating that the airline profit depends upon revenue maximization and cost minimization, Kharel said that the NAC was working on plans to save the cost through austerity measures and system improvement. The plan consists of cost saving on fuel, re-routing of flights and hotel accommodation. The airlines company plans to save Rs 2.27 billion by the end of FY2019/20 through these measures.
The national flag carrier has projected annual revenue for FY2019/20 at Rs 17.25 billion. It collected Rs 4.29 billion from international operations, domestic operations and ground handling in the first quarter. NAC had mobilized total revenue of Rs 15.14 billion in FY2018/19.
NAC officials also told the press meet that they were working for 80% seat factor assurance in new destinations. It plans to make the GSA refund if the occupancy is less than the stated rate. According to Kharel, seat occupancy rate for international and domestic flights was 81% and 79%, respectively, in FY2018/19.