‘Inferiority complex in aviation sector impedes growth’

Sugat Ratna Kansakar. Photo: Balkrishna Thapa Chhetri/ THT

Nepal Airlines Corporation received its first-ever wide-body aircraft — Airbus A330-200 — on June 29 while it is scheduled to receive the second aircraft of the same make on July 26. The addition of the two new aircraft to NAC’s fleet will not only help strengthen the national flag carrier’s capacity to fly to international destinations but will also help boost tourism into the country. Tourism entrepreneurs have been saying that Nepal has not been able to receive the desired number of foreign travellers due to lack of air connectivity for long. So, NAC’s expansion is expected to also help solve that problem to a large extent. Sujan Dhungana of The Himalayan Times caught up with Sugat Ratna Kansakar, themanaging director of NAC, to discuss operational aspects of the wide-body aircraft and future plans of the corporation. Excerpts:

NAC has received its first wide-body Airbus plane and is on the verge of receiving the second one soon. How will these long-range aircraft strengthen Nepal Airlines?

The share of Nepal Airlines in the international flight segment among the airline companies that operate at the Tribhuvan International Airport today stands at around 10 per cent. The remaining market share is occupied by nearly 24 other foreign airline companies. After the two wide-body aircraft are brought into operation, NAC expects its market share in international flight business to grow by five to six per cent. Nepal Airlines will undergo strategic shift along with the addition of the two wide-body aircraft in its fleet, with more focus on Nepal’s tourism sector. Wide-body aircraft have enormous benefits in the country’s tourism sector and also the entire economy, which many people fail to realise. There are still a few people who are sceptical about NAC purchasing wide-body aircraft. They say that the national flag carrier might face a business risk with the addition of these new long-range and expensive aircraft. But then, there are risks in any business and it is all about managing those risks and having a contingency plan. We have done thorough homework and I can say that the new Airbus A330-200 aircraft have numerous benefits. These long-range planes can fly continuously for over 10 hours —meaning these aircraft can fly non-stop to Japan, Korea and a few European nations. NAC mainly chose the Airbus A330-200 over other aircraft was due to its long flying capacity. As Nepal Airlines plans to eventually fly to European nations, these 274-seater wide-body aircraft will play a significant role to tap European tourists. A few people had even questioned the ability of NAC to operate wide-body aircraft. But such inferiority complex impedes the growth in any sector.

When will these two long-range aircraft start commercial flights?

The second aircraft is scheduled to arrive on July 26. As per international practice, new aircraft are operated to existing destinations for a few months prior to flying to new destinations. Thus, these aircraft will fly to existing destinations like Doha and Qatar for the first couple of months. By then, we will have all logistics ready to operate these aircraft to Seoul of South Korea and Narita of Japan. Gradually, we will fly these aircraft to Saudi Arabia and other new destinations.

It is said that seat occupancy of NAC flights is not satisfactory. How can you assure that these new wide-body aircraft will fly with full seat occupancy?

The truth is that NAC’s average seat occupancy in international flights is above 75 per cent, which is the global average. It might be challenging for Nepal Airlines for a few months to fly the new wide-body aircraft with full occupancy, but we are confident about these aircraft gradually witnessing good seat occupancy. We have already decided to recruit one general sales agent (GSA) each in Seoul and Narita, who will take the entire responsibility of marketing Nepal’s tourism and the national flag carrier in their respective countries. GSA is not required in all destinations. We do not have any GSA in Hong Kong, Thailand and Kuala Lumpur. The GSAs will be responsible for ensuring that Nepal Airlines’ aircraft fly to and from their nations with better seat occupancy. Currently, NAC operates flights to eight international destinations, with NAC’s seat occupancy in some destinations better than other rival airline companies. It has to be noted that any new star hotel that starts operation will not have full room occupancy overnight. It is the same with any new aircraft too.

One of the major problems that NAC is facing is also the lack of cockpit crew. Moreover, NAC is planning to hire foreign pilots to operate the two wide-body aircraft. How do you plan to address the crunch of cockpit crew in the coming days?

Shortage of cockpit crew, especially pilots, is being faced by airlines across the world. Even Chinese and Indian airlines have employed foreign pilots. Despite such crunch, NAC is currently able to operate its Airbus A320 with its own cockpit crew. Even Airbus is surprised with the capacity that NAC has developed in the past few years to operate Airbus A320 with Nepal’s own cockpit crew members. However, we cannot operate all our aircraft with our own crew members. The only option is to hire foreigners. In a bid to operate the two new wide-body aircraft, we recently published a global tender seeking pilots and other crew members. We expect interested foreign companies to submit their sealed quotations within a few days and NAC will hire competitive crew members, especially pilots, to operate these aircraft. In terms of appointing foreign pilots, NAC will give due priority to the number of hours that the pilots have logged in their career till date. Hiring competitive crew members and pilots will be a bit costlier, but the issue is about not compromising on passenger safety. For the two A330-200 wide-body aircraft, we require 18 pilots and co-pilots each. However, we have already trained four Nepali co-pilots and four pilots to operate the wide-body aircraft. This means that we will hire 28 foreign cockpit crew members through the competitive bidding.

The government has been mulling over bringing in a strategic management partner for NAC since long. However, the process to appoint such partner has been deferred time and again. What do you have to say on this?

Appointing a strategic partner for NAC is completely within the jurisdiction of the government. As far as I know, the Ministry of Finance has sent back the proposal of the Ministry of Culture, Tourism and Civil Aviation (MoCTCA) to appoint concerned strategic partner for NAC, raising a few questions. In fact, there is also debate among employees of NAC on whether it is necessary to bring in a strategic management partner at NAC or not. Similarly, questions are also being raised on the goals that the government wants to fulfil by bringing in a strategic partner. Till today, NAC has been managing all the technical and commercial aspects through its own staff and the result has been satisfactory. NAC’s engineers and technical manpower are globally competitive. Also, the concept of a strategic partnership has not been tried so far in any of the existing government-owned entities. If a strategic partner is hired for NAC, it is going to be the first experiment for Nepal. Bringing in a partner might also mean that the partner will have some stake in NAC. But this is not possible, as NAC cannot sell its share to other firms as per existing legal provisions. We can sell shares only if NAC is converted into a company. But big airlines can be brought in as a partner of NAC without any stake. So, it is all up to the government.

The government is also planning to a hire a strategic financial partner for NAC. Is this necessary?

It is again all about the policy of the government. The government should analyse whether or not strategic partners are necessary for NAC. But the decision should be guided by the performance of Nepal Airlines by using available data. NAC handles almost 2.5 million baggage every year. A few baggage are mishandled some times. Taking this sporadic lapse into consideration, is it necessary to bring a strategic partner? The performance of any airline is judged on the basis of reliability, occupancy and punctuality. In all these three aspects, I believe that Nepal Airlines is operating at par with the global average statistically. The major constraint of NAC is lack of aircraft. Recently, ambassador of Myanmar to Nepal urged me to conduct direct flight to Myanmar citing that its citizens are interested to visit Nepal. Similarly, the Sri Lankan government is also urging NAC to start direct flights to Colombo. It such a context, the government should identify priority areas to promote Nepal Airlines. If we have enough aircraft, it will automatically improve the position of the national flag carrier.