Domestic aviation flies into headwind

High fuel costs and concerns about air safety have dampened growth of Nepal’s domestic aviation sector despite passenger demand remaining high.

Prominent media coverage of the crash of Yeti691 in Pokhara on 15 January led to massive cancellations just as bookings were being firmed up for the spring trekking season. For one month, passenger volume dropped sharply, but is now picking up again.

Pokhara still wears a deserted look, and tourist footfalls have fallen along popular trails in Manang and Annapurna. Even so, Nepal’s biggest domestic airline Buddha Air is making Pokhara’s newly opened international airport its new hub for cross-sector flights.

From 9 March it is basing five planes in its all-ATR fleet of 14 aircraft in Pokhara for daily early morning departures to Bhadrapur, Bharatpur, Simara, Bhairawa, Nepalganj and Kathmandu. Pokhara airport will also be opened for night flights this week.

The robust passenger demand is due to the poor condition of the main highways to Pokhara from Kathmandu and Bhairawa which makes air travel attractive despite high fares. Another contributing factor is domestic tourism, as more and more young Nepalis discover their own country.

“Pokhara is a game-changer,” says Buddha Air’s Managing Director Birendra Bahadur Basnet. “We are excited about Pokhara becoming our secondary hub.”

Basnet’s optimism comes despite considerable headwinds from high price of Aviation Turbine Fuel (ATF) which is now Rs170/l, more expensive cost of operations because of the strong dollar vis-a-vis the Nepali rupee, as well as difficulties in sourcing aircraft components because of continued global supply chain constraints.

Added to this is air traffic congestion at Kathmandu airport, which forces planes to burn fuel on extended holding queues for landing.

Buddha Air's business plan appears to focus on diversifying its operations base, pioneering new domestic inter-city routes and expanding connections to north Indian cities beyond its current thrice-weekly Kathmandu-Varanasi flights.

The new Bhadrapur-Pokhara route, for example, hopes to tap Indian tourists from Sikkim, Darjeeling and Assam, while allowing Nepalis to fly to Indian destinations via Bagdogra bypassing Kathmandu. In anticipation of increased demand on the new routes, Buddha Air is adding two ATR-72-500s, bringing its total fleet strength to 16.

“We do not have to look too far for tourists in Nepal, there is the huge Indian market right next door, we just have to make flight connections more convenient,” says Basnet.

Buddha Air has been lobbying to start flights from Pokhara directly to Varanasi, Lucknow and Delhi, but the Indian authorities have raised strategic objections to Pokhara Airport being built built by the Chinese under the Belt Road Initiative (BRI) — similar to India refusing to buying electricity from hydropower plants built by Chinese contractors.

India has also refused to allow inbound flights to Kathmandu, Pokhara and Bhairawa via routes B345 from the south and L626 from the west. Both routes are open only for outbound international flights. This means longer flight time and fares from Bhairawa and Pokhara to Indian airports.

Even so, Basnet says the Indian side is positive about connecting Janakpur to Ayodhya, and Nepalganj to Delhi. Existing flights from Pokhara to border cities in Nepal will increase Indian pilgrim and tourist traffic, as well as give access to cheaper domestic flights within India for Nepalis via Bagdogra, Darbhanga, Faizabad or Gorakhpur.

Buddha has been trying to counter the negative international publicity following the Pokhara crash by highlighting air safety and focusing on crew training and strict safety protocols. It is the only domestic airline with its own fully-equipped maintenance hangar with FSTD simulators to train and check its 141 pilots.

Basnet told Nepali Times, “We are concentrated minutely on safety in all departments, specially flight operations, maintenance and ground handling department.”