“Domestic flights need to resume so the economy can take off”
Nepali Times: What is the collateral damage to Nepal’s airline industry from the lockdown?
Birendra Basnet: We are down to zero. The worry is how can we take off again and reach the heights we had attained. For every one of the past five months we have earned no revenue, but we still have expenses in operations, insurance, loan repayments, salaries. We are losing up to Rs100 million a month, whereas as in an average month we were earning Rs500 million. The loss to our airline alone since the lockdown is Rs3 billion.
The government says the lockdown needs to be extended to stop a surge in infections. But the aviation and tourism sector has warned of an agitation if flights are not restarted. Why?
Restaurants and hotels were allowed to open after August 1 to spur business. In fact, all over the world, hotels and restaurants have been open under strict guidelines. We think airlines and hotels should be allowed to restart under the same protocols. We have to learn to live with this virus, keeping the economy turning while adopting safe practices.
Nepal's airlines can take off again, Birendra B Basney
Even if the government allows flights to restart, it doesn’t look like there will be too many passengers.
That is our problem. If there are few passengers, we will reduce our fares or reduce flights. Neighbouring India has allowed domestic flights. Allowing flights makes it possible for essential travel. There are many countries with Covid-19 where the economy is on track. We have to learn to minimise the risk, and resume flights. Workers have lost jobs, their savings, how long can we go on like this? Flights have to restart.
But how will you manage fares if there are very few passengers?
Fares are a part of a company’s overall business strategy. Fuel prices have gone down, so fares will go down. Supply-demand principles could push fares down further. And there is an upper limit for fares set by the government. We have to hold out till February 2021, when the Covid-19 crisis is supposed to ease. It’s up to the government, but it doesn’t seem to be able to come up with a coherent plan. At Buddha Air, we will do what we have to do to hold out for another six months to support our 1,100 employees.
How are you managing salaries and keeping your fleet airworthy?
Of course, there will be problem because our income is zero. We could have told our employees, this is a crisis we can’t pay you. But we could not morally leave those who have worked for Buddha Air for 23 years in a lurch like that.
The government wants to scrap the two-tier fares where foreigners paid more than Nepalis. How will that affect you?
This policy has been around for 50 years. The dollar fares allow us to subsidise fares for Nepali passengers. If we scrap the two tier fares, a Nepali passenger paying Rs3,000 for a ticket will have to pay Rs5,000. So fares for Nepalis will go up.
How will the crisis affect your plans to serve remote airfields with STOL aircraft?
We have evaluated the STOL performance of 18-seater Textron Aviation aircraft. We will conduct test flights even if the lockdown continues, and if the planes are suitable for our terrain we will operate them. We see demand and a business potential in flying these planes to remote areas.
How long will it take Nepal’s aviation sector to recover from this pandemic?
It will depend on the government’s strategy and performance. The international travel industry expects tourism to grow by 145% by 2021 winter compared to last winter because of suppressed demand. Nepal could also see a rebound in tourism. We have to start planning for that, and assure visitors that Nepal is a safe destination. At Buddha Air we have been ready since April to restart safe flying adopting safety protocols, we have carried out rehearsals. We are ready.
Interview conducted by Raju Baskota.