Nepal Airlines Corporation (NAC) is carrying market research on seven international destinations as it plans to spread wings further in the international market.
The national flag carriers are 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 carrying market studies.
Even though the officials of NAC had said before that direct flights to Guangzhou and Tokyo Narita were expected 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 likely in March 2020 only.
executive chairman of NAC Madan Kharel while approaching the press conference said that the Civil Aviation Administration of China (CAAC) will conduct a 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 getting approval from the Japanese Civil Aviation Bureau (JCAB) for commencing 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.”
Even though it has been 16 months after NAC’s two wide-body aircraft landed in Nepal, the aircraft has not been utilized to the best due to the need for destinations. Due to the 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 served 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.”
Asserting that the airline profit depends upon revenue maximization and cost minimization, Kharel said that the NAC was working on plans to preserve the cost through severity measures and system improvement. The plan consists of cost-saving on fuel, re-routing of flights and hotel accommodation. The airline’s 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 the financial year 2019-20 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 the financial year 2018-19.
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, the seat occupancy rate for international and domestic flights was 81% and 79%, respectively, in the financial year 2018-19.
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