Future Aircraft for Nepal Airlines Corporation

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Future Aircraft for Nepal Airlines Corporation

Nepal Airlines Corporation (NAC), the national flag carrier of Nepal, has a history of 63 years. The airline company started its services with the 28-seater Dakota aircraft manufactured by the American Douglas Aircraft company. During these six decades, NAC has operated different aircraft like Fong Shu Harvester AN-2, Pilatus Porter PC-6, Fokker Friendship F-27, Hawker Siddley HS-748 Avro and Twin Otter DHC-6 (two of them are still in service), among others. In 1971, the airline started operating Boeing 727, a tri-engine jetliner, which remained in service until 1993. The jetliner could carry up to 123 passengers and connected the NAC to different regional routes which were not able to be covered by small propeller aircraft.

In 1987 NAC commenced the operation of two Boeing 757 aircraft which helped the national flag carrier to make its presence felt in the international aviation market flying on long-haul routes like London, Frankfurt, Japan, Hong Kong etc. In the 1970s and 1980s, NAC was financially strong, and it was the largest employer in the country employing up to 2200 staff and the largest earner of foreign currency for the nation.

Unfortunately, NAC could not increase its fleet and could not maintain its market domination due to the ageing Boeing 757 aircraft. There was no fleet expansion of the national flag carrier for up to 27 years. Due to this stagnation, NAC lost its momentum in the domestic as well as international market front.

In terms of fleet expansion on international routes, it was not until 2009 when NAC signed a memorandum of understanding (MOU) with Airbus to acquire two Airbus A320s during the Dubai Airshow. Those aircraft were part of the plan to operate flights to the Middle East and Southeast Asia. In 2015, NAC acquired two Airbus A320s that are also known as narrow-body planes. Likewise, two wide-body Airbus A330s were acquired in 2018. NAC also sold one Boeing 757-200M and has been trying to sell another aircraft which is currently not in operation after three decades of service. For international flight operations, NAC currently has an active fleet of two narrow-body (Airbus A320-200) and two wide-body aircraft  (Airbus A330-200).

Current Fleet for International Routes
Airbus A320
Airbus A320 was first purchased by NAC in February 2015 and the second aircraft was acquired in April of the same year. Airbus A320 is a 158-seater twin engine jet aircraft which is powered by the V2500 series engine, developed by International Aero Engine (IAE). After the purchase of the aircraft, the number of NAC’s passengers increased from 206,430 in 2014 to 253,658 in 2015, an increase of 22.87 percent. This aircraft helped NAC to get on track by increasing market share and its service reliability. Thus, the A320 took NAC back into a profitable status after a long time.

Compared to other airlines around the world, NAC has utilised the A320 aircraft a lot more than normal. According to the International Civil Aviation Organization (ICAO), Airline Operating Costs and Productivity Report, the A320 average daily utilisation around the globe is 11.7 hours. However, on a busy day NAC flew the aircraft up to 16 to 18 hours which is a high utilisation rate compared to other global airlines operating the same plane. Higher the utilisation rate of the aircraft, the more the aircraft remains in the air which means less ground time which ultimately leads to more profitability.

The Airbus A320 is one of the best aircraft Nepal Airlines ever acquired in terms of utilisation. The aircraft best suited for the routes NAC was operating at that time like Doha, Dubai, Thailand, Malaysia etc. It covered all the existing routes and ultimately helped to restore its presence in the sectors which was almost on the verge of collapse.

Airbus A330
The Airbus A330, a twin jet wide body 274-seater jumbo aircraft powered by the powerful Trent 700 series engine, developed by the UK based manufacturer Rolls Royce, was first introduced by NAC in 2018. The intention behind the wide body programme was to connect long haul routes like Seoul Incheon, Tokyo, Sydney, Paris, London and New York. In the early days, NAC was not able to use its aircraft on the desired routes and it was left idle and instead flew very few hours on regular flights to destinations like Doha, Dubai, and New Delhi. Gradually, NAC started operating to Narita, Tokyo which has been a good destination for NAC's A330 aircraft so far.

It is not considered good to fly a long-range aircraft on short routes because the aircraft's life depends on the number of landing and take-offs it makes, also known as Flight Cycles. The life of an aircraft degrades faster if it flies on short routes. For example, the A330 was deployed for the Kathmandu-Delhi route, which was not supposed to be the regular route for the wide body aircraft. But, due to growing passenger demand it was the optimal solution to fly on short routes and flights were commercially promising, which appeared to be a good compromise for the airline to reduce its losses.

During the first wave of the Covid-19 pandemic, the A330 wide body played a vital role in the repatriation flights from Wuhan, China. For the first time in its history, NAC flew to Sydney, Australia, which gave the impression that NAC was capable enough to fly long-range flights and that aircraft like the widebody Airbus A330 are essential for NAC. Nepal Airlines conducted different cargo flights from China and brought huge amounts of medical equipment which helped in saving many lives. Airbus A330 has proved that it is the aircraft needed in difficult situations. During the second wave of the pandemic, NAC has been doing multiple cargo flights to different countries like Oman, China etc. Therefore, a wide-body aircraft like the Airbus A330 is a major aircraft that the country needs not only in normal times to carry huge numbers of passengers but also during the difficult times like the Covid-19 pandemic to bring in cargo.

Flights to Seoul Incheon, Guangzhou China, Riyadh are expected to be connected soon. If all the mentioned sectors get connected it is going to be difficult to operate efficiently and reliably with the currently available aircraft. If any one of the aircrafts gets into technical problems flights must be cancelled and cancellations of flights is not a good option for both the airline as well as passengers. So, fleet expansion is undoubtedly a necessity for NAC in a post pandemic world. It is really going to be an arduous task to operate in all sectors which are in service today (considering pre-pandemic operations as a reference) efficiently with the currently available fleet.

Availability of New Generation Aircraft in the Aviation Market
There are highly fuel-efficient new aircraft available in the aviation market that may best suit NAC. The two major manufacturers of aircraft, Airbus and Boeing, offer a new generation of aircraft which give an unbeatable performance. The introduction of composite materials has given the world the best new generation of aircraft with higher payloads with reduced operating costs per seat.

In the narrow-body section the 737 MAX from Boeing could be an example. The Boeing 737 MAX aircraft was designed to meet the current market demand and to compete with the Airbus A320 NEO (New Engine Option: Same old A320 aircraft fitted with a new engine and some modification in the airframe for higher efficiency). Unfortunately, it has been struggling for its survival after the two major crashes of Lion Air and Ethiopian Airlines within a timeframe of six months.

Similarly, there are aircraft like the Airbus 321NEO, which is basically a stretched version of Airbus 320, Airbus A220 previously known as Bombardier CS100.  This beautiful aircraft was designed by Bombardier, a Canadian manufacturer which was a foray in the 100-150 seat aircraft market with new generation efficient engines. However, the Bombardier could not sustain its programme due to the very high cost of production and Airbus took its major share later and was renamed as Airbus 220. It provides unbeatable performance in the current market of 100-150 seat configuration aircraft.

Operating in the long-range sector and carrying large numbers of passengers, there are new highly efficient wide-body aircraft like the Boeing 787 Dreamliner which has been a favourite aircraft for airlines because of its highly efficient engine and ultralight weight. Using more than 60 percent of composite materials gives the aircraft very low fuel burn per seat. Boeing is currently developing the 777X new generation aircraft which is a re-design of its most successful Boeing 777.  The re-design includes more efficient engines as well as new carbon composite folding tip wings. Boeing 777X wide-body aircraft is best suited for ultra-long-haul flights with a carrying capacity of more than 400 passengers depending on seating configuration.

Similarly, Airbus offers aircraft like the A330NEO and A350 with different variant designs and with different seating configurations with their varying ranges. Airbus A330-200 and A330-300 are going to be obsolete in the upcoming years because of its less efficient engine. There are better alternatives to this like the A330 NEO with its two variants with new efficient engines- the Airbus A330-800 and A330-900 with the former having a better range of 7500NM (nautical mile)/13,900KM(Kilometer), although the A330-800 has received little attention compared to the more passenger capacity version A330-900 with a shorter range of 6550NM/12,130KM than its predecessor. Airbus A330NEO provides a typical seating configuration of around 220 to 260 passengers depending on the customer requirements.  There are different iterations of the highly efficient Airbus A350 aircraft like A350-800, A350-900, A350-1000 with different seating configurations and which can be taken for ultra-long-haul flights. Airbus A350 jetliner can accommodate 300 to 350 passengers in standard three class configuration.

Aircraft in a Post-Covid World
Both major manufacturers, Airbus and Boeing, offer highly efficient new generation aircraft suitable for NAC. But the current scenario is based on using Airbus fleets because NAC is not in a condition to manage planes made by different manufacturers at the same time. It is because human resource development, building maintenance facilities and managing equipment require a lot of money and time for new aircraft.

Let us focus on one medium size narrow-body aircraft which can operate flights that were once preserved by wide-body aircraft. During the “Paris Air Show” in June 2019, Airbus introduced the new aircraft A321XLR (Xtra Long Range) which is basically a stretched version of the A320. With many attractive features, one of them being the fascinating long-range capabilities of a single aisle aircraft that can cruise up to 4,700 NM (nautical mile)/8,700 KM non-stop. More than 450 orders have been placed by different airlines across the world.  The aircraft basically best fits in the marketplace which once Boeing 757 had. The aircraft can be configured on a typical seating of 180-220 in 2-class cabin configuration. With rising fuel prices each year, the biggest burden for airlines is to reduce the fuel burn per seat. The A321XLR promises to reduce the fuel burn per seat by 30 percent. The major operation costs for airlines is in fuel which comes to around 40 percent of the total operating cost so one can now speculate how efficient the aircraft really is.

The A321XLR covers all the requirements of NAC with economy and its outstanding range. It also covers both the aspects of the narrow-body as well as wide-body aircraft, since NAC already has two A330 wide body aircraft they can operate up to 15-20 years efficiently if managed properly. For the current sector expansion like Japan, Korea, China, Saudi Arabia, Paris, Frankfurt and almost all the eastern parts of Europe, the A321XLR can cover them. For further expansion of the sectors beyond Europe NAC will need more wide body aircraft like A350, A330-NEOs. Although, it would be better to improve and increase nearby destinations effectively before heading to more distant ones.

Let us assume the A330 aircraft is supposed to fly to Narita, Tokyo from Kathmandu but there are very few passengers to deploy a wide body aircraft. In that situation the A321XLR can be used as the best alternative. Similarly, passengers are also more conscious about the environment nowadays; they want to know what kind of aircraft they are flying in like its impact on the environment, safety record and so on. Being a national flag carrier, it is the responsibility of NAC to prefer the best fuel-efficient aircraft to lead the carbon reduction footprint.

It would be unfair to consider only one aircraft. Other highly fuel-efficient aircraft in both narrow-body and wide-body planes mentioned above are A320NEO, A321NEO and A220. However, none of these aircraft can beat the range of the A321XLR as it can cover all sectors in range covered by both the currently available aircraft NAC operates.

With the recurring waves of the Covid-19 pandemic there is no doubt that air travel disruptions will be extending and hitting the tourism industry hard, which is one of the major contributors to Nepal’s economy as well as a major source of airline revenue. However, the major customers of NAC are Nepalis working in Gulf countries, students studying in India and other countries which can be considered as a safe side for the airline to fall on if NAC can operate on those routes regularly and efficiently even during this pandemic.

For now, fleet expansion seems to be an ambitious plan for a highly indebted airliner like NAC; the corporation is yet to repay debt it availed to purchase A320 and A330 aircraft. The future of air travel is also uncertain due to the ongoing Covid-19 pandemic. Nevertheless, vaccinations are increasing and people who have been in their homes for a long time due to the lockdowns are desperately waiting for the world to be normal. With the increase in vaccinations, gradually air travel will be getting back to normal once again. Currently NAC needs to use this setback as an opportunity and make proper plans and be ready for the post pandemic world. With new and efficient aircraft, proper organisational management and coordination between the stakeholders, NAC once again can take-off to reach new horizons.

(Bhandari is Senior Technical Officer at Nepal Airlines. The opinions expressed in this article are those of the author and do not reflect the policies of the organisation he is associated with. He can be reached at [email protected] and [email protected].)

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