NEPAL'S AVIATION INDUSTRY : Three Decades of Private Participation

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NEPAL'S AVIATION INDUSTRY : Three Decades of Private Participation

Gautam Buddha International Airport has come into operation. Pokhara International Airport will also be operational after a few months. Now a question arises, do we still need Nijgadh International Airport? The answer is yes.


A 23-minute flight flown across Tampa Bay from St Petersburg (Florida, USA) on January 1, 1914, was supposed to be the first commercial flight. The Mayor of St Petersburg was the single passenger on the flight who paid USD 400 at an auction for that journey. Commercial aviation which began with a single passenger now flies more than 12 million passengers every day all over the globe. An industry that today provides global connectivity that was beyond imagination a century ago.

Thirty-five years after the first commercial flight in the USA, the first aircraft landed at Gauchar, Kathmandu in 1949. Now more than seven decades after that historic landing, today air transport has emerged as the most integral part of the Nepali economy, making it possible to connect the people within and outside the country.

The establishment of the Department of Civil Aviation in 1957 and the Royal Nepal Airlines Corporation in 1958 paved the way for establishing legislative and regulatory frameworks together with putting in place the aviation infrastructure and developing required manpower. The year 1992 was remarkable in Nepal's aviation history. The economic liberalisation policy adopted by the government opened up domestic aviation for private investors that year. The government's policy departure had a positive outcome bringing in several private airlines that provided direct competition to the monopoly of Royal Nepal Airlines (now Nepal Airlines).

Three decades of private participation
Three decades of the aviation industry in Nepal, especially after the introduction of privatisation, were full of challenges and opportunities. There were many achievements together with several frustrations too. The entry of the private sector into the domestic operation brought a drastic change in the aviation scenario. Added number of airline operators brought a significant increase in the number and the types of fleets. Competition among the airline operators was a direct benefit to passengers. Air transport became gradually accessible and affordable to the general public. However, airport infrastructure development remained far behind in comparison to the growth of air traffic. The result was the increasing congestion, especially at Tribhuvan International Airport.

Newcomer airline operators performed excellently in the initial stage of privatisation. But many of them could not continue their service for a longer period. Fatal crashes of domestic flights were a great misfortune that created a negative image of the entire Nepali aviation industry. The impact of the crash would be so harsh that it would lead to the closure of the airline company itself. So, several new airlines which appeared within a short period had to close their operation after a single crash.

The inability to attract and retain qualified manpower by the regulatory body back then was considered to have a visible impact on the safety oversight. Besides, no logical answers could be provided after repeated questioning by international agencies on the dual role of the Civil Aviation Authority of Nepal (CAAN) in safety oversight and service provision. They blamed that CAAN was focussing more on production (service provider functions) rather than protection (safety oversight functions).

However, despite all those adversities, growth in air traffic continued. Passenger movement at Tribhuvan International Airport which was around one million before 1992 reached 7.2 million in 2018. Besides, it can be observed that recent developments of the events had enabled CAAN to rectify most of its deficiencies.

Aviation Policy
A true evaluation of Nepal's aviation industry should be based on a critical examination of the policy adopted by the government. Nepal issued a National Aviation Policy in 1993. It was modified first in 1996 and then rewritten again in 2006. Understanding the vision established by the policy, and the goals and objectives set by the national policy will help what we could achieve so far and what could not.

Creating a safe, reliable, affordable, and sustainable air transport service by adopting a liberal sky policy with the increased participation of the private sector was the goal set by the aviation policy. To achieve this goal, the policy was aimed at constructing a full-fledged international airport and the maximum utilisation of the Nepali airspace by connecting Nepal to the international air route network.

So, while examining the above aspect, entry of the private sector into the airline business was indeed a great achievement of the policy. However, another component of the policy i.e. encouraging private investment in the airport infrastructure and airport management could not move ahead. Besides, encouraging private investment for the expansion of the national carrier as envisaged by the policy also remained as it is.

As far as the full-fledged international airport is concerned, Nijgadh was identified as the most ideal site which can cater to the needs of a land-locked country like Nepal. Though sluggishly, the government has moved ahead with substantial homework, such as preparing a detailed feasibility study, demarcation of the site, conducting an environmental impact assessment, and even preparation of the master plan. Currently, the issue is on Supreme Court questioning the environmental aspects. Every political party and its leaders are aware that the Nijgadh International Airport is the future of the nation. However, its progress has been hampered repeatedly, sometimes by the nation's prolonged transitional situation, and sometimes by the frequent government changes. The lack of strong commitment from the top leadership is also one of the reasons behind the delay.

Isolated Nepal
One thing that many haven't noticed is that Nepal, despite having observed immense growth in air traffic and having international flight connectivity, is still isolated from the International Air-route Network. Nepal is just a destination airport. Our dream to promote the nation as a transit hub could not be achieved as international air routes do not go through Nepali air space. While drafting the aviation policy, a vision of a full-fledged international airport was linked with the maximum utilisation of Nepali air space by incorporating the nation into the international air route network. However, neither we have been able to build the Nijgadh International Airport, nor have we been able to bring the international air route to connect through Nepali air space. So,  it is necessary not to be viewed the Nijgadh site only from the airport perspective. It is not only the most ideal site for a full-fledged international airport but also the best site for the prospect of bringing an international air route via the Nepali airspace. So experts are of the opinion that Nijgadh International airport and efforts to incorporate Nepal within the international air route network are complementary to each other.

Connection between Nijgadh and Himalaya Route  
Every day hundreds of flights depart from South East Asian airports with their destination to the Middle East, Europe, and the USA pass through the Indian Airspace (South of Nepal) known as the Bay of Bengal. As the air traffic congestion in the route escalated to a hazardous level, ICAO Asia Pacific Region formed a Task Force in 2002 to address the problem which was named EMARSSH (Europe Middle East Air Route Structure South of Himalaya). After three years of rigorous exercise, the task force was able to come up with a new Air Route Structure. During the exercise, Nepal was also able to incorporate three new air routes that pass through Nepali airspace. Among them, Himalaya One Route, which is still relevant, originates from Hong Kong and proceeds directly to Kathmandu via Eastern Nepal. This route connects with the existing L626 route over Kathmandu and can proceed to the Middle East and Europe via Delhi. The major benefit of the Himalaya route is that it reduces the flying distance between Hong Kong and Kathmandu and beyond by 104 nautical miles (196 km). Reduction in distance means a reduction in fuel consumption and thereby reduction in carbon emissions. So a huge contribution in terms of financial as well as environmental benefits that could be provided by the Himalaya Route drew the attention of all stakeholders. However, at the time of implementation when questions regarding inflight contingencies and emergencies were raised, everyone was skeptical. How can an aircraft in an emergency land at TIA which is within a narrow valley and with so many restrictions? So, our long effort to establish Nepal within the international air route network failed merely because of our inability to build a full-fledged international airport at Nijgadh. However, the hope has not ended as the Himalaya Route is still registered as a future requirement in the region's Air Route Catalogue. The most important fact is, that this route is still on the priority list of the International Air Transport Association (IATA).

Sky locked Nepal
In 2010, Buddha Air made all essential preparations for Pokhara– Lucknow– Pokhara flight. In preparation for the cross-border flight, CAAN also built a separate terminal at Pokhara Airport. Departure from Pokhara was not a problem as the flight could exit via Bhairahawa. But India did not permit to return the flight via the same route. Instead, the return flight had to take a long circle via Simra (the only entry route to Nepal). The airline had to drop the idea as the route was not commercially viable. That was the first time we realised that Nepal is not only landlocked but also sky locked. Despite the continued efforts of Nepal, the problem has not been solved even today.

In spite of the several hurdles, Nepal's aviation is moving ahead. Gautam Buddha International Airport has come into operation. Pokhara International Airport will also be operational after a few months. Now a question arises, do we still need Nijgadh International Airport? The answer is yes. First, none of the two – Gautam Buddha and Pokhara - are full-fledged airports. Another reason is, TIA is almost saturated at present. Gautam Buddha's capacity is around 3 million passengers and Pokhara International Airport's capacity will not be more than 2 million passengers per year. Taking into consideration the past air traffic growth, all three airports combined would not be able to cater to the nation's needs for more than 10 years. Then what next for a land-locked country like Nepal?  

Mr. Manandhar is a former director-general of Civil Aviation Authority of Nepal

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