Nepali Times Asian Paints
Economic Sense
Open skies, closed minds


Skeptics of free market and reforms now have a good excuse. The implementation of the government's open skies policy that began more than a decade ago has not really resulted in better customer service. While you may argue that airports are still managed by the government, it is to blame for the poor service of private players. Reforms without regulation can be worse.

Ten years ago, we compared the inefficiencies of the state owned airlines of India and Nepal. We should today have been in a position to compare the efficiencies of private airlines, but we aren't.

In India, the flying public is pampered both in terms of quality and price. In Nepal, airline owners have pampered themselves at the cost of the consumer (See also: Under My Hat, 'Royal Uneconomic Class' #215). Gone are the smart-looking people behind the counter, the courtesy and in-flight services. The operations benchmark has been relegated to the Gonga Bu Bus Park. It is basically the 'fill it, shut it, forget it' policy.

Of course one does not know how much security and safety has been compromised. For example, this Beed observes how flight attendants deal with mothers carrying infants in a private airline in India vis-?-vis a private airline in Nepal.

Rest of the world: the nervous mother of the wailing baby is briefed on how to handle seat belts or tackle air pressure during take-off and landing. Nepal: mother of wailing baby is totally ignored and made to fend for herself. None of the private airlines believe in assigned seats and seem to enjoy the chaos this creates. Maybe, the intention is to give the hundred people inside a plane the exact experience of a bus ride to Banepa at rush hour.

With domestic airlines catering to tourists, the logic would be to have some English speaking ground staff. But ground handling is worse than air handling. What happened? Our service industry was supposed to be of international standard.

A deregulated airline industry functions best when the government oversees the maintenance of standards and growth. In the United States, the land of the biggest airlines and largest global air travel share, a strong Federal regulator has ensured that safety is not compromised and the customer gets the best options both in terms of products and price. In Nepal, a weak regulator has allowed private airlines to do as they please. The closure of once high-fliers like Necon has shown the the 'take the money and run' attitude is prevalent in the private sector.

The performance of private operators in the airline business has given anti-globalisation and anti-reform lobbyists reasons to dissuade government businesses from opening up. The less said about airport management the better. While millions are collected through airport tax every year, there is minimal investment in upgrading facilities.

The commotion of having passengers of 100-seater jets trying to get through counters, security, ramp buses and boarding procedures made for a 15-seater aircraft is aptly symbolic of the state of Nepal. The public non-address system, non-existent baggage handling, and the general attitude of staff that passengers should be grateful they have a seat is symbolic of the failure of deregulation.

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(11 JAN 2013 - 17 JAN 2013)