3-9 July 2015 #765

“Nepal Airlines can be world class”

Sugat Ratna Kansakar, the new Managing Director of Nepal Airlines, interviewed by Karobar, 2 July

ALL IN ONE: Nepal Airlines’ entire international fleet of two brand new Airbus 320s and two 30-year-old Boeing 757s in a rare photo taken last month. The Chinese MA60 turboprop is also seen.
Karobar: Why did you return to Nepal Airlines as Managing Director after serving as Executive Chair?

Sugat Ratna Kansakar: After Nepal Airlines Managing Director Mukesh Kharel resigned, my former colleagues requested me to step into his shoes. I was hesitant, but they argued: if Vladimir Putin can become Prime Minster after serving as President of Russia, why can’t you work as MD? I thought they were right, and I also felt that I could turn the airline around.

How are you going to do that?

I want to transform Nepal Airlines into a world-class airline. I can’t do it all by myself so we are hiring top consultants. We aim to introduce online ticketing from next year. People, whether they are abroad or in Nepali villages, should be able to buy our tickets online.

Is Nepal Airlines heading towards bankruptcy because of the flawed deal on the recently-acquired Chinese planes?

I don’t think so. Yes, we have been incurring more loss after we imported the Chinese planes because of their high insurance cost and load-penalty. But we will solve this problem soon. We have asked the Chinese to come to go over the cost of operation. It is also an issue of Nepal-China diplomacy, but we cannot operate the planes at a loss.

Do you think Nepal Airlines needs strategic partners?

Strategic partner means privatising and bringing in more investment. When I was Executive Chair, the Tourism Minister asked me what can be done to revive the ailing airline. I advised him to sell 51 per cent of the government’s share to the public. I prepared a proposal about it and sent it to the tourism ministry and it was approved by the tourism ministry and transferred to the Ministry of Finance (MoF). But it got stuck there.

What is the status of the management deal with Lufthansa?

Lufthansa’s proposal is so attractive that we should not hesitate to accept it. But there are legal obstacles. Our law does not allow us to do it that easily. Before we sign a deal with Lufthansa, we want to have a better system like the ones developed by Thai or Singapore Airlines so that no plane needs to get grounded here.

You say Nepal Airlines will increase competition and force other airlines to lower their ticket prices. How?

To start with, we need more planes. We now have just four planes for international routes, and need to add at least one new plane every year. I have convinced all board members about this. Hotel owners, tour operators and tourism entrepreneurs are more desperate than us. They know tourism will not grow if Nepal Airlines fails to flourish. But our government took a really long time to realise that simple truth, and we had to wait 24 years to buy the two airbus 320s. But things are now a lot easier with the amendment of Public Procurement Act-2007 which has a separate provision for procuring aircraft making it easier for Nepal Airlines to buy planes.

Are you phasing out the two Boeing 757s?

We have already decided on our new destinations. We are flying to Bangalore and Mumbai from September first week and then to Guangzhou, Dubai and Dammam. Only when we add two more planes to our fleet will we decide on what to do with the 757s. But replacing the Boeings may not be feasible for the time being.

Nepal Airlines does not have enough planes to serve remote rural areas of Nepal.

A foreigner once told me: it is a big thing that a small country like Nepal has 52 airports. Unfortunately, we are able to fly our planes to just 22 of them. We do not have sufficient planes to fly to all the destinations. We did not add a single plane to our domestic fleet for 45 years until we bought the Chinese aircraft. That is why we are unable to provide service to all Nepali villages. We should not just look at profits. We are eying lucrative markets so we can subsidise the loss-making flights to inaccessible areas within Nepal. For this, we need to add at least six more planes.

Read also:

Saving Nepal Airlines