I have already mentioned earlier that I was associated with the aviation industry for more than two decades and therefore I know something about this industry. People already know about my experiences in this industry, in the air while I was flying, my experiences in foreign lands and my varied and multiple experiences with all sorts of different people and different circumstances. Although the Lauda Air issue did not get a proper hearing in the 19th sitting of parliament, I had given a lot of thought and made public my thoughts concerning this issue at many places and in many forums. I am very familiar with all aspects of the leasing of planes and all issues that come up in the process. When I was with the Royal Nepal Army, and then later when I worked with a private firm, I got a chance to study the ways in which these deals were done and was at times myself a member of the committees formed to lease planes. It is on this basis, the basis of my experiences in the aviation industry, that I want to lay bare the actual facts concerning the whole Lauda Air issue.

The Royal Nepal Airline Corporation (RNAC) has been functioning for a long time and is a well administered corporation. The RNAC has played a major role in the national economy. It began in 1958 with one Dakota and by 1990 had a fleet of 18 planes, which included four jets. At the present moment it has a total of nine planes. Of these nine planes, only two are jets and they fly international routes only.

Nepal is already established as a tourist destination in the international arena and the number of tourists is rising with the years. Air agreements have already been signed with 31 nations and more than 15 different airlines land in our country. Qatar Airlines flies seven days a week using a wide-bodied jet, Thai Airlines flies a Boeing 777 seven days a week. Singapore Airlines, Transavia, Condor and Gulf Airlines all fly wide-bodied jets to this country and all this shows that Nepal has firmly established itself as a tourist spot on the world map. It can be seen that all these airlines are slowly increasing their flights to our country, while the RNAC, on the other hand, is slowly cutting down on the number of flights it offers because of a scarcity of planes. Actually the RNAC should be increasing its flights but it's doing the opposite as said before, slowly cutting down its number of flights.

All this is because there's a major shortage of planes. As a result, while it had a 53 percent share in the international sector in 1995/96 (2052/ 53), this share had dropped to 38 percent by 1999/2000 (2056/57). It is not a good sign for the national flag carrier to steadily lose its market share because of the lack of planes. It is keeping in mind this loss of market share, that the corporation decided to lease planes some time ago. In fact, the process of leasing planes has been on for a long time. The two planes that the RNAC owns fly a total of 35 flights a week in the international sector and they are always seen flying. These two planes fly 12 times a week to Delhi, thrice a week to Bombay, twice a week to Bangalore, four times to Bangkok, twice to Singapore, thrice to Osaka via Shanghai and thrice a week to Frankfurt, London and Paris via Dubai. Since these planes are really busy, a small change in any flight really messes the whole schedule of the airlines. At times when a plane has to go in for a check up, then the RNAC has only one plane to operate and this leads to cancellations, delays and chaos-none of which paints a very good picture of the country or the airlines. This results in time loss and in the loss of revenue. These problems have tarnished the reputation of the airline, which in turn leads to loss of customer confidence, which results in loss of revenue and market share. The airline wants to increase the number of its flights to sectors in which it already operates, and wants to start new flights to Seoul, Riyadh and Lhasa. It has already done a market survey for these sectors and is now marketing its flights in these areas.

Experts have already stated that if the RNAC wants its plans to succeed, then it should have at least four wide-bodied jets. The long term goal and plan of the RNAC is to own at least seven wide-bodied jets, and until such time as it is not capable of buying its own planes, it will continue leasing them, like the one it has just leased from Lauda Air. If the plane that has just been leased flies according to the present schedule, then within 18 months it will generate a profit of Rs 650 million. If it flies direct to Osaka without stopping in Shanghai, then it will generate a profit of Rs 880 million. Statistics show that this jet carries a total of 258 passengers per trip, which translates into an increase of 65,000 passengers or tourists per year. If one tourist spends $500 during his stay, this means that $32.5 million dollars will be generated as revenue, which is a big amount. Let us not forget the indirect assistance and help this will provide to the nation and the national exchequer. Twelve organisations that are associated with the tourism industry have understood this aspect of the deal and have therefore welcomed this lease happily and with open arms.

Now if we go into the technicalities of leasing a plane, then let me make it clear, that there are no clear cut rules, laws and regulations, neither with the government nor with the RNAC. From 1994 to 2000, the government has leased 19 times planes of various sizes with different companies-this means 19 agreements have already been signed during these seven years. All these leases were done through direct contract and not through a tender system. After the Chase Air scandal, the Commission for the Investigation of Abuse of Authority (CIAA) recommended to the government that from that time on, all leases should be done through a tender system. Following this recommendation, the cabinet passed directives to the concerned ministries and agencies. According to international norms, all companies that want to lease out their planes, put all their specifications on the Internet months in advance. Now if any government wants to lease a plane, it can directly go to the different websites and directly finalise a deal with any company that gives it the best offer. Plane owners are not interested in anything that talks of tenders, guarantees and counter-guarantees. It is because of this system, that although the RNAC called for tenders four times within the span of eight months, no one responded. It is only after this that the government decided to directly lease a jet from a private company.

Everyone accuses the government of corruption in this case. They state that a cheaper jet was available, and ask why the government went for an expensive one. Actually in the long run, the Lauda jet turns out to be the cheapest one. A Lauda Air seat costs $15.06 per hour, the Ansett jet would cost $16.65 per seat per hour and the China Southwest Airlines plane costs $15.98 per hour.