Bolstered by a dramatic resurgence in tourism last year and a surge in passenger demand, international airlines are increasing flights and capacity in 2004. If all goes well and there isn't much official red tape to tie things down, six more foreign carriers are expected to start operations by year-end.

The new year started on an optimistic note with the resumption of flights by Pakistan International Airways on 4 January after a two-year suspension of flights caused by India's ban on overflights. This alone will increase the number of inbound and outbound passenger seats by 25,000 this year, according to trade sources.

The Civil Aviation Authority of Nepal (CAAN) is currently evaluating applications by China Eastern Airlines and Philippines Airlines to start operations. China Eastern is interested in a direct Beijing flight to complement the twice weekly Air China flights to Chengdu, whereas Philippine Airlines wants to offer a Manila stopover for flights to the US.

epal has signed air service agreements with 33 countries worldwide, but the Philippines isn't one of them, which may delay the arrival of PAL flights. "We are considering signing an agreement with Philippine Airlines at the earliest," CAAN director general Nagendra Prasad Ghimire told us. "That is the only hurdle."

Although India has announced an open sky policy allowing foreign airlines full freedom to fly as many flights as they want in and out of India, Nepal is yet to follow suit. But CAAN says it has streamlined procedures, reduced service fees at Kathmandu airport and hopes that a lot more airlines will be interested in the growing Nepal market as well as use Kathmandu as a stopover for onward destinations.

Air Sahara and Jet Airways, both private Indian airlines, have announced interest in starting flights to Kathmandu. Air Sahara's local agent, Joy Dewan, says their flights have already been cleared by the prime minister's office in New Delhi. "We'll begin as soon as the ground work and other formalities are completed." Sahara plans to operate its brand new Boeing 737-800 between Kathmandu and various Indian cities by next month, and the company has already sent a team to study ground handling and other facilities at Kathmandu airport.

Meanwhile, existing international operators have applied for increases in frequency and seat capacity. To meet a growth in demand, Thai Airways plans to double its single daily flight between Kathmandu and Bangkok by the end of the year. Last year, Thai carried 80,000 passengers into Nepal, a whopping 33 percent increase from 2002. "We want to increase flights, but need to first revise our bilateral air service agreement and see availability of aircraft during that period," Thai's General Manager Viroj Sirihorachai told us.

From this October, Martinair will double its flights to twice weekly between Amsterdam and Kathmandu. Meanwhile, Qatar Airways, the fastest-growing airline flying to Kathmandu, operates 15 flights a week, 11 between Kathmandu and Doha and four between Kuala Lumpur and Kathmandu. With an 85 percent occupancy rate in both its A300-600 and A320 aircraft, Qatar plans to add three more flights to Doha. "We need a revision in the existing agreement with the government to allow the increase in frequency," said Joy Dewan, who is also the local agent of Qatar Airways.

The Dutch subsidiary of KLM, Martinair is now flying a 274-seater Boeing 767 and plans to double its flights during the year, carrying both cargo and passengers to Amsterdam with a stopover in Sharjah. "We are trying to make it happen soon," says Subodh Rana, Martinair's agent in Kathmandu. "Going by the increase in tourist arrivals, our headquarters should have no difficulty managing that."

Even Royal Nepal Airlines is suddenly waking up to the passenger demand, and hopes to lease a third 757 by early next month with a fourth later in the year. The airline is hoping to add flights to the Gulf and South India, and perhaps even restart its Frankfurt connection with a widebody jet. Although Prime Minister Surya Bahadur Thapa made a stopover in Singapore last month to ask Prime Minister Goh Chok Tong to put in a good word for Singapore Airlines to restart its Kathmandu flights, it doesn't look likely. However, flights by SQ's charter subsidiary, Silkair is not being ruled out.

After a series of bad news with the Indian Airlines hijacking, political instability, 9/11, SARS and India-Pakistan tensions, passenger volumes have suddenly picked up again around the region, and Nepal is benefiting. Tourist arrivals to Nepal increased 23 percent last year. In the past two months, tourist arrivals went up 50 percent compared to last year, with a 16 percent increase in overall passenger volume.

Tour operators are happy about the increase and are especially excited about the new airlines to and from India and China. The focus is shifting to regional tourism because of the fragility of European and American traffic due to fears of terrorism. They say Nepal can benefit by concentrating promotions in the two giant countries to the north and south. "With the new Indian and Chinese airlines, the floodgates will open on air-seats," says Dewan. "We expect a big boost in tourist arrivals this year."

Not to be left behind, two Nepali private airliners, Cosmic Air and Air Shangri-La, have applied for Airlines Operating Certificates which could come as early as March. Air Shangri-La has permission to fly to Munich via Sharjah and other destinations, provided one of its two aircraft is a widebody. Cosmic has asked for regional destinations, mainly in India and is required to operate at least one jet. Both have a year to start operations.