Thursday, November 23, 2006

Convertible cars: The new road-beauties

Domestic auto market has in recent years witnessed a smooth growth but it is still virgin for the sporty convertible cars. These sleek, stylish and trendy head-turners are slowly luring the Nepali auto-buffs. It is evident from the fact that until a year ago, there were only a couple of convertible cars on the Kathmandu roads. But today, the numbers of these road-beauties are increasing, if not by leaps and bounds.
“The sale of convertible cars is still very low,” says Prabal Saakha, director, Saakha & Company Pvt Ltd, the authorised agent of San Motors that has launched convertible cars officially in Nepal last February.
Convertibles generally have a sportier performance than other cars, with good acceleration. The engines are revvy, giving maximum power at high revs, with engine sizes typically in the range of 1.8 litres to 3.5 litres.
Almost all the major car manufacturers like BMW, Peugot and Aston Martin have convertibles. But among them those plying on Kathmandu roads are from San Motors, which is designed by Gerard Godfroy, developed by Christopher Bhir and engineered by Phillip Beloon and Le Mans design Group, the people who has also designed Aston Martin and Peugot also. San Motors began its life to produce contemporary, exclusive and stunning cars that showcase creative excellence, claims the company.
“Convertibles are the ultimate fun cars,” says Saakha. “These beautiful machines are not for first-time buyers. After all not a single new-car buyers opt for convertibles and there are good reasons why. Even though those of us who love convertibles do our best to ignore them,” adds, Saakha, a proud owner of an occasionally driven garage queen.
Lack of interest in these fun cars might also be due to the varying needs and driving habits of the Nepalis. In general, buying a convertible car means bringing an excitement back to one’s driving experience.
But before buying a car every buyer asks, “Do I want a car just for fun or commuting?” As these open top cars have less room for occupants and luggage, the buyer might opt for other similar-sized family cars.
There is yet another reason why convertibles aren’t getting much respect. The vast majority of Nepalis would rather be encapsulated in a silent, climate-controlled, rolling den than be out in the open, assaulted by every loud noise, passing dusty clouds and quirk of the weather that a journey might bring. After all convertibles can be no fun in a hot traffic jam or amid diesel fumes on the crowded Kathmandu roads.
“This is the one section, which, unlike others, has less but quality customers,” adds Saakha. And there are no growth targets either like any other brands in the market. After all, convertibles are rolling compromises and compared with solid-roofed cars, they are less weather- and noise-tight and not as structurally strong. “Convertible car is an ultimate driving satisfaction for the driving pleasure seekers,” says Saakha adding that these rolling beauties are not expensive, if not affordable, but it must suit one’s life-style rather than pocket, as today buying a car is not an inaccessible dream for a middle class Nepali.
One can buy a convertible at Rs 1.625 million, which is in the range of any other car in the market. “But a passionate auto-lover only buys convertible.”

Friday, September 15, 2006

Banks, consumers ride smooth on auto loan

Retail lending has become a boon for consumers lately. Due to the insurgency and unstable investment climate, banks have also opted for the more secure forte, the retail lending.
The traditional belief that the needy only take loan from banks has seen a sea change in the last five years due to the changing life-style and growth in the number of urban middle class.
From a tiny household gadget to a car or a dream home, a consumer can get loans and go on paying easily in equated monthly installments (EMI).
Auto loan is one of the retail lending activities that is catching up among consumers and banks alike, recently. It is considered as a more secure investment and easy to recover, compared to other loans by banks and financial institutions.
The recent income boom, according to the Nepal Rastra Bank's salary index despite the decade long instability, has led to a steep rise in consumer loans, which have been a key factor in the growth of car sales.
"Apart from that, easy availability of auto loans has also fuelled auto sales," says Raveena Joshi, head, personal lending at the Nabil Bank Ltd, which provides 40 auto loans on an average per month.
Nabil's auto interest rates vary between seven to 9.5 per cent, depending upon whether it is for private use or commercial use, and sometimes depending upon the loan tenure also. "Each loan from Nabil Bank is ‘tailor-made’ for individual customer. We always ensure that we make the banking experience exciting and a joyous experience for each customer," she adds.
Though auto loan does not guarantee a large investment but considering the present situation, the banks’ approach towards auto loan is a good way to prevent liquidity from being inflated. Moreover, it does not increase non-performing assets (NPAs).
Depending upon the income source of an individual, banks finance up to 90 per cent of a vehicle’s cost. The remaining amount, along with the processing cost, is borne by the buyer.
The processing fee is normally one per cent of the total loan amount. EMI varies according to the loan tenure, the loan amount and the interest rate.
"Depending upon the income of customers, a vehicle loan is sanctioned and the bank does have a ceiling on the maximum amount that it can finance for a vehicle like it can finance only upto 90 per cent of the cost of the vehicle for private use for new vehicles only, and 80 per cent of the cost of the vehicle for commercial use for new vehicles only,” says Deependra B S Thapa of Standard Chartered Bank Ltd.
However, almost all financial institutions are offering competitive rates due to stiff competition in the retail-lending segment. It has provided consumers an opportunity to ride cars now and pay back loans over years.
"It has, to a certain extent, also allowed banks to reduce their liquidity problems with profitable avenues of investment," says Joshi, adding that retail financing is the demand of the day as lifestyle, basic needs and change in the attitude of people has opened new avenues. Banks have seen these opportunities in retail lending and ventured into this sector.
"Among retail loans, auto loan covers upto 25 per cent," says Rohit Chandra Shrestha of Branch Operation Department of Rastriya Banijya Bank (RBB), the government undertaking. RBB has started auto loan scheme after private commercial banks came into the market with various schemes related to auto loans. It offers seven per cent interest rate and claims that it has the most competitive rate in terms of processing charge in the market.
"Its processing charge is only 0.25 per cent, which is the cheapest among all the banks," claims Shrestha, adding that the bank has in the duration of two years provided loans to more than 200 units of vehicles.
Credit management plays a crucial role in keeping the bank safe from risks. For security, vehicles purchased under auto loans are registered in the Bank’s name, which itself works as a collateral.
Not only banks but also most automobile dealers happily make arrangements to provide loans to customers. Many banks have signed agreements with automobile dealers so that interest rate could be maintained at a lower level.
Auto dealers and banks float various schemes together in passenger vehicle category from time to time, which has resulted in a win-win situation for the dealer, bank and most importantly, for the customers.
Banks provide loans for second hand cars also. "Nabil has a panel of established, experienced and authorised valuators. We confirm the loan amount and tenure according to the valuation reports of the second hand vehicle from our authorised valuers," adds Joshi
"Life on EMI can be more luxuries and living a life on credit is no more a shame, but rather a status symbol," says one consumer, who owns a car and is paying for it in easy instalmets.

Sunday, July 2, 2006

Energy crisis in Nepal

With petrol prices rising and natural resources diminishing, Nepal has no options than to look to alternative energy. Renewable energy sources like solar, hydro and biogas are the major sources that Nepal can use for its benefit.
Among them hydropower is considered to have huge potential in Nepal though at present it meets only less than two per cent of the total energy need. “In long-term micro-hydel projects is the only solution of the growing energy need, says energy experts. The energy crunch in the country, which has more than 6000 rivers with huge potential of hydropower generation, can be overcome with more clear vision and investment.
Hydropower technology is a proven technology that offers reliable and flexible operation. At present, however, only about 40 per cent of the total population has some form of access to electricity. “The hydropower plants have mainly catered to the electricity needs of the urban or semi-urban areas at present, says Ram Chandra Pandey, director at the Community Rural Electrification Department (CRED) of Nepal Electricity Authority.
Nepal’s enormous hydropower potential remains virtually untapped, creating a chronic imbalance between energy consumption and energy resource endowment. “There are a number of problems and challenges that need to be addressed to make the hydropower sector the launching pad for higher economic growth and development in Nepal,” claim energy experts.
Hydropower projects are capital-intensive, and most of the existing hydropower plants, owned and operated by the Nepal Electricity Authority (NEA), have mainly come up through bilateral and multi-lateral sources of financing.
After almost a century of development of hydropower — that started in early 1900 with Pharping power plant with 500 KW installed capacity — in Nepal, it has moved in a snail’s pace.
Post-1990 government opened the sector to local and foreign independent power producers (IPPs) and NEA also initiated some projects with different financing modes. As a result 292 MW capacity was enhanced within 10 years.
The current peak hour demand of NEA system is 556.3 MW and is likely to increase in an average rate of seven per cent every year, according to NEA. To meet the increasing demand, more mini-and micro-hydel projects should be encouraged, says Lila Nath Bhattarai, project manager of the Chilime hydroelectricity project, a model project developed by the NEA and private sector.
To enhance hydropower development, the most important elements are promoting cost effective small and medium-sized projects to meet domestic demand at affordable price, encouraging private sector investment in hydropower development and distribution, accelerating rural electrification also by attracting investment from the community and local private entrepreneurs, improving the integration of social and environmental elements into the power development process, and encouraging power-based industries and transportation systems as markets for the energy produced.
In places where hydropower plants are considered expensive, cheap solar energy is becoming popular. Some 500 solar cells have been installed in Humla district. “Below poverty level areas should be encouraged to use solar energy,” adds Bhattarai.
People, who rare cattle, use cow-dung to create fuel in many places. It is widely in practice in the remote areas. “Tukimara could be another option,” energy experts suggest.
There has been pressure on the forests in the rural areas in the absence of alternative sources of energy. It is imperative that we develop alternative sources of energy in the rural areas to check deforestation. So far, hydroelectricity has been the best alternative, which has not only helped protect the forest resources and environment but also saved huge amounts of money from flowing out of the country to import fossil fuels.
Hydropower has a number of benefits. It is a renewable electrical energy source and is non-polluting, like no heat or noxious gases are released. No fuel costs are involved, and given its low operating and maintenance cost, it is essentially inflation-proof.
However, in recent years NEA is going in loss, and people blame rural electrification for the loss. But Pandey, director at the CRED does not agree. He says, “Since most of the town areas are already electrified and most of the electricity demand is from the rural areas. The demand of rural area being very high, it will be potential market for electricity. If there is no demand there is no way generating more power and searching for more power plants.”
“At a national level, where electricity substitutes paraffin or diesel it is possible that there would be significant foreign exchange savings on imported fuels. Government should levy ten or twenty paisa from the millions of dollar that goes outside the country for importing fossil fuels specifically petroleum products for the source of energy and to be deposited on rural electrification fund,” he suggests.
The other source of energy is petroleum products. It has, in recent times, become a challenge to keep — the Nepal Oil Corportaion, the government agency that buys and distributes petrol, diesel and kerosene — afloat, due to rising oil prices in the global market.
NOC has incurred a whopping loss of about Rs 620 million. “The NOC is in loss of Rs 2 million every day,” says Umesh Dahal, acting general manager of the NOC. “The reason why the NOC is incurring such a huge loss,” according him is, “the heavy subsidy being provided by the corporation despite continuous rise in the price of oil in the international market.” However, Nepal Petroleum Dealers’ Association (NPDA) does not buy his logic. According to NPDA, the subsidised kerosene that the NOC provides does not reach the targeted group. Rather it is making its way to industries, they claim.
The government, to cut down the dependency on imported petroleum products, has established Petroleum Exploration Promotion Project (PEPP) and started doing surveys for the possibility of oil and gas reserves. But the cost of exploration is highly expensive. Dr Rajendra Bahadur Shrestha, project chief of the PEPP, says, “Petroleum exploration is high risk and capital intensive. It needs sophisticated technology and the drilling process is much more expensive that Nepal can not afford.”
Still some of the global companies like Shell are interested. Shell did some drilling at the block 10, in Biratnage, from 1986 to 1990. But the result was not as expected. Now Cairns that has taken blocks 1,2,4,6,7 for exploration and is working on the sites. “However, it will take at least eight years for them to get some result,” Shrestha adds.
Foreign expert companies are encouraged to come to Nepal and explore petroleum through Petroleum Act because technically sedimentary basis is appropriate for petrol exploration and our Terai region is likely to have oil wells and gas reserves.

Wednesday, June 28, 2006

Insurance: Handle the golden goose with care

Why insure:
Insurance is the process of sharing financial losses of the 'few' from a common fund created by the contribution of 'many' equally exposed to the same risk. In general, it is a contract in which one party agrees to pay for another party’s financial loss, resulting from a specified and insured event.

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Born in the early 1950s, the Nepali insurance sector has shown a tremendous growth in recent times, especially after the enactment of the new Insurance Act-1992 and Insurance Regulation-1993. Today, there are 21 insurance companies, comprising of four life and 17 non-life companies.Considering the present market size, some industry insiders think that the Nepali insurance market is nearly saturated. The government should now either encourage mergers or introduce deterrent factors to stop further proliferation of similar companies, like increasing the amount of paid-up capital, they suggest.
However, S K Gorkhali, general manager of the latest entrant in this field, Siddhartha Insurance, does not agree. He says that there is many a vista that Nepali insurance sector is yet to discover. "The market is not yet saturated. The insurance market can be expanded, as there are more sectors to be explored like house-hold insurance sector, agriculture insurance, cattle insurance and many more,” he adds.
Rajendra Khetan, former president, of the Nepal Insurers' Association agrees with him. “Nepali insurance market is still virgin,” he says. Available data supports his logic. In Nepal, below one per cent of the household savings find their way into life insurance, compared to 30 per cent in Japan, the largest life insurance market in the world.Insurance is the foundation on which the entire superstructure of industry grows and economy stands. For Nepali economy, which is considered vulnerable most of the times, it is the last refuge.
Considering the small capital investment, it is worth the insurers while to insure one's personal or commercial property or assets.“The most important thing for the growth of the insurance sector in Nepal is awareness,” says Murari Raj Sharma, chairman and CEO of the Rastriya Beema Sansthan, the highest contributor to the government bond. “The hindrance has been the low per capita income of Nepalis,” he adds. For making the insurance sector robust, awareness needs to be propped up by a rise in the per capita income, he feels.This sector not only contributes towards the national economy by generating revenue for the government, but it can provide a vast, long-term source of funds that can be used for infrastructure development.
Despite the insurance market in Nepal growing at a rate of around seven per cent to 11 per cent, the share of insurance premium in the Gross Domestic Product (GDP) remains negligible. It could contribute to the GDP more significantly in the long-term, if the government extends supportive measures. Little changes here and there would achieve nothing, feel industry players. It requires a radical departure in terms of policies to change the fortunes of the insurance sector.
In sharp contrast to the need of this fledgling industry to ensure consumer confidence, some insurance agencies are already being accused of a high degree of unethical practices like insurance on credit, poor claim settlements and financial anomalies within the insurance companies themselves. Although, the government has set up an Insurance Board (IB) as the insurance regulatory authority to oversee the operations of insurance companies and safeguard public investments, the charges of malpractice continue to mushroom.
“We have been continuously monitoring the insurance companies. When we find some wrongdoings, we penalise the agency to safeguard customers’ interests,” said Madhav Prasad Upadhayay, chairman of the Insurance Board. The board is also working on standardising accounting practices to raise capacity, effectiveness and credibility of companies, especially in the context of World Trade Organisation (WTO), wherein Nepal has already committed to open up the sector to foreign investors from 2009.
The board has taken initiatives following its findings that the pattern of bookkeeping in insurance companies varied widely and their way of maintaining records was below par. It is more than a responsibility of the board as the total accumulated investment in insurance sector has grown to five billion rupees at present and is increasing.Industry players seem supportive to the Insurance Board’s actions to make the insurance sector more responsible and respectable. They suggest that the board should come up with a strict circular for making additional provisions on uncollected premium.
The sector is marred with many other problems like VAT, from which only the government can relieve it. Industry insiders have also suggested the establishment of a re-insurer within the country. Currently all the 21 companies are venturing out of Nepal for reinsurance. The establishment of a reinsurer can help stop the outflow of foreign exchange and spread a healthy risk within the local market.
In today’s world, to visualise commercial, trading or industrial investment without the backing of insurance protection is impossible, as any entrepreneur first seeks protection for his investment.
Insurance protection is required at each and every step to insulate the investment against any unforeseen perils — natural, accidental or man-made. Nepal cannot remain aloof to the shield of insurance. For the sake of ordinary citizen, business ventures and economy at large, honest attempts need to be made to encourage the insurance sector.

Wednesday, June 21, 2006

Nepali Pharmaceutical Industry needs medication

The National Drug Policy 1995 has directed all the government ministries ‘to include drug industry as a priority sector’. But even after a decade, domestic industries feel that they are not getting enough attention from the government.
“In practice, government policy favours imports,” complained Umesh Lal Shrestha, managing director of the Quest Pharmaceuticals. “Both the Drug policy 1995 and Ausadhi Utpadan Samhita 2041 are outdated. They need to be updated and made supportive to the domestic pharma industry.”
In 1990, when the National Drug Policy was formulated, there were only a few pharmaceutical industries in Nepal. But at present there are more than three-dozen domestic pharma industries that are operational. It is not strange that they want more government support today.
“Nepal needs to treat imported medicines in a similar fashion as Nepali pharmaceutical exports receive in neighbouring countries”, is the general demand from the domestic players.
“While Nepal charges $1,500 as inspection charge from a company from SAARC, India, for example, charges $5,000. For a product registration, while Nepal charges $10, India charges $150. This clearly shows that Indian domestic companies have a greater protection,” Shrestha informed.
"We want our government to lobby for us, like it does for garment sector," said P J Pandey, managing director of Lomas Pharmaceuticals. “We want to take advantage of being a Least Developed Country and sell our products abroad,” he said adding that the government needs to start economic diplomacy to promote the domestic pharma industry abroad.
"With modern technology in place, the Nepali pharmaceutical sector is capable in producing quality drugs. We can export and compete with others, if the government gives us a little support," Pandey added.
One of the major objectives of the National Drug Policy-1995 was to enable the local pharma industry to ‘to produce 80 per cent of the essential drug formulations in the coming ten years’.
“However after ten years, we have achieved only 45 per cent of the total target,” said, Bhupendra Bahadur Thapa, director general at the Department of Drug Administration (DDA). “But we are moving in the right direction,” he added.
“It is possible, if all the domestic companies start producing at least one essential and one life-saving drug,” said Suresh Prasad Pradhan, president of Nepal Chemist and Druggist Association (NCDA).
With an annual projected growth rate of around 19 per cent, pharmaceutical sector is probably one of the fastest growing industries in Nepal.
The domestic sector at present claims a-three billion rupees worth of market, which is around 35 per cent of the total eight billion rupees pharmaceutical market in Nepal.
Foreign companies occupy almost 65 per cent of the drug market. Even among the foreign brands, Indian companies are dominant.
The other problems besetting the Nepali pharmaceutical sector are VAT and smuggling of drugs through the porous Indo-Nepal border.
According to Shrestha, "There should be no VAT on raw materials, packaging material and machines.”
APPON and NCDA both raise concerns over VAT and extra taxes like 1.5 per cent security tax levied on raw materials.
Besides these, issues like too many players and lingering doubts over the quality of the medicines produced, are headaches that the pharmaceutical sector here is still carrying.
Today, there are 40 Nepali companies. Alongwith the 201 foreign companies, they are offering 7,299 brands now.
The debate whether the existence of this large number of pharmaceutical companies is good for Nepal or not continues.
Unlike other products where more brands usually mean more choice for consumers, the large number of brands in the pharmaceutical sector is only encouraging unhealthy practice, feel most industry insiders.
"It is not like noodles that a consumer chooses as which product to eat. Rather, it is prescribed by an expert and a consumer has no choice," said Sarad Chandra Ojha of Sumy Pharmaceuticals.
"We are working on reducing the number of brands to control unhealthy practices," Bhupendra Bahadur Thapa, director general at the DDA said, adding that the practice of giving incentives is unethical in pharma business. “We have been working with APPON and NCDA to control this unhealthy practice.”
Rajesh Shakya, director of the Florid Laboratories, however, does not agree, "More brands mean no harm. But quality should be maintained, a matter that government should continuously monitor.”
“Some foreign companies, which were inspected long time back need re-inspection as it is a matter of life and death to people,” said Shrestha. Pradhan also agreed that the quality control is a must.
“Government should have a well-equipped body for quality control. The quality is tested once when a foreign company registers its products. Further checking is done every year or on specific complaints. This practise should be discouraged,” Shrestha said. “Medicines entering Nepal should be regularly tested at the customs points by the authorities.”

Tuesday, June 20, 2006

Aviation: Cramped for space, stretched on costs

Aviation refers to flying using aircraft, machines designed by humans for atmospheric flight. More generally, the term also describes the activities, industries, and regulatory bodies associated with aircraft.

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After the government adopted a liberal aviation policy and opened the skies for private airliners in 1992, the state-owned Royal Nepal Airlines Corporation, now Nepal Airlines Corporation (NAC), received the taste of competition for the first time since its inception in 1958.
The nascent private aviation industry, as was expected, took a little time to take off. In the early 2000, when the Maoists movement neared its peak, the uncertainty that dogged surface transportation has, due to repeated and prolonged bandhs, came as a godsend for domestic airlines.
The resultant boom in the number of air passengers broke the traditional belief that Nepali aviation sector is totally dependent on tourism. Although, there is little doubt that tourism is the backbone of aviation industry. Being a small country with a small population, the scale of numbers obviates the dependence of aviation sector on the tourism industry. However, "In recent times, slack in tourism industry has hit the aviation sector badly," experts claim.
Cosmic Air, in the newfound garb of a budget airline, has triggered a price war in the Nepali aviation industry, making air travel affordable to the general public. But, industry experts doubt the long-term sustainability of such a plan or the very existence of such a company.
Globally, low-cost carriers, also often called as no-frills airlines, have been a resounding success. But since, any domestic aviation company in Nepal can hardly be described as ‘an airlines with frills’, the scope for drastic cost cutting can truly be internecine and self-destructive.
High operational cost and rising fuel prices are something that Nepali airlines can do nothing about and as prices are brought down, the ability to absorb any shock from rising fuel prices becomes paltry.
Due to volatile and limited market, the mortality rate in Nepali aviation industry has already been high. Already, the once market leader in the domestic industry like Necon Air had to bite the dust.
“Every year, one airlines goes bankrupt,” Rabindra Silwal, general manager of the Gorkha Air, said, adding that there is a problem of long-term sustainability due to myopic financial policies and constant fire fighting.
With rising oil prices, wafer-thin margins and intense competition, survival itself is a challenge. To sustain in this cutthroat environment, most private airlines are accused of concentrating on profitable routes only. However, it is not the whole truth.
Air service plays a very important role in transportation, especially in hilly mid-western region. Private airlines also fly to these remote areas, where only NAC used to fly earlier. Many remote districts, which are not connected through road links need air transportation to ferry essential goods like medicines and food grains.
Aviation experts suggested that the government should form a fund from the money they earn from trunk routes and give subsidy to remote areas.
One cannot claim that the size of Nepal's aviation market is growing exponentially. But the market size has not been a constraint. According to a report, three million passenger fly everyday in US. But in comparison to India, which has a much larger population than the US, only 12 million people travel by air, every year.
Despite the growth in the industry, many are skeptical of the long-term survival of airlines as there is no consistency in passenger numbers. “There is an increment in passenger numbers on certain sectors but not all the sectors are doing well,” said Silwal of the Gurkha Air, the oldest operating airlines in the domestic sector that has started its operations in 1996.
Out of the 38 Airlines that received the Air Operator Certification (AOC), only 17 are operational now. Volatile fuel price and poor infrastructure are key reasons that the sector could not grow as desired.
“Fuel costs occupy 20 per cent of the total operational cost. This effects pricing,” said Birendra Bahadur Basnet, managing director of Buddha Air, which claims to occupy the biggest market share of around 60 per cent of the total domestic sector.
"The global fuel market is volatile and so is the Nepali market,” he said, "When the fuel price is hiked, airlines will have no choice but to hike fares."
The other daunting problem is the poor condition of airports. Most airports outside Kathmandu, have no fire fighting measures. Neither do they have passenger waiting hall, baggage clearing facilities, X-ray machines, drinking water, proper toilets, emergency first aid kits or departure/arrival facilities.
Apart from a continuous harassment for passengers, the lack of essential infrastructures like fire fighting mechanisms or X-ray machines may prove a great threat to security.
Compared to other international airports, the standard of facilities and security at the Tribhuvan International Airport (TIA) itself, at best, can be described as pedestrian.
Even the capacity of Tribhuvan International Airport (TIA) is under scanner. The question that is often raised is, ‘can TIA handle the increasing number of aircrafts' flow that the domestic and the international airlines are adding?’
The need of another international airport, of international standard, has also been felt for some time now, which will help manage the flow of international tourists more effectively.
For decades, NAC has been synonymous with the aviation industry in Nepal. Once described as one of the world's finest airlines, NAC has suffered from a loss of image and money in recent years.
Aviation is a very capital-intensive business. To generate more funds, government can look to Non-Resident Nepalis (NRNs) to invest in infrastructure development in the aviation sector.
Apart from that Hotel Association of Nepal (HAN), TAAN, and Nepal Tourism Board (NTB) can also work together to rescue the national flag carrier and the aviation sector as a whole, as they all enjoy what it brings in.
With select international routes having been opened to domestic Nepali airlines, there has been a new glimmer of hope. The rush of migrant labourers in the post-1990 also added shine to this business.
New Nepali airlines like Air Nepal tried to cash in on these routes but without much success.
Another domestic player, Cosmic Air has been making it by the skin of its teeth by flying to neighbouring countries like India and Bangladesh, on and off. It has been flying to the Indian capital New Delhi, Kolkata and Varanasi in India and Dhaka in Bangladesh.
A recent development has indicated that the Air Services Agreement (ASA) with India will be reviewed and the number of destinations where Nepali airlines can fly will be increased.
Nepali airlines could so far fly only to Mumbai, New Delhi, Kolkata, Chennai, Bangalore and Varanasi. But recently India has agreed to let Nepali airlines fly to 18 more Indian cities, which will definitely boost Nepali aviation industry in the days ahead.
Balkrishna Shrestha, general manager of Cosmic Air is hopeful that the recent development might be helpful to increase new destination in India. “Earlier, due to seat limit and destination limit we could not fly to many Indian cities. Now we are planning some more destinations in India.”
With the sudden increase in the number of airlines, not only pilots but also the cabin crew and hordes of other jobs have increased. The aviation industry has played a major role in the overall economic growth of the country and the government should not ignore the possibility of helping the industry in its growth and improvement efforts.
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Chronological signposts
1947: A lone pilot landed his glider on the old golf course, which makes the present location of TIA.
1949: The date heralded the formal beginning of aviation in Nepal with the landing of a 4-seater lone powered vintage Beach-craft Bonanza aircraft of Indian ambassador Sarjit Singh Mahathia at Gauchar.
1950: The first charter flight By Himalayan Aviation Dakota from Gauchar to Kolkata.
1955: King Mahendra inaugurated Gauchar Airport and renamed it as Tribhuvan Airport.
1957: Grassy runway transformed into a concrete one.
1957: Department of Civil Aviation founded.
1958: Royal Nepal Airlines (RNAC) started scheduled services domestically and externally.
1959: RNAC fully owned by HMG/N as a public undertaking.
1959: Civil Aviation Act-2015 BS, promulgated.
1960: Nepal attained ICAO membership.
1964: Tribhuvan Airport renamed as Tribhuvan International Airport.
1966: ATC services taken over by Nepali personnel from Indian technicians.
1967: The 3750 feet long runway extended to 6600 feet.
1967: Landing of a German Airlines Lufthansa Boeing 707.
1968: Thai International starts its scheduled jet air services.
1972: Nepali jet aircraft Boeing 727/100 makes a debut landing at TIA.
1975: TIA runway extended to 10000 feet from the previous 6600 feet.
1975: CATC established.
1976: FIC (Flight Information Centre) established.
1977: Nepal imprinted in the World Aeronautical Chart.
1990: New International Terminal Building of TIA inaugurated by King Birendra.
1992: Adoption of Liberal Aviation Policy and emergence of private sector in domestic air transport.
1993: National Civil Aviation Policy promulgated.
1995: Domestic Terminal Building at TIA and Apron Expanded.
1998: CAAN established as an autonomous Authority.
1998: COSCAP-SA Project established.
2002: Expansion of the International Terminal Building at TIA and the construction of a new air cargo complex.
2003: Rara airport (Mugu), Kangeldanda airport (Solukhumbu) and Thamkharka airport (Khotang) brought in operation.
2004: Domestic operation by jet aircraft commenced.
2005: International flights by two private operators began.
(*All updated contents are referenced from Civil Aviation Report 2005)