The prospect of wide-body in Nepali aviation

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2017 is already looking as an exciting year for the Nepali aviation industry. The national flag carrier carrier, Nepal Airlines (NA) made a positive start by carrying the highest number of international passengers from the Tribhuvan International Airport (TIA) in 2016 thereby ending the dominance of gulf and foreign carriers. Similarly, private airlines on their part are set to make 2017 a promising year. Buddha Air and Yeti Airlines are adding ATR 72s, Saurya Airlines is preparing for another CRJ, Goma Air adding more LET-410s, Himalaya Airlines increasing the number of Airbus A320s and Shree Airlines (the helicopter company planning to operate regional aircraft CRJ-200s. The most exciting prospect out of them is the procurement of wide-body Airbus A330-200 by the NA that is set to boost the Nepali aviation and tourism industries.

The Nepali aviation industry does not have much of a history operating wide-body aircraft. The infamous “Lauda Scandal” reminds us how political interference damaged our national flag carrier. The then Royal Nepal Airlines Corporation (RNAC) leased a wide-body Boeing 767 from Austrian Lauda Air in 2000 despite severe protests from officials citing rampant corruption and higher market operation costs. The eventual consequences were the suspension of senior RNAC executives and civil aviation minister. Another unsuccessful attempt was initiated by one Air Nepal International, a private operator, to operate Boeing 767 that barely lasted six months. Boeing 767 was the preferred wide-body aircraft since it shared type rating with Boeing 757, and due to availability of NA’s Boeing 757 crew members. The current NA fleet includes two Boeing 757s that are close to retirement and two narrow-body Airbus A320s. It plans to operate all Airbus fleet for commonality and reduce costs related to training, operations, and maintenance. The recent unanimous board agreement on efforts of NA CEO Sugat Ratna Kansakar to acquire two Airbus A330-200 from US-based AAR Corp has paved the way for purchase of the first ever-wide body aircraft.

Purchase of Airbus A330 will be a game changer for the NA and the aviation industry of Nepal. The commonality in cockpit and cabin systems allows many airlines that fly narrow-body A320 to operate wide-body A330 with ease. A330 has higher capacity and provides medium to long haul service. Air Asia, for example, operates A330 on a medium haul of 4-5-hour flight on Kathmandu-Kuala Lumpur route whereas Turkish Airlines operates A330 on long haul of 8-9-hour flight on Kathmandu-Istanbul route. The NA plans to launch direct flights to South Korea, Japan, and Australia after the arrival of A330s. New long haul routes like Osaka-Kathmandu, Seoul-Kathmandu and Sydney-Kathmandu will offer opportunities for Nepali labor migrants, students and potential tourists. Prospective future markets include flights to Europe and the US. The NA can also utilize A330 as a substitute to A320 for Gulf, Hong Kong and South East Asian routes during higher passenger flow. A330 can also provide optimum cargo capacity to better service labor concentration markets that prefer carrying extra baggage and belongings to Nepal.

Airbus A330-200   (Photo Courtesy- Airbus)

The success of Airbus A330s will largely depend on NA’s competent management and the support of Nepali aviation industry. The flag carrier plans to induct the first A330 into its fleet by September 2017 and the second by March 2018. The ongoing preparations to receive the delivery of first A330 six months from now seem impromptu and inadequate. For instance, Delta Airlines will be the first US airline to operate the A350 in early Fall 2017. Airbus requires first time operators of A350 to begin preparations for the new aircraft 21 months prior to the delivery date. A mere comparison shows the NA severely lacks critical groundwork and essential preparation. The NA will certainly face issues like shortage of crew members, skilled maintenance workers, and qualified human resources for A330s. Considering an average price of $231.5 US million dollars for a single A330-200, Kansakar and his team has undoubtedly seized a sweet deal with an offer price quotation of $104.8 US million dollars. Nonetheless, Kansakar has a challenge to answer criticisms on the accusations of third-party commissions despite his initial preference to buy straight from Airbus. Moreover the NA needs to collaborate with the Civil Aviation Authority of Nepal to find solutions for issues concerning congested air traffic and limited parking space at the TIA. Completion of regional international airports at Bhairawaha and Pokhara, and TIA renovation along with the introduction of flexible international air routes and open-sky policy will define the fate of NA and Airbus A330s.

Artist concept of Nepal Airlines Airbus A330    (Photo Courtesy- Aircraft Livery Nepal)

Airbus A330 is indisputably the preferred wide-body aircraft for NA. The recently-purchased Airbus A320s have helped the NA regain its international market share. But the honeymoon period seems to be over, as the Nepal-China joint venture, Himalaya Airlines, will soon compete in similar routes with the same type of airplanes. A330s will offer NA much needed support and overall boost for tourism industry. Kansakar was instrumental in addition of the existing A320 aircraft. Ironically, Kansakar in his previous tenure as the executive chairman of NA, had officially signed a MOU for a wide-body A330 and a narrow-body A320 during the 2009 Dubai Air Show, which later was changed to two A320s. We wish good luck to Kansakar and his team for the procurement of Airbus A330s.

Hardik Gurung currently works as a Sr. Business Analyst at Delta Airlines, Atlanta and Harsit Gurung works as a Sr. Business Analyst for NextEra Energy, Florida. They both have Master’s Degree from School of Business at University of Houston-Clear Lake and Bachelor’s Degree from Paseka School of Business at Minnesota State University Moorhead. They run a popular Instagram page “AviationNepal” that focuses on Nepali aviation and regularly posts articles related to aviation and airlines.

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