Nepal Airlines (RA, Kathmandu) has drafted a cost optimisation plan to help deal with the lack of human resources, unpaid aircraft instalments, grounded aircraft, low traffic and fewer international destinations which are the main reasons being cited by the airline for its current financial crisis.
Speaking to The Himalayan Times on November 6, the Executive Director of Nepal Airlines Corporation (NAC) Madan Kharel stated that the plan that has been divided into revenue maximisation and cost minimisation segments.
In terms of costs, the national flag carrier has set an annual target to save around NPR2.27 billion (USD20 million) by the end of this fiscal year.
Similarly, when looking at revenue maximisation, NAC wants to increase its revenue from services like ground handling, parts maintenance and engineering services. In the first three months of FY2019/20, NAC was able to collect revenue worth NPR4.29 billion (USD 37.8 million) and expects to earn NPR17.25 billion (USD152 million) in revenues by the end of the financial year.
To drive further revenues, NAC is undertaking market research on seven international destinations, namely Beijing and Shanghai Pudong in China, Dhaka in Bangladesh, Yangon in Myanmar, Hanoi Noi Bai International in Vietnam, Phnom Penh in Cambodia, and Colombo International in Sri Lanka.
This market analysis is still being conducted despite the fact that its planned routes to Riyadh, Guangzhou, and Tokyo Narita were being delayed from starting until March 2020.
Before the latter two routes will be permitted to start, the Civil Aviation Administration of China (CAAC) will have to conduct a safety audit of NAC in December, while the carrier is in the process of obtaining approval from the Japanese Civil Aviation Bureau (JCAB) for starting non-stop flights to Tokyo. “We plan to submit all required documents to JCAB by November 2019,” Kharel said, adding: “The process of appointing a general sales agent for Saudi Arabia is in the final stage.”
