Get Connected

Kathmandu Nepal
Partly sunny

Tourism News

Aviation industry is heavily reliant on tourism industry for growth: Rai

Feb 15 2016 | 05:20 pm

Interview with Umesh Chandra Rai, Chief Executive Officer, Yeti Airlines

Umesh Chandra Rai

Umesh Chandra Rai

Tell us about the impact of the current political impasse and the ensuing fuel crisis on the domestic airlines operating in the country?

The impact has been very negative on all socio-economic aspects of the country. Domestic airline companies are heavily reliant on tourism sector for its growth as well as survival. This is because Nepal’s economy is small and not fully developed, and many Nepalis still cannot afford to fly. It is also true that tourism industry gives much bigger yield as the tourists have to pay different set of fare which is higher than what the Nepalis have to pay. And following the devastating earthquake the country witnessed in April coupled with the current political problems, the blockade that has created serious shortage of essentials and the negative news all this has sent to the rest of the world, the tourism sector of the country has been hit very hard and is at the verge of collapse. So naturally Nepal’s airline companies are in deep trouble as tourism is their bread and butter.

Can you elaborate on the growth prospect of domestic airlines in Nepal?

If the economy grows and average Nepalis do have more dispensable income and can afford to fly, we will definitely witness significant growth. If the economy does not prosper, we would see stagnation or, worse, even shrinking of the market. As we are more reliant on the tourism sector at the moment, our growth prospect entirely depends on the political situation of the country.

The government is building few regional and international airports in the country to enhance both air connectivity as well as tourism. Will they contribute towards the growth of aviation sector?

Of course, any additional aviation infrastructure would definitely help in the growth of the aviation sector. But I think the government and the tourism industry should first focus on developing the existing Tribhuvan International Airport in order to make services it provides more reliable, efficient and as per international standard. It is a good thing that we would soon have regional international airports in Pokhara, Nijgadh and Bhairahawa. However, Kathmandu is still the main entry point for most of the tourists visiting Nepal and also the top destination because the valley has a very rich history, culture, unique arts and architecture and many tourists want to experience that first-hand. It is also very centrally located and facilities here are more developed than elsewhere.

Yeti Airlines is one of the best performing domestic airlines in the country. What could be the reason behind its success?

Aviation business is a high-risk venture with a fragile business environment. Many airline companies in the world have turned bankrupt amid high operating costs and massive competition.  Very few Nepali airline companies have survived their first 10 years. Why Yeti has managed to survive for over 10 years simply goes down to the sheer commitment of its owners to provide quality service, maintain sound management and business practices and invest in long-term planning and out-of-the-box approaches to tackle problems and challenges. Many airlines in Nepal initially came with very short-term approaches — they looked at the present and didn’t plan for the future. As soon as they had one bad season, they were pushed into a delicate situation. Of course, political instability and lack of tourist arrivals also hampered revenue growth.

One of the biggest concerns of aviation industry over the last few years has been safety. What is Yeti doing to ensure better safety standards?

There are two factors—macro and micro — when it comes to aviation safety in Nepal. If you talk about the macro issue, European Union and International Civil Aviation Organization (ICAO) raised serious concern over the functioning of Civil Aviation Authority of Nepal (CAAN). CAAN has to very robust and strong to ensure that there will be no violation of rules and regulations by airline operators and come up with better strategies to encourage Nepali carriers to focus on safety. On the micro-level, there are some very good players in the aviation industry and some are not up to the mark. For instance, if you look at Yeti and Tara, we have taken a robust approach to safety in the last four years. We have adopted ICAO recommended safety management system (SMS) as the cornerstone of our safety policy. World Food Programme, which has aviation safety unit, also audited our safety standards and later we implemented the recommendations they made. So we are now qualified to compete for their global tender. We have been audited by two international aviation safety audit firms: ICF, an American audit firm, and AQS, a German audit firm that is part of Lufthansa. We managed to meet both their safety standards. We have also applied for a new IATA standard audit and have been audited. We are quite confident we will get the clearance and become the first Nepali airlines company to receive IATA level recognition.

Do you think Chinese investment will be welcome in Nepal’s airline industry?

Definitely, any kind of Chinese investment in Nepal’s aviation industry will always be welcome, either it be for building aviation infrastructure such as airports, hangars and terminals or in the form of Chinese investment in Nepali airlines. Chinese investment can definitely make the environment much more exciting and professional. As far as Chinese investment in Nepal’s private airlines sector is concerned, there have been Chinese operators in the past and I think they will be there in the future too if Nepal’s tourism industry grows along with the country’s economy.


Kathmandu, Nepal

Editorial and Marketing Enquiries

Email: [email protected]

Phone: +977-9841223318


© 2018 Travel News Nepal, a division of Bedrock Communications Pvt Ltd

Get Connected