All five operators will have equal equity in this new venture that is estimated to be worth US$ 150 million
SANGAM PRASAIN
KATHMANDU, JAN 25 -
The national flag carrier’s inability to acquire new aircraft and the projected rise in arrivals during Nepal Tourism Year has induced five domestic air operators to join forces to start international operations by establishing a new airline.
The country’s leading air operators—Buddha Air, Yeti Airlines, Guna Airlines, Agni Air and Simrik Air—are working to start operations by May 2011.
All five operators will have equal equity in this new venture that is estimated to be worth US$ 150 million. “All the five partners will invest equal equity,” said a source.
Currently, this venture is in the process of being registered and getting an air operator’s certificate (AOC) for international connectivity. “Discussions with the Ministry of Tourism and Civil Aviation (MoTCA) and the Civil Aviation Authority of Nepal (CAAN) are in progress,” the source said.
The new company that is yet to be named will have three aircraft. “We are now looking at Airbus 319, Airbus 320 or Boeing 737-800,” said one of the promoters of the proposed company.
In the past, the now-defunct Necon Air, Cosmic Air, FlyYeti and Air Nepal International had started international service but failed to sustain it. Earlier attempts to start international operations were solo efforts by individual airlines. However, this time five domestic air operators with some having a proven track record have come together.
Birendra Basnet, managing director of Buddha Air, and Vijay Shrestha, general manager of Yeti Airlines, are said to be actively involved in the whole process. Rameshwor Thapa, managing director of Simrik Air, is chairman of this new company. According to sources, multiple options of purchasing aircraft are being discussed currently that include purchase on ACMI basis. “There could be outright purchase also,” said a source. Initially, US$ 5-6 million will be invested in the project.
The new airline will eye major tourist hubs in the region for its business. “As per our plan, we will serve the Gulf countries, Malaysia, India, China and Singapore,” said a source.
With most of the earlier efforts by the Nepali private sector having failed, the promoters have decided to hire an international management team including the chief executive officer to run the airline. “Operation and engineering will be handled by qualified foreign staff,” said the source. With more than 1,700 Nepalis flying out of the country daily, the promoters say getting business won’t be tough.
