LPG shortage temporary : NOC

SANGAM PRASAIN
KATHMANDU, APR 08 -

Nepal Oil Corporation (NOC) has said that the supply of liquefied petroleum gas (LPG) throughout the country was in a comfortable position.

Explaining the reason behind the queues for cooking gas in Dharan and other cities, NOC spokesman Mukunda Dhungel said that there had been a temporary shortage due to a strike by trade unions excluded from the recent salary hike deal. “Now there is no need to worry about a shortage,” added Dhungel.

However, it will take one more month for normal supply of LPG. Gas bottlers said the shortage was likely to remain till May. LPG is still in short supply in the country’s major cities. The state-owned petroleum monopoly that imported 15,600 tons of LPG from India in March, had requested Indian Oil Corporation (IOC) for 19,000 tons of LPG for April. “If NOC imports 19,000 tons of LPG in April, the supply will become normal by May,” said Suresh Prajapati, general secretary of the Nepal LP Gas Industry Association.

Gas bottling companies admitted that NOC had increased the supply of LPG in March.

The long queues in the market, according to gas bottlers, were due to a decline in imports

by NOC in January and February. “Imports were slashed to about 12,000 tons in January and February which had affected supply in March,” said Prajapati.

Consumption of LPG increased by 16.29 percent in the first eight months of the current fiscal year compared to the corresponding period in the last fiscal.

According to NOC statistics, the country imported 100,557 tons of LPG in the first eight months of the current fiscal year against 86,455 tons during the same period in the last fiscal year.

LPG consumption started rising after 2007-08 when imports surged by almost 20 percent. In 2009-10, LPG imports increased by 21 percent to reach 141,171 tons.

Gas bottling companies said the reason behind the sharp rise in LPG imports was the increased number of households using LPG for cooking. The energy crisis has also prompted people to turn to LPG.

Int’l air passenger movement up 20pc

SANGAM PRASAIN
KATHMANDU, APR 03 -
International airlines operating in Nepal saw a 20.19 percent rise in passenger movement in 2010 compared to 2009.

Tribhuvan International Airport (TIA), the sole international airport in Nepal, reported that passenger volume in 2010 reached 2,436,558 against 2,027,147 in 2009. All the major airlines, particularly those connecting labour destinations, witnessed greater business compared to 2009.

According to the TIA report, Qatar Airways, Air Arabia, Etihad Airways, Fly Dubai, Bahrain Air and Oman Air reported the strongest full-year passenger growth.

TIA statistics paint a bleak picture of the national flag carrier Nepal Airlines Corporation (NAC). Marred by series of controversy and inability to purchase new aircraft, the NAC recorded a negative growth in passenger movement in 2010. It lost 2.17 percent to take the third place in terms of passenger movement. Thanks to the healthy growth in migrant workers’ departure, most of the airlines from Middle East registered handsome growth in 2010.

Qatar Airways, Air Arabia, Etihad Airways and Bahrain Air recorded passenger growth of 19.49 percent, 18.84 percent, 49.39 percent and 42 percent, respectively.

New entrants Oman Air and Fly Dubai also saw a healthy passenger growth in 2010. However, Gulf Air posted a negative growth in passenger movement with the number of passengers dipping by 25 percent. Except Indian Airlines, airlines based in India reported a healthy growth in passenger movement last year.

The entry of more India-based airlines in Nepal saw the Indian Airlines losing passengers. While the Jet Airways and Jet Lite International posted 52 percent and 4.46 percent growth, respectively, Indian Airlines recorded degrowth of 12.38 percent. Same was the story with airlines from China, with all three Chinese airlines - China Southern, China Eastern and Air China- enjoying growth in 2010.



Int’l Airlines passenger movement

Airlines 2009 2010

Qatar Airways 251,214 300,184

Jet Airways 167,849 255,161

Nepal Airlines 237,751 232,577

Gulf Air 238,527 178,887

Thai Airways 186,466 175,422

Indian Airlines 199,770 175,022

Air Arabia 131,386 156,147

Etihad Airways 77,981 116,496

Jet Lite 107,271 112,060

Biman Bangladesh 70,727 105,971

Fly Dubai —— 81,446

Dragon Air 47,658 68,977

GMG Airlines 37,077 60,425

Kingfisher —— 55,470

Silk Air 52,372 52,906

Pakistan Int’l 58,161 47,610

Bahrain Air 32,877 46,726

Air China 29,620 36,536

Korean Air 33,099 31,528

(Source: TIA)

March tourist arrival fall short of 2011 target

SANGAM PRASAIN
KATHMANDU, APR 01 -

After posting hopeful growth of 26 and 12 percent in January and February, respectively, tourist arrivals via air in March fell into single digit growth. Arrivals in March grew by just 4.6 percent due to decline in arrivals from Europe.

Nepal Tourism Board (NTB)’s statistics show growth in tourist arrivals slowed down in the first three months (January-March) of 2011 compared to the same period in 2010. According to NTB, arrivals grew by 12.5 percent in the first three months of 2011, while the growth during the same period last year was at 29.78 percent.

The Nepal Tourism Year has targeted 700,000 tourists and March is considered one of the prime tourist season. European arrivals posted a negative growth of 12.6 percent in March. Arrivals from the major European markets such as the UK, Germany, the Netherlands, Spain and Switzerland registered negative growth of 27 percent, 16.1 percent, 20.3 percent, 43 percent and 7.7 percent, respectively.

Travel trade entrepreneurs are surprised by the decline in European arrivals. “We are also surprised why the European market is declining,” said Ashok Pokharel, president of the Nepal Association of Tour Operators (NATO). He added that there was a need to think seriously about the downturn in the European market which is a source of high-end travellers. Some entrepreneurs attribute this decline to increase in international airfares catalysed by rising aviation fuel price. “The major reason behind the decline in the number of European tourists is a hike in airfares with the price of aviation fuel rising continuously in the global market,” said Rajendra Bajgai, general secretary of the Trekking Agencies Association of Nepal (TAAN). “Coming to Nepal from Europe without direct connectivity is very expensive.”

Gandaki Tours and Travels Managing Director Ram Kazi Koney agrees with Bajgai. Koney said lack of direct flights between Nepal and Europe is one of the reasons behind the slump. “Moreover, promotion and marketing of Nepal Tourism Year-2011 has not been carried out in Europe, and this has also affected growth in the Europe segment,” Koney added.

The International Air Transport Association (IATA) has warned that fuel prices could increase and the global aviation industry will face a setback. In addition, Japan produces 3-4 percent of the global jet fuel supply, some of which is exported to Asia. Some of this refinery has been lost due to damages caused by the earthquake. This supply restriction could lead to higher jet fuel prices. “Airfares are rising already with numbers of international airlines increasing fuel surcharges because costs for fuel increased drastically,” said IATA.

India, which is the major market for Nepal, recorded a growth of 28 percent while Sri Lanka and Pakistan posted a growth of 38.3 percent and 6.8 percent respectively. However, arrivals from Bangladesh declined by 2.5 percent. The South Asian segment registered a growth of 22.5 percent. Arrivals from Asia other than South Asia also recorded a growth of 15.1 percent. Arrivals from China and Japan increased 15.2 percent and 9.6 percent respectively. Similarly, arrivals from South Korea, Thailand, Malaysia and Singapore increased by 12.1 percent, 51.9 percent, 16.2 percent and 10.8 percent respectively. Tourist arrivals from the US increased 22.7 percent while arrivals from Australia, New Zealand and Canada saw a negative growth of 3.7 percent, 13.5 percent and 5.3 percent respectively.

TIA to install CUTE system in June

SANGAM PRASAIN



KATHMANDU, APR 01 -
Tribhuvan International Airport (TIA) has planned to install common user terminal equipment (CUTE) that enables passenger check-in and e-ticketing in an integrated way in a bid to modernise the country’s only international airport using IT. A TIA official said that the system is scheduled to be installed in June.

CUTE provides faster and more efficient passenger processing allowing the airport to handle the increasing number of travellers passing through it. The TIA official added that the system would enhance customer service and eliminate queues as passengers would be able to check in at the desk of any airline.

The departure control system (DCS) currently in use is being operated and managed by the airlines themselves. Nepal Airlines Corporation (NAC) is the ground handling agent at TIA.

CUTE is compulsory in international practice providing single software facility to airlines, a network of shared information technology equipment for passenger check-in and boarding, baggage check-in, departure control and airline ticketing.

TIA general manager Ratish Chandra Lal Suman said that SITA of France, a company specialising in air transport communications and information technology solutions, had been entrusted to install CUTE.

“After CUTE goes into operation, passengers will not face any hassles as the existing manual working procedure will be replaced by the computerized system.”

Airports require confirmed approval of 80 percent of the airlines to implement CUTE. TIA has not received NAC’s approval.

After the system is in place, passengers will be charged US$ 1 each out of which TIA will receive 40 percent. TIA will earn an additional Rs 40 million annually from the CUTE facility. Currently, 27 international airlines pass through TIA. The airport handled 2.43 million passengers and 14 million tons of cargo in 2010.

TIA to start 24-hour operation

SANGAM PRASAIN
KATHMANDU, MAR 31 -

In a bid to curb air traffic congestion and takeoff and landing delays, Tribhuvan International Airport (TIA), the country’s only international airport, is preparing to start round-the-clock operation from October.

Projected rise in the number of passengers in 2011, increased international airlines flight frequency and continuous traffic growth for the last couple of years are some major reasons prompting TIA to start 24-hour service, said a TIA official.

According to TIA’s passengers’ and aircraft movement data, the year 2010 saw a total of 3.99 million passengers movement, against 3.40 million in 2009. In 2010, TIA handled 586,244 additional passengers, up by 17. 21percent, compared to 2009. In terms of aircraft movement, the airport processed 99,291 aircrafts in 2010, against 91,892 in 2009, up by 8.05 percent.

TIA handles 27 international airlines and 13 domestic carriers. Currently, the airport operates 18 hours per day although it is open for 24 hours. With the Nepal Tourism Year-2011 targeting 700,000 air passengers, 200,000 more to what the country had received in 2009, TIA’s operation hours had been a serious issue.

Also, international airlines planning for additional flights will also add pressure on TIA. Recently, China Southern and Dragon Air doubled their flight frequency to Kathmandu, while Spice Jet doubled its flight to 14 from seven per week and Oman Air increased its seven flights per week to nine. The Indian domestic carrier IndiGo is also expected to join Nepal soon.

As per the NTY target, the airport has to process 400,000 additional passengers (arrival and departure). “As per the target, we have planned to operate flights from 5pm to 12am, which is an unoccupied time interval,” said Ratish Chandra Lal Suman, general manager of TIA. Recently, Qatar Airways, Dragon Air, China Southern and Air Arabia are operating evening services. Although the plan for round-the-clock operation is only meant for international carriers, TIA said to ease domestic air traffic congestion it plans to dedicate morning time for domestic carriers.

“We are renovating the existing domestic parking apron to increase facilities and enhance passenger processing capacity. The renovation work will be completed within 45 days,” added Suman.

TIA, which was designed to handle 1,350 passengers per hour, has been processing passengers almost double of the figure. Recently, TIA processed 3,500 passengers in an hour. However, the existing manpower has been a concern for TIA to start full-fledged operation.

“We are assessing the cost benefit analysis, ie, we need extra manpower and have to provide additional incentives to those working in the evening. On the other hand, we have to reduce the parking cost during lean hours to encourage them, which will definitely reduce TIA’s profit,” said Suman.

Officials at the Civil Aviation Authority of Nepal (CAAN), the regulatory body of the aviation sector, said the renovation and construction work has been funded through CAAN’s internal budget, considering the pressure on TIA during the NTY.

Panel to recommend reforms in NOC

SANGAM PRASAIN

KATHMANDU, MAR 29 -

In yet another bid to bring reforms in the state-owned Nepal Oil Corporation (NOC), the government recently formed a committee under the coordination of lawmaker Bhim Acharya.

The committee has been asked to conduct studies on NOC’s losses, shrinkages, leakages and administrative costs and recommend necessary reforms to the government.

Although several committees were formed over the last decade, their reports were always dumped without implementation. However, unlike previous committees, this committee has been formed at the political level by the Cabinet.

What makes the new committee different from earlier ones is it has representation of all major parties at the Constituent Assembly. The idea behind this all-party mechanism is to let the parliament and parliamentarians know the issues plaguing NOC. Time and again, lawmakers have been criticising the government over the price hike of petroleum products.

Fearing public protest, the government always took populist move of giving subsidy to NOC every time when there was need for price hike. Initially, the Ministry of Finance provides NOC with loans which are later converted into grants. “First of all the country imports petroleum products using foreign currency. On top of that, we are giving grants to NOC,” said a senior MoF official. “The government cannot bailout NOC in this manner.” The first meeting of committee held on Saturday decided to collect suggestions from 28 political parties, 13 student unions, consumer rights activists and other stakeholders to formulate a concrete measure to address the problem.

Lawmaker Hari Roka, a member of the committee, said the panel will study the current distribution system, NOC’s administrative cost, price adjustment mechanism, its arrears and even political recruitments. “The committee will draft certain rules and regulations to make the corporation transparent,” he said. Roka added that they have asked NOC to provide all its documents.

In 1995, the government had formed NOC reform committee followed by another committee in 2002 under the coordination of Tapa Bahadur Singh. Another committee headed by Shankar Sharma was formed in 2004 and then next committee headed by Bhanu Prasad Acharya was formed in 2006.

All four previous committees had suggested an automatic fuel price adjustment system in line with the international price, but could not be implemented.

Reform measures recommended successive committees include automatic price rise as per the international trend, petroleum price be increased to the level that covers NOC’s costs and liberalisation be adopted in import and distribution.

However, successive governments have failed to implement these measures and there are doubts whether recommendations made by the new committee will be implemented. Roka himself is not sure over the implementation of recommendations of the new committee. “Reforms in NOC will depend on the next supply minister,” said Roka. The committee is scheduled to submit its report within next 10 days.

Trade expert Posh Raj Pandey said the key and longstanding problem of NOC is the pricing of fuel. “Market forces doesn’t fix the price here, but is done by the government,” he added.

Pandey stressed on the need for appointing multiple suppliers, ending NOC’s monopoly. This will create a competitive environment and people can get oil at competitive rates. “The government should encourage the private sector to step into oil business. It should even offer them incentives for the purpose,” he added. Petroleum dealers are also not confident regarding the implementation of the new report. “Reports are always prepared and dumped,” said Saroj Pandey, president of Petroleum Dealers’ Association, expressing dissatisfaction over the formation of the committee without the representation of the private sector.

However, Ministry of Commerce and Supplies Spokesperson Ganesh Dhakal seemed positive. “For the first time, a high level committee with the representation of several political parties has been formed,” said Dhakal.

Domestic air passenger movement up 12.83 pc

SANGAM PRASAIN

KATHMANDU, MAR 28 -

Stiff price competition among major domestic airlines propelled the demand for air travel in 2010. The figure of domestic passengers’ movement in 2010 depicts the fact that airlines attracted customers by offering low fares.

Domestic air passenger movement saw a robust growth of 12.83 percent in 2010 compared to the previous year. According to the statistics released by Tribhuvan International Airport (TIA), domestic airlines carried 1,554,701 travellers in 2010, or 176,833 more than in 2009.

Meanwhile, domestic aircraft movement increased 4.83 percent in 2010 compared to 2009. There were 79,874 flights in 2010, up 3,683 from 2009. There are eight domestic airlines and five helicopter services currently operating from Kathmandu.

However, intensified price competition will set the alarm bells ringing for major domestic airlines with the oil price rising to a massive level in 2011.

Following the increase in fuel surcharge in February and December last year, domestic airlines had increased their fares last month citing heavy losses. Unexpectedly, airfare soared by over 16 percent which reflects

airlines’ concerns that their businesses in 2011 might not do well like in 2010.

“The year 2010 has been a good year for almost all the airlines; however, the number of passengers has dropped 30-35 percent in the last two-three months due to increased airfares,” said Rupesh Joshi, marketing manager of Buddha Air.

Airlines said that higher tourist arrivals and greater travel by NGOs and INGOs around the country had resulted in an increase in the number of passengers for Nepal’s domestic airlines in 2010.

Buddha Air carried 615,567 passengers in 2010, up 10.53 percent from 2009 while its aircraft movement dropped to 23,238 from 24,797 previously as it began operating larger aircraft, the ATR-72.

According to Joshi, 70 percent of the passengers on domestic airlines are Nepalis. Although, tourist arrivals have been swelling, carriers said their business depended on home passengers. “If the price of fuel continues to rise, the airline business will see a drastic fall.”

Yeti Airlines was the second largest domestic carrier with 478,225 passengers, a drop of 0.54 percent compared to 2009. The number of passengers flying Yeti’s subsidiary Tara Air soared 141 percent compared to 2009. Tara Air started operations in June 2009 and flies on short-haul routes. It carried 42,724 passengers in 2009.

Agni Air’s passenger movement rose 10.94 percent to 193,313 from 174,244 in the previous year. Guna Airlines, which started service in May 2009, carried 96,122 passengers in 2010, up 143 percent from 2009.

The poor performance of Nepal Airlines Corporation (NAC) is also visible in the domestic sector. The number of passengers carried by NAC in 2010 dipped 11.84 percent to 47,081 from 53,406 in the previous year.

The Civil Aviation Authority of Nepal said that domestic passenger movement was projected to grow 10 percent annually.

“TIA handles both domestic and international aircraft through its single runway, and limited airspace and increased air traffic have become a major concern,” said TIA general manager Ratish Chandra Lal Suman.

He added that CAAN was studying the possibility of giving priority to large aircraft at TIA and diversifying small aircraft to regional hubs to ease congestion at Nepal’s only international airport.