“There should be incentive programs for airlines to connect the new airport”

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Abdullah Tuncer Kececi is the general manager of Turkish Airlines in Kathmandu. It is the only carrier connecting Nepal and Europe, and is currently assessing the feasibility of adding the country’s second international airport at Bhairahawa to its network. Turkish Airlines also plans to increase the frequency of its flights to Kathmandu from October as Nepal’s tourism industry picks up. The Post’s Sangam Prasain spoke to Kececi about his outlook on tourism and the aviation industry in Nepal, and its future. Excerpts:

How do you assess the current situation of the tourism industry in Nepal?

The effects of the Covid-19 pandemic in Nepal are about to end. Nepal is one of the destinations that will peak a little faster because most of the tourism activities in Nepal are based on nature and culture. Travelers are keen to visit regions like Lumbini, Kathmandu and Everest which have mixed experiences of culture and nature. Nepal is indeed a most preferable destination because for travelers safety and comfort are important. Nepal has already removed the mandatory PCR report requirement to enter the country, which was, in fact, a correct decision by the government. Nowadays, the tourism industry in the world has changed a bit. There are no advance reservations like there were in years past. After the pandemic, people started traveling without reservations, and that’s a good sign for a country like Nepal.

Will the tourism industry be back to normal by this fall?

I think October will be a good time. Based on the current development and situation, we estimated that after six months, tourism in Nepal will be back to normal. On our end, we are focusing more on the arrival of tourists, especially from markets such as the United States, Europe and Canada.

If we look at past trends, normally tour operators plan tours and trips in advance. In some cases, high-end tourists used to plan to visit a certain country two years in advance, and tour operators used to plan accordingly. For example, to visit in October this year, according to the previous plan or before Covid, the reservation was made a year earlier. But tour operators can’t do that now. People travel when they want. This is a new global trend, and it will benefit countries like Nepal which has opened up to all and lifted all restrictions.

Six months is ideally a decision time for travelers now, even if it’s considered a quick plan. So if all goes as planned, October will be a very good season for Nepal based on the inquiries and bookings we have received. Our October flights are already 80% full.

In the past, there was concern about the lack of infrastructure in Nepal. Now, two new international airports will be operational by this year, and luxury hotel hosts are being built. What should Nepal do to attract more tourists?

Infrastructure is important. Having a new airport is a plus. Pokhara International Airport is not for jumbo jets, but Gautam Buddha International Airport will change that a bit. Nepal needs to start functioning properly and it also needs to start adding pilgrimage packages in the tourist itinerary. We should ensure that the new airport is not just for the movement of labor from Nepal. Its goal is to bring tourists and create an economic opportunity in the region. The government should ask the private sector to also introduce travel packages from Lumbini.

First, Nepal needs to encourage more airlines to fly here. For landlocked countries like Nepal, airlines are the carriers. More airlines means more tourists. But there are worries flying in Nepal. Due to the high cost of aviation, Nepal has become one of the most expensive destinations. If destination costs are high, this does not encourage travelers to fly there. The cost factor also prevents new airlines from connecting Nepal and discourages existing airlines from adding flights.

Why is Nepal expensive?

It all starts with aviation fuel. Last August, the price of aviation fuel sold to international airlines was $770 per kilolitre. And in the past eight months, the price has more than doubled to $1,545 per kilolitre. Aviation fuel prices in Kolkata and New Delhi, India are $1,197 per kiloliter and $1,157 per kiloliter respectively.

Fuel prices have reached record highs globally; and as a result, all counties increased rates. But in Nepal, fuel prices are extraordinarily high because the Nepal Oil Corporation has a cross-subsidy policy. This means making the airlines pay dearly and compensating for the losses of other petroleum products. Nepal Oil Corporation makes a profit of 64.69 rupees per liter on the sale of aviation fuel.

If you consider the profit from aviation fuel, it is very minimal. But it kills the airlines. This prevents new airlines from entering and prevents existing airlines from adding flights. All because of fuel prices. This is not a good marketing policy. There is a geographical difficulty in flying in Nepal, and the exorbitant price of fuel which is passed on to travelers makes the destination expensive.

How should Nepal promote its new airports?

Flying into a new airport is always a risky business due to the cost factor and the traffic which is normally not rated. First of all, the high prices must be taken into account, starting with the price of fuel which is unacceptably high at Kathmandu airport, and the same rate will be applied in the new airports. Second, if there is a monopoly on ground handling services, it will not improve services. There should be competition in prices as well as in services.

I would suggest that the government launch incentive programs for airlines to connect to the new airport. Doing this will reduce the risk factor. There are many options such as total waiver of landing and parking fees for a certain period and discount for early payment. So it is something to consider to make operations more feasible for airlines, as it is not easy to start a new destination.

Clearly, airlines see a new airport as a risk. Turkish Airlines plans to connect Gautam Buddha International Airport, but we need to check all security procedures and do a feasibility study to determine if it is commercially feasible to start flights. Our team in Turkey will assess all situations before making the decision to fly to the new airport. And the tourism industry in Nepal must work together to make it more than a labor movement airport. How we can attract more tourists should be the main focus of the new airport.

How did Turkey market its new airport?

Turkey opened a new $11.7 billion airport outside Istanbul in October 2018. It is managed by Istanbul’s major Havalimani İşletmesi A.Ş Airport. (IGA), a private company. The management will provide services for a certain period of time and according to the agreement, it guarantees the annual number of passengers. They built the airport. The IGA itself has a marketing team to encourage more airlines to fly there. The marketing team travels to different countries, meets with the CEO and management of the airline and tells them what kind of privilege they get by flying to Istanbul.

Has the Nepalese government consulted with international airlines regarding connectivity and marketing?

It’s happening these days. The new airport should start with airlines here and then it can go to potential airlines that can come here. The government should promote the new airport and tell travelers and airlines about Lumbini, the birthplace of Buddha. Marketing is important. Lumbini has a good fusion of culture and religion where Hindus, Buddhists and Muslims all live together in peace. As the new airport is close to the border with India, Nepal should think about promoting cargo facilities.

What should Nepal do to attract 3 million tourists?

Nepal can accommodate at least 5 million tourists a year. He has that potential. But the bottom line is that the country needs to improve its tax strategy to encourage more airlines. Basic infrastructure like airports, roads and hotels are already there. The private sector has invested heavily. But from the government side, there must be a proper policy to attract the number of visitors. I have already said that taxation is high in Nepal. We cannot be a tourist destination if we sell the product at the highest price, including fuel, which is one of the most expensive in the world. Turkey has also faced the same situation that Nepal is currently experiencing. But when the number of tourists coming to Turkey started to decrease, the country started offering incentives to airlines by offering $30-40 per tourist which encouraged them to bring more tourists. The program has been successful although it was launched for a temporary period.

What would you suggest in Nepal?

Visa fee waiver for tourists is not a problem. $30 isn’t a lot of money. But online visa services can be better. There are very good improvements in airports these days as there are barcodes where you can just scan and pay. Online payment options at airports can be simplified. Bringing one more airline with one more flight will increase the number of passengers. They will find passengers from here. If airlines are encouraged, they will also do marketing for their destination country.

Why don’t European and American airlines fly to Nepal?

Certainly, it is the cost factor. When flights come from distant destinations, they have to refuel and the prices in Nepal are already high. Even Nepal Airlines fills the fuel tanks of its planes in other countries due to the high cost of fuel in Nepal. For flights coming from long distances, they have no alternative. Likewise, there are problems with the European Commission’s air safety list. As mentioned, the operator and the regulator must be separated and they cannot exercise their functions from the same office. If these two functions are combined, there is a conflict of interest in decision-making. Geographically, Nepal is not an easy destination; but with Gautam Buddha International Airport coming into service soon, it may have better payload options that could attract flights from European countries. But Nepal should first ensure that its regulator and service provider do their job independently and separately.

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