Domestic airlines see record flyers in 2016

March 27, 2017

The Kathmandu Post, Sangam Prasain, March 25 2017

Nepalis have once again started resorting to air transport service to travel inside the country. After witnessing a constant fall in passenger numbers in the last four years, the domestic aviation sector rebounded strongly in 2016, recording an all-time high air traveller movement.

According to statistics of the Tribhuvan International Airport (TIA), Nepal’s domestic air passenger movement jumped 28.85 percent to 1.75 million, as travellers chose to fly rather than drive over bone-jarring national highways.

Domestic carriers received 393,548 more flyers last year.  The figure includes 27,893 passengers flown by nine domestic helicopter companies.“More Nepalis are taking to the skies due to poor road conditions,” said Ghanshyam Acharya, spokesperson of the Airlines Operators Association of Nepal. 

Besides, Nepali airlines are adopting “yield management” strategy, particularly in the trunk route sector to attract more flyers, he said. The yield management is the process of frequently adjusting the airfare in response to market demand. For example, airline companies these days offer an array of discount fare buckets, and based on the number of vacant seats, airline companies reduce airfares to increase the number of passengers.

“The efficient yield management has helped airlines to get 90 percent occupancy,” said Acharya. Apart from poor road conditions and airfare management, rise in domestic as well as foreign tourist movement has aided domestic carriers, he added. 

2017 is expected to be another boom year for domestic aviation, as Nepali skies will see addition of more than a dozen new planes despite infrastructure hurdles.

Passenger movement was on a constant decline since 2012 marking a departure from the robust growth rates seen since 2008 when airlines were flying high due to competitive airfares, constant protests and road blockades, forcing travellers to take it to the air. At that time, rise in NGO/INGO staff movement during the peace process and a real estate boom also helped airlines to do a brisk business.

Airlines saw a heady growth of 13 percent in passenger movement in 2008. The growth rate jumped to 33 percent in 2009, as fares were cut amid stiff competition. Although passenger movement increased 12.83 percent in 2010, the growth rate started dropping in 2011 and recorded negative growth from 2012 to 2015.

This trend reversed in 2016. Nepali skies saw 73,876 flights during that year, up 12.16 percent than in 2015.

According to TIA statistics, Nepali skies saw an average of 200 domestic flight movements per day in 2016, with Buddha Air leading the pack. The airline company, established in 1997, achieved a milestone of flying over a million travellers last year, booking a year-on-year growth of 37.63 percent.

Buddha flew a historic 1.01 million passengers in 2016—the highest number so far by an individual airline in Nepal’s aviation industry. 

The carrier, which commands a 58 percent passenger market share, last month added ATR 72, expanding its fleet size to nine. Buddha’s rival, Yeti Airlines saw its passenger number grow by 22.83 percent to 408,693 in 2016.

Yeti’s subsidiary Tara Air, which only operates on remote sectors, observed the strongest passenger growth of 45.62 percent. It flew 70,583 passengers last year.

Saurya Airlines, which started operations in November 2014, carried 90,205 passengers, up 3.76 percent.

Likewise, Simrik Airlines saw its passenger number increase by 5.97 percent to 48,887. Nepal Airlines and Sita Air also saw passenger growth during the review period, with Nepal Airlines flying 48,120 passengers, up 13.13 percent, and Sita Air ferrying 19,328 passengers, up 64.35 percent. Goma Air, that started its operation with LET 410 aircraft in October 2014, carried 32,416 passengers, up 4.47 percent.