KATHMANDU, July 21: With the increase in international air passenger traffic, the business of airline companies operating in Nepal recorded an all time high growth last year with the total business volume touching Rs 12 billion, a 20 percent rise.
According to Board of Airlines Representative in Nepal (BARN), the average revenue of 27 different airlines operating in Nepal was around Rs 1 billion in a month.
“The amount represents only the revenue collected from their operations in Nepal, therefore, the total revenue could be much higher than this,” President of BARN Madan Kharel said.
The statistics of Civil Aviation Authority Nepal (CAAN) shows that there has been a growth of more than 15 percent in 2011 compared to a year ago.
An official at BARN said, during the peak tourist season of the last fiscal the monthly average crossed well above Rs 1 billion, with average monthly revenue at Rs 900 million.
At present, the only international airport of the country is operating more than 60 international flights daily.
“The increase in tourist arrivals has been well reflected in the revenues of airline companies, making Nepal one of the emerging markets for international airlines,” added he.
Meanwhile, despite the soaring income of other international airlines, the income of national flag carrier has shrunk to an all time low. The contribution of NAC in bringing tourist in NTY 2011was less than 4 percent, a significant drop from 28 percent a decade ago when it was operating flights to European destinations.
The financial statement of Nepal Airlines Corporation shows that the monthly earning was limited to Rs 13.5 million in fiscal year 2010/11. NAC is earning around Rs 1.50 billion annually through ground handling service.
Int´l Airlines propose to increase Bill Settlement frequency
Airlines operating in Nepal have proposed to increase Billing and Settlement Plan (BSP) to a week from existing 15 days, a press statement of International Air Transport Association (IATA) said. The BSP is a settlement system designed to facilitate and simply the selling, reporting and remitting procedures of IATA Accredited Passenger Sales Agents.
“Consultation with travel agents on the proposed changes is currently being conducted and the proposal will be submitted to the Passenger Agency Conference (Pancof) for approval,” the statement said.
According to IATA, the proposed implementation date for weekly settlement is June 1, 2013. The increasing BSP remittance frequency will reduce the credit exposure of airlines and improve cash flow. The statement further added that it will also benefit agents as it will reduce their operation costs.
Moving to weekly settlement will reduce the amount of financial guarantee of agents to be provided to IATA, according to the statement.