Buddha Air, which recently completed 15 years of successful operation, is one of Nepal´s leading airlines. It operates scheduled flights to 12 domestic destinations and Lucknow, India with a fleet of nine aircraft and employs around 700 people. As the airline entered 16th year of operation, Susheel Bhattarai of Republica caught up with Birendra Bahadur Basnet, managing director of the airline, to talk about Buddha´s journey, present challenges of Nepal´s aviation industry and the airline´s future plans. Excerpts:
How do you evaluate the journey of 15 years?
This one and half decades were really challenging. We faced several ups and downs during the period. Today we have become the leading airline of Nepal and succeeded in setting a milestone in the aviation industry of the world. When we started, there were many people who felt operating an airline was not a wise decision. Today, we have proved them wrong.
What do you credit your success to?
All the credit goes to our efficient team of 700 staff members and their hard work. I do not like to take any credit for the success. We strictly abide by the government´s rules and regulations. We contribute around Rs 250-Rs350 million in taxes to the national coffer every year. As a leading airline in the country, we make sure that our staff members are properly taken care of. We are increasing salary of our staff by a minimum of 20 percent. We raised salary by 40 percent in 2010 and 30 percent in 2011. We have a team of dedicated staff members; this is our biggest strength.
What do you think is the scenario of aviation safety in Nepal?
We have seen just one crash, which happened last year, in our 15-year history. Both the pilots who lost their lives in the crash had 6000-7000 hours of flight experience. The investigation report blamed human error behind the crash. In average, we are spending Rs 2 million for training of each pilot. We are working hard to make sure all our pilots follow the due procedures. More than 50 percent of our 60 pilots are captains.
After the crash, we have added 11 pilots and spent hundreds of millions of rupees for air safety. The construction of hangar at Tribhuvan International Airport is also a part of our commitment to ensure aviation safety.
How has been the return of your investment?
We have invested whatever we have earned so far to expand our fleet. Buddha Air still has Rs3 billion to pay to its creditors. We will clear the loan as soon as possible. At present, we are operating three 72-seater ATR-72s, three 47-seater ATR-42s and three 19-seater Beechcraft 1900 D aircraft. The average occupancy rate of our aircraft hovers over 90 percent and we sell more than 50 percent of our seats on promotional fares, which makes our airfare cheaper. We serve 900,000 passengers last year. The number will reach one million this year.
Do you have any plan to diversify your business in the near future?
To invest, say Rs 100 million or Rs 1 billion, on new ventures is not a big deal for us. But, we do not have immediate plans to invest in other sectors as that might risk the business of Buddha Air. It will also not be in the favor of our staff members.
What are your expansion plans?
We are working on a business plan to procure Viking Twin Otter aircraft to expand our network to rural areas. We are hopeful that it will be materialized in 3-4 years. Rather than expansion, it will be diversification of our market.
We have bitter experiences of operating flights on international destinations. We faced loss of Rs 50 million while operating flights to Lucknow. The Varanasi sector is yet to yield satisfactory results. The other option is to enter into Gulf countries. But it will be difficult for us to compete with Gulf-based airlines having huge capital.
I think tourists flow to the country must reach 2.5 to 3 million a year to make our international operation sustainable. We have started preliminary study to operate flights on middle-haul destinations. But it will take some time.
What is your biggest challenge at the moment?
At present, we are on the peak of success. It will be a big challenge for us to continue to stay on the top. It will take at least some years to be established in the market and we are quite optimistic about achieving it