Domestic airfares likely to go up 19-39 percent

Domestic airfares are likely to go up with the Civil Aviation Authority of Nepal (Caan) recommending a 19-39 percent hike in ticket prices depending on travel distance. Caan’s airfare revision committee has proposed jacking up ticket prices by 39 percent for short routes and by as much as 19 percent for trunk routes. It has proposed a flat 33 percent increase for the remote sector. The last time domestic airfares were revi- ewed was in February 2011. If the new tariff is implemented, the price of a ticket on the Kathmandu-Dhangadhi flight, the longest domestic route, will go up by at least Rs1,200. The present one-way airfare is Rs6,570 plus a fuel surcharge of Rs4,220. A ticket on the shortest flight, Kathmandu-Simara, will go up by at least Rs500. Currently, a one-way ticket costs Rs1,340 and there is a Rs1,225 fuel surcharge. The new rates are subject to approval by the Ministry of Tourism and Civil Aviation. Caan’s board has okayed the revised fare structure and sent it to the ministry for its endorsement. A committee led by Joint Secretary Suresh Acharya will review the proposed airfares before approving them, according to Caan officials. The ministry had assigned Caan to study the technical aspects of the proposed fare hike three months ago as per a request made by the Airlines Operators Association of Nepal (AOAN) and the provision requiring airfares to be reviewed every two years. Subsequently, a seven-member committee chaired by Caan Deputy Director General Rajan Pokhrel was formed. According to Pokhrel, Caan has proposed the increases taking into account inflation, stronger US dollar, salary and allowances, training and other components in the last six years. Caan officials said that airfares would have to be increased twofold based on inflation. But the committee was able to propose a smaller hike by disregarding a number of components like aircraft lease cost, insurance and maintenance. “The review has been made based on the operating cost of Jetstream and ATR aircraft,” said Pokhrel. The fuel surcharge was not included in the airfare review. The government allows carriers to increase the surcharge only if the price of aviation fuel increases by at least Rs4 per litre. Pokhrel said that the committee had also proposed a mandatory provision requiring domestic airlines to conduct 30 percent of their flights on the remote sector. Airlines said they were optimistic that the government would implement the new airfares by mid-July. Nepal’s domestic air passenger movement shrank for four straight years, dropping 5.96 percent in 2015, as a series of disasters struck the country denting travel demand. According to the data of Tribhuvan International Airport (TIA), domestic carriers received 86,510 less flyers last year. These airlines carried 1.36 million passengers in 2015 against 1.45 million the year before. The figure includes the 72,394 passengers flown by seven domestic helicopter and single-engine companies. Passenger movement has been 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 to the year, increased NGO/INGO staff movement after the peace process and a real estate boom. Airlines saw a heady growth of 13 percent in 2008 which jumped to 33 percent in 2009 as they cut fares amid stiff competition. Although passenger movement increased 12.83 percent in 2010, the growth rate started dropping in 2011 and has shown a negative growth since 2012. Source: ekantipur