'There should be incentive schemes for airlines to connect the new airport'Abdullah Tuncer Kececi, general manager of Turkish Airlines in Kathmandu, on Nepal’s tourism and the aviation industry, and its future.
Abdullah Tuncer Kececi is 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 in Bhairahawa to its network. Turkish Airlines also plans to increase its flight frequency to Kathmandu from October as Nepal’s tourism industry revives. Sangam Prasain of the Post spoke to Kececi about his perspectives on Nepal’s tourism and the aviation industry, 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 which is going to peak a bit quicker because most of the tourism activities in Nepal are nature and cultural based. Travellers are willing to visit areas like Lumbini, Kathmandu and Everest which have mixed experiences of culture and nature. Nepal is indeed a most preferable destination because, for travellers, safe and comfortable matters. 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 around the world has changed a bit. There is no advance booking like there used to be in past years. After the pandemic, people have started to travel without bookings, and that’s a good sign for a country like Nepal.
Will the tourism industry be back to normal by this autumn?
I think October will be a good time. Based on the current development and situation, we have assessed that after six months, Nepal’s tourism will be back to normal. From our side, we are concentrating more on bringing tourists, especially from markets like the United States, Europe and Canada.
If we look at past trends, normally, tour operators plan the tours and travels in advance. In some cases, high-end tourists used to make plans to visit a certain country two years in advance, and tour operators used to make plans accordingly. For instance, to visit in October this year, as per the earlier plan or before Covid, booking used to be made a year earlier. But tour operators cannot do this now. People travel when they like. This is a new global trend, and this will benefit countries like Nepal which has opened up for all and lifted all restrictions.
Six months is ideally the time to make a decision for travellers now, though it is considered a quick plan. So, if everything goes as planned, October will be a really good season for Nepal based on the inquiries and bookings that we have been receiving. Our October flights are already 80 percent sold out.
In the past, there were concerns about Nepal lacking infrastructure. Now two new international airports will be operating by this year, and hosts of luxury hotels are being constructed. What should Nepal do to bring more tourists?
Infrastructure is important. Having a new airport is a plus point. Pokhara international airport is not for wide body planes, but Gautam Buddha International Airport is going to change the game a little bit. Nepal needs to start working properly and it also needs to start adding pilgrimage packages in the tourist itinerary. We should make sure that the new airport is not only for labour movement from Nepal. Its objective is to bring tourists and create an economic opportunity in the region. The government should ask the private sector to introduce travel packages starting from Lumbini too.
First of all, 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 some concerns flying into Nepal. Due to the high cost of aviation, Nepal has become one of the expensive destinations. If the destination costs are high, it does not encourage travellers to fly there. The cost factor also prevents new airlines from connecting Nepal, and discourages the existing ones from adding flights.
Why is Nepal costly?
It all starts from aviation fuel. Last August, the price of aviation fuel sold to international airlines was $770 per kilolitre. And in the last eight months, the price has more than doubled to $1,545 per kilolitre. The prices of aviation fuel in Kolkata and New Delhi, India are $1,197 per kilolitre and $1,157 per kilolitre, respectively.
Fuel prices have jumped to record highs globally; and accordingly, all counties have raised the rates. But in Nepal, fuel prices are extraordinarily high because the Nepal Oil Corporation has a cross-subsidy policy. That means charging airlines high and offsetting the losses in other petroleum products. Nepal Oil Corporation is making a profit of Rs64.69 per litre from the sale of aviation fuel.
If the profit earned from aviation fuel is considered, it is very nominal. But it is killing the airlines. It is preventing new airlines from coming, and hampering the existing ones from adding flights. This is all because of fuel prices. That’s not a good marketing policy. There is a geographical difficulty in flying into Nepal, and the outrageous fuel price that is passed on to travellers makes the destination expensive.
How should Nepal promote its new airports?
Flying into a new airport is always a risky business because of the cost factor and the traffic which is normally not evaluated. First of all, the high prices need to be considered, starting from the fuel price which is unacceptably high at Kathmandu airport, and the same rate is going to be applied at the new airports. Secondly, if there is a monopoly in ground handling services, it will not enhance services. There should be competition in prices as well as services.
I would suggest that the government launch some incentive schemes for airlines to connect the new airport. By doing this, it will reduce the risk factor. There are many options like full waiver of landing and parking fees for a certain period, and early payment discount. So, this is something to be considered to make operations more feasible for airlines because it’s not easy to start a new destination.
Definitely, airlines consider a new airport a risk. Turkish Airlines plans to connect Gautam Buddha International Airport, but we need to check all the safety procedures, and do a feasibility study to determine whether it is commercially feasible to begin flights. Our team in Turkey will assess all the situations before making a decision to fly to the new airport. And the tourism industry in Nepal has to work together to make it more than a labour movement airport. How we can bring more tourists should be the main aim 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 Grand Airport Havalimani İşletmesi A.Ş. (IGA), a private company. The management will provide services for a certain period of time, and as per the agreement, they guarantee annual passenger numbers. They built the airport. The IGA itself has a marketing team to encourage more airlines to fly there. The marketing team goes to various countries, meets the airline's CEO and management, and tells them what kind of privilege they get when flying to Istanbul.
Has the Nepal government consulted with international airlines about connectivity and marketing?
It is happening these days. The new airport should start with the airlines here, and then it can go to the potential airlines which can come here. The government should promote the new airport and tell travellers 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. Since 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 host at least 5 million tourists annually. It has that potential. But the basic thing is that the country needs to enhance its taxation strategy to encourage more airlines. Basic infrastructure like airports, roads and hotels are already here. The private sector has invested heavily. But from the government's side, there needs to be a proper policy to attract visitor numbers. I already said that the 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 costliest in the world. Turkey too had faced the same situation which Nepal is doing currently. But when the number of tourists coming to Turkey started to decrease, the country started giving incentives to airlines by providing $30-40 per tourist, which encouraged them to bring more tourists. The scheme was successful though it was launched for a temporary period.
What would you suggest to Nepal?
Waiving visa fees for tourists is not an issue. $30 is not a lot of money. But online visa facilities can be better. There is really good improvement at airports these days as there are bar codes where one can just scan and pay. The online payment options at airports can be made easier. 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 as well.
Why are airlines from Europe and the US not connecting Nepal?
Definitely, it’s the cost factor. When flights come from faraway destinations, they have to fill their fuel tanks, and prices in Nepal are already high. Even Nepal Airlines is filling the fuel tanks of its aircraft in other countries due to the high cost of fuel in Nepal. For flights coming from long distances, they don’t have alternatives. Similarly, there are issues regarding the air safety list of the European Commission. As has been said, the operator and regulator need to be separated, and they cannot perform their duties from the same office. If these two functions are together, there is conflict of interest in making decisions. Geographically, Nepal is not an easy destination; but with Gautam Buddha International Airport coming into operation soon, it may have better payload options that could attract flights from European countries. But Nepal should first ensure that it has its regulator and service provider doing their jobs independently and separately.