Nepalmountainnews Report | 2 Jul 2008
Tourism entrepreneurs are worried to the suspension of flights of FlyYeti.com, a budget carrier, as the interruption might have negative impact on the tourism industry that has just started picking up.
In its unilateral decision, Air Arabia team of management has called to scrap all of its Nepal flights from July 16 citing high aviation turbine fuel (ATF) price.
Yeti Airlines, Nepal's leading domestic carrier and Air Arabia, the first and the largest Low Cost Carrier (LCC) in the Middle East and North Africa, had entered into a joint venture (JV) to start a new budget airline, under the brand name flyyeti.com, only last year.
"Nepal has possibly highest ATF price in the world. The JV airline pays $1.5 per litre of ATF in Nepal whereas on all routes that it operates the price is somewhere around $0.90," said Ang Tshiring Sherpa, chairman, Yeti Airlines International Pvt Ltd in the press release issued here Tuesday.
"We pay about 67 per cent more for ATF in Nepal than elsewhere. With the rising price, operating flights was becoming economically challenging. The 10 per cent lease tax levied by the government on all leased aircrafts is an additionally large burden to bear," the press note stated.
Though, Nepal Oil Corporation (NOC) had a good profit margin in sales of the aviation fuel, it increased the price of ATF. Immediately, Airline operators have asked the government to roll back the decision of hiking ATF prices. Airlines Operators Association of Nepal (AOAN) has also strongly condemned NOC's move to hike ATF prices. However, NOC didnot roll back the price.
It had hiked the ATF prices by Rs 10 per litre or 12.5 per cent for domestic use and $230 per 1000 litre or 21 per cent for international operations.
Yeti Airlines International Pvt Ltd, under the brand name flyyeti.com had commenced its international flight from Kathmandu on January 22.
Nepali aviation laws are inflexible and should be modified to become more industry friendly, say the entrepreneurs. "If the government wants to see local airlines to grow in the international service, it should encourage them through flexible rules and tax exemptions."
Nepal had the all time record tourist arrivals last year and there are 19 foreign airlines operating air services to/from Nepal.
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