NAC Profit In Making

Following criticism from for its high expenditure and unmanageable state, NAC proposes a strategy to recover the cost and increase saving

Nov. 14, 2019, 12:51 p.m. Published in Magazine Issue: VOL. 13 No. 07 ,Nov.08 –28 , 2019(Kartik.22, 2076) Online Register Number: DOI 584/074-75 Publisher: Keshab Prasad Poudel

With ever growing expenditure and unmanageable financial state, Nepal Airlines Corporation (NAC) is in a very dire state. At a time when there have been growing concerns over NAC's performance, Executive Chairman of NAC Madan Kharel has announced a new strategy to streamline its financial expenditure.

"We have already identified the sectors to cut the expenditure and make big progress to bring the financial expenditure right on the track," said Executive Chairman Madan Kharel, addressing a press meet at NAC.

He said that NAC has already implemented the financial mitigation strategy to reduce the cost of fuel, high expenditure of the flights, Hotel Management, Engineering and Corporate Security Department.

NEA has targeted to save Rs.1 billion in the current expenditure in fuel storage and its unnecessary use. Similarly, NAC also proposes to save Rs.20 million from flight operation, 20 million from hotels spending for crews, 110 million in Engineering and 5.6 million in corporate security.

Soon after Yogesh Bhattarai has been appointed the minister of Culture, Tourism and Civil Aviation, he gave several directions to NAC management to improve national flag carrier's financial and other performance.

When Bhattarai took the charge of Ministry, NAC was in a state of virtual collapse with deteriorating financial situation. Young and energetic minister Bhattarai set up a high level committee seeking a report on how to improve the state of NAC.

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For the last six months, the situation has changed much. Although NAC is yet to pay any consignment to lender for the last two quarters, it is able to save some amount of money to avoid bankruptcy.

Under the guidance of Minister Bhattarai, NAC management announced the new strategy to raise its annual income and reduce the additional burden and increase the profit margin.

According to Kharel, NAC's annual income of the ongoing fiscal year will be Rs.17.25 billion. Last fiscal year, NAC generated Rs.15.14 billion.

Executive Chairman Kharel said that NAC will generate Rs.12.75 billion from International flights. Similarly, it has proposed to make 320.48 million from domestic sector and 4.16 billion from ground handling.

During the press conference executive chairman Kharel also announced plans to expand operations in different parts of the world. Kharel said that NAC will fly to Tokyo by March 2020. He also complained that flight to China has delayed in absence of visit by audit team from China.

He also informed that NAC is planning to start fight to Beijing, Sanghai, Riyadh, Dhaka, Hanoi, Cambodia and Sri Lanka. Along with this executive chairman also said that NAC has already introduced Mobile Apps for ticket booking and tools to inform passengers about flight activities through SMS.

Similarly, he also said that NAC has also been evaluating its assets and liability. With an aim to operate all the aircraft, NAC has already rescheduled its operation plan.

Currently out of 4 Y12 Chinese aircraft, only one is in operation and NAC is working to use another one immediately. Out of two AMA-60, only one is in operation.

Out of 3 twin otters, two are in operation. According to Kharel, NAC's wide body planes are currently flying 13 hours a day and narrow body ones are flying 12 hours and day. The occupancy rate of NAC is 76.6 percent.

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