Domestic air fares set to drop

- Post Report, Kathmandu

Jul 4, 2017-

Travelling by air is likely to become little cheaper. Following up on a drop in the jet fuel price in international markets, domestic airlines are set to reduce the fuel surcharge. The new airfares will come into effect on Wednesday.

A committee formed under the Civil Aviation Authority of Nepal (Caan) to review the fuel surcharge said the prices of domestic airfares could drop between Rs90 and Rs300 depending on the distance. “It could not be implemented on Monday due to some technical problems on the automatic formula set up to determine the reduced fuel surcharge,” said Subhash Jha, deputy at the Air Transport Division of Caan. “The issue would be sorted out on Tuesday.”

On Sunday, the Nepal Oil Corporation had reduced the price of aviation fuel sold to domestic airlines by Rs4 per litre to Rs82 per litre. 

This is the first time this year that airlines have cut the fuel surcharge. Airlines are required to revise fuel surcharge when prices increase or drop by Rs4 per litre under the formula set by Caan. 

“Lower fuel surcharge will provide some relief to travellers,” said Jha. Airlines currently have over 90 percent occupancy rate due to poor road conditions, particularly the Mugling-Narayangadh highway section. 

Nepalis have once again started resorting to air transport service to travel inside the country. After witnessing a constant fall in passenger numbers in the last four years, the domestic aviation sector rebounded strongly in 2016, recording an all-time high air traveller movement.

According to statistics of the Tribhuvan International Airport (TIA), Nepal’s domestic air passenger movement jumped 28.85 percent to 1.75 million, as travellers chose to fly rather than drive over ‘bone-jarring’ national highways. Domestic carriers received 393,548 more flyers last year.  The figure includes 27,893 passengers flown by nine domestic helicopter companies. The passenger movement was 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 it to the air. At that time, rise in NGO/INGO staff movement during the peace process and a real estate boom also helped airlines to do a brisk business. Airlines saw a heady growth of 13 percent in passenger movement in 2008. The growth rate jumped to 33 percent in 2009, as fares were cut amid stiff competition. Although passenger movement increased 12.83 percent in 2010, the growth rate started dropping in 2011 and recorded negative growth from 2012 to 2015.

This trend reversed in 2016. Nepali skies saw 73,876 flights during that year, up 12.16 percent than in 2015.

Published: 04-07-2017 08:02

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