Parliamentary committee directs ministry to cancel Air Arabia deal

The International Relations and Human Rights Committee has instructed the Ministry of Tourism and Civil Aviation (MoTCA) not to allow Air Arabia operate flight on Kathmandu-Kuala Lumpur route saying that the decision will not only bleed the national flag carrier white, it is also against the Act.

"The decision is illegal as the ministry did not seek the permission from Nepal Airlines Corporation (NAC) in accordance with the NAC Act-2019," said C P Gajurel, a UCPN-Maoists lawmaker.

According to the Act, the ministry has to seek prior approval from the NAC to allow another airliner to fly on any route NAC is flying. "The ministry only sought permission for Memorndum of Understanding (MoU) not for the flight," he added.

"The ministry could allow Air Arabia to fly on any other routes except the Kathmandu-Kuala Lumpur route that is the only profitable route among the international routes of the national flag carrier," he suggested.

"The NAC flies six days a week on the Kathmandu-Kuala Lumpur route carrying 1,140 passengers due to increased migration of Nepali workers to Malaysia, that is the biggest destination for Nepali blue-coller job seekers," said K B Limbu, General Manager of NAC that has opposed the ministry decision to award its profitable route to a foreign airline.

"The government has permitted Air Arbia to operate six flights a week on Kathmandu-Kuala Lumpur route under the revised Air Service Agreement (ASA) between the UAE and Nepal in 2007, offering the airline fifth freedom rights that allows an airline to carry passenger from one's own country to a second country and from that country to a third country," said Sarat Singh Bhandari, Minister for MoTCA, defending the ministry's decision.

The United Arab Emirates-based low-cost carrier is scheduled to start flights on the route from December 16.

"We can earn Rs 125.25 million annually directly from this decision," the minister said, adding that there are more indirect incomes like ground handling charges and royalty among others.

"NAC has not been able to cater to the increased passenger flow and was fast loosing business to other airlines," he said, adding that one of the NAC aircraft is grounded due to technical glitch and there are only three flights of NAC on the route, currently.

The ailing NAC has been planning to add two new wide-body aircraft on international routes. Currently, NAC is flying a Boeing B-757 and a Boeing 757-200 aircraft -- Karnali and Gandaki -- each with 190-seat capacity on international routes. The then Royal Nepal Airlines Corporation (RNAC) -- and present NAC -- had taken two Boeing 757s -- Karnali on lease in 1987 and Gandaki in 1988.

Currently, 27 international airlines fly to Kathmandu and Nepal has ASAs with 35 countries.