A new joint venture between Air Arabia and Nepal's Yeti Airlines aims to capitalise on the decline of Nepal Airlines
Low-cost airline operations have made their way to Nepal, where the market is set for major change following the launch of a new carrier part-owned by Sharjah-based Air Arabia.
Nepal's air transport market was opened up to new competition in the early 1990s and dozens of new airlines launched to compete with state-owned Royal Nepal Airlines. But most of those that remain only operate small turboprop aircraft on domestic routes as well as on tourist flights.
Royal Nepal was last year re-named Nepal Airlines but it remains a troubled operation with frequent flight cancellations and complaints of poor service. That has left an opportunity for new carriers to enter the market, starting with flyyeti.com as the country's first low-cost operator.
Flyyeti.com is a joint venture between Nepalese domestic carrier Yeti Airlines and Air Arabia. It launched at the end of January with an inaugural flight between its Kathmandu base and Sharjah. Abu Dhabi and Kuala Lumpur have since been added to the network and this will be followed soon by others such as Bangkok, Delhi, Doha and Hong Kong, according to Yeti general manager Vijay Shrestha.
He says the new airline has started with a wet-leased Boeing 737-800 but it will later be adding Airbus A320s from Air Arabia. Shrestha says it will only operate international services and has its own management team, headed by Air Arabia's director of strategy and planning, Donald Hubbard, as chief operating officer. Yeti, which launched services in 1998, will continue to focus on the domestic market with 19- and 30-seat turboprops.
Air Arabia has been looking to establish new bases and is a major shareholder in flyyeti.com, although it has not revealed the exact ownership structure. Air Arabia's chairman, Sheikh Abdullah Bin Mohammad Al Thani, says: "As we set our sights on global expansion, we remain focused on youthful, fast-growing markets where the opportunities for growth are greatest. Nepal, with a population of 29 million and a median age of just 20, is clearly among them."
Air Arabia chief executive Adel Ali adds: "This newest hub will give air travellers who use Air Arabia access to new destinations in India and wider South Asia, as well as the Far East and Central Asia."
Demand for travel to Nepal has been increasing significantly over the past 18 months as political stability has returned. Several foreign carriers recently reinstated services to Kathmandu, including Dragonair and SilkAir.
Nepal Airlines remains in disarray, however. Late last year it suspended all international flights for around a fortnight due to repairs that were needed to its two 757s, which are the only aircraft it has for international flights. The country's other international carrier, Cosmic Air, also has had problems and was grounded for several months in 2006 and 2007. Their persistent troubles have until now given foreign carriers the opportunity to carry much of the international traffic to and from the country (see chart). With flyyeti.com set for expansion, that may soon change.
Source: Airline Business
