Nepal’s private airlines are bearing the brunt of higher fuel prices, hefty insurance premiums and fluctuation in passengers’ flow, according to regulator Civil Aviation Authority of Nepal (CAAN). Domestic airlines suffered a huge loss of Rs 172.8 million during the last fiscal year, says CAAN. Among the nine fixed-wing airlines, four enjoyed a net profit of Rs 162 million while the rest suffered a net loss of Rs 108.8 million in the last fiscal year.

The net profit of the six helicopter companies in the country stood at Rs 30.2 million in 2011-12, up from Rs 27.6 million in the previous fiscal year. Airlines operating on remote sectors are incurring losses while only a few that are flying trunk routes are earning profits, said CAAN, adding that an increase in insurance premium had also become a big headache for airlines. Around Rs 1 billion goes out of the country as insurance premium, according to the authority.

Nepal saw a significant growth in air transport after the aviation policy was liberalized in 1992. Aircraft movement jumped four-fold from 24,600 in 1992 to 95,000 in 2012.
There are 55 fixed-wing aircraft and 26 helicopters in Nepal at present. Air traveller movement reached 1.03 million in 2008, 1.37 million in 2009 and 1.55 million in 2010. However, the growth rate slipped 2 percent to 1.58 million in 2011. In 2012, passenger movement fell 0.55 percent to 1.575 million, according to CAAN.