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Nepal Airlines Corporation – a Brief History

CHAPTER 1 INTRODUCTION A BRIEF HISTORY OF AVIATION IN NEPAL The development of aviation in Nepal can be traced back to the mid 1940’s, when a lone pilot who spluttered over the mountains, dipped into Kathmandu valley landing on a cow grazing field. That field, Gaucharan, is now the site of Nepal’s only international airport. In April of ’49, a single engine (seated) vintage Bonanza aircraft of Indian Ambassador Mr. Sarjeet Singh Mahatahia landed at Gaucharan and thus heralded the beginning of aviation in Nepal. Himalayan aviation Douglas DC-3(VT-DCE) Dakota aircraft started three flights a week scheduled flights between Patna and Kathmandu.

Another Dakota VT-CBC brought in king Tribhuvan from Patna on the 18th of February, 1951, to announce the drawn of democracy in Nepal. The Government of India donated this aircraft to Nepal. Later, Indian National Airlines started flights between Calcutta and Kathmandu. The advent of commercial aviation in Nepal was the outcome of democratic spirit if 1951 when a private airlines from India, Indian national Airways was allowed to link Kathmandu with Patna, three flight a week. Commercial Services to Pokhra, Bhairawa, Simara and Biratnagar from Kathmandu were launched with a Dakota DC-3.

After the nationalization of air services in India, eight domestic private carriers were merged to form Indian airlines. Encouraged by the domestic needs to accelerate the pace of development in this land locked and road less country, HMG nationalized the air transport system in Nepal to form Royal Nepal Airlines Corporation on 1 July 1958. The management of the airline was contracted out to managing agent Maharaja Kumar of Mayurbhanj who held 49% share in NAC and bought the first DC-3 9N-AAB from Indian Airlines Associates.

He is said to have collected some 75,000 IC from his uncle to start NAC in 1958. Capt. Jay Singh was the first pilot to fly the scheduled flight to Simara on 4th July 1958 Pokhara and Bhairawaha on the 5th and Biratnagar on the 6th. On 12th October 1959 the government6 took full control of the airlines and appointed an administrator. The airlines took up a route and fleet expansion program and managed domestic air transport services in a safe, efficient, well managed, economical and proper manner.

Beginning with one Dakota DC-3 aircraft operating to 4 domestic airports in 1985, the airlines has grown to have a modern fleet of Boeing 757s and STOL equipment servicing 38 domestic airports plus ten international destinations covering half the globe between Osaka in the east to London in the west. Airlines contributed significantly in developing the remote areas through STOL air services and national tourism industry through STOL air services and national tourism industry through jet services. NEPAL AIRLINES CORPORATION (NAC) INTRODUCTION

NAC previously known as Royal Nepal Corporation was established in July 1958 through the enactment of RNAC Act 2019 as joint venture with Indian Managing agent. Since its establishment it has been playing important role in the socio-economic and tourism development in the country through its extensive domestic and international air transport services. At present NAC operates 10 International destinations namely Bangalore, Delhi and Mumbai in India, Bangkok, Hong Kong, Shanghai, and Kuala Lumpur in South East/Far East and Dubai in Middle East.

Direct flight to and from Dubai were resumed from June 17, 2002 and flights to Singapore and Kuala Lumpur are recently operated from March, 31st 2003. In Domestic operations it connects more than 30 destinations inside Nepal. NAC has eight departments at corporate level to reinforce professionalism with necessary institutional support. Further for the purpose of assistance in proper and rational decision making, NAC has established an advisory cell to provide at the time of making major decisions, a standing committee and an internal audit mechanism under its chief executives.

To maintain and develop skillful manpower NAC provides different training programs regarding proficiency to the staffs, improving techniques and familiarizing one with the modern management methods to improve the productivity of the organization. Development In the last 40 years of scheduled airline operations, NAC has crossed six distinct phases of development and since 1995 the airline has suffered stagnation in route/fleet expansion, production development etc. each phase has witnessed increase in the airlines capacity production and route coverage to more than the previous phase.

Early phase (1958-59): NAC began internal services in July 1985 as a joint venture with an Indian Managing Agent. The emphasis then was on the commercialization of services to 4 domestic airports, namely Pokhara, Simara, Biratnagar and Bhairawa rather than on the expansion of fleet and route network which was the priority of government. Expansion phase (1960-65): The government took full control of the airlines on 12 October 1959, acquired two more DC-3 aircraft and route expansion program was initiated with services to Patna, Delhi and Calcutta in India and Janakpur, Rajbiraj and Gorkha inside Nepal in 1960.

Seven more DC-3 aircraft were acquired and the routes were further expanded from Bhadrapur to Dhangadi including Dang and Nepalgunj inside Nepal and Dhaka in the East Pakistan. By 1965, eight of the ten DC-3 were operating to 12 domestic and 4 international destinations, flying 7495 hours. So this period can also be called Dakota phase. Modernization Phase (1966-70): The next 5 years until 1970 was the modernization phase with a new Fokker Friendship F-27 aircraft joining the fleet on 24th January, 1966 and two new HS-748 Avros in January and March 1970.

Modernization of international services to Delhi, Calcutta and Dhaka with the new F-7 from 1966 and the beginning of mountain sightseeing flight from the 27th December 1967 significantly helped to boost tourism inflow into the country. Domestic services to Pokhara, Biratnagar, Bhairawa and Nepalgunj were also during this period (9N-AAQ in Nepalgunj, 9N-AAp in Batasedanda, 9M-AAI in June, AAM in Dec 1970) and a Fokker F27 crashed on the first day the first Avro arrived. MI-4 helicopters also started serving Jomsom, Tumlingtar and Jumla in 1968 at a subsidized rate.

Two new routes ( Surkhet and Megauli) were added during this period. Another significant development in this phase was the allocation of army occupied land near new road gate to NAC (accredited to Mr. Kedar Man Byathit, the then Ministry of Public Works & Transport) and the completion of the head quarter building in 1968. Jet and STOL age (1971-1978) : the airlines signed 3 years technical cooperation agreement with Air France and retained 5 experts from 13th July 1972 to achieve 3 specific purposes. 1.

To undertake immediate improvement in the technical, commercial and financial aspects of the operation. 2. To plan and implement a long range program for the improvement and expansion of NAC’s routes, services, operations and capital and equipment and 3. To provide training to NAC personnel. A fleet of DHC-6 Twin Otter and 4 Pilatus Porter PC-6 STOL aircraft were required for an extensive network of STOL services connecting 19 new airports in the mountainous regions of Nepal. The airlines embarked into jet age upon the arrival of a new Boeing 727/100 jet on 9 September 1972. he jet called Yeti, serviced Delhi and Calcutta from 15 September, Bangkok in Thailand from 1st October and Colombo, Srilanka from March 1977. Second B727 combo jet joined the fleet on 16 May 1978 and began the profitable British Gorkha charters to Hong Kong. Organisation Structure NAC has been managed by a board of directors appointed by His Majesty’s Government since 1958 ( Now been done by Nepal Government). A managing director appointed by NG acts as the chief executive officer under the guidance of the board of directors.

Board of directors formulates policies to achieve the set of goals and to comply with the guidelines outlined by the government. The composition of the board of directors includes Chaiman………………………………………………………………………………………………………. Economic Achievement For the astounding contribution to make Nepal as a center of destination for foreigners, the role of NAC is impeccable. NAC has stated marketing efforts, extending the airline’s support for international travel events, including PATA adventure and Eco-tourism conference. NAC offered round trip from Kathmandu to Delhi for Rs. 4,300 (Exclusive of Tax).

In response to this, other airlines like Cosmic, Indian Airlines, Jet Airlines and Shahara etc. also decreased their fare to attract huge customers. It was considered to be the most volatile price war in the airline business. However, Nepal’s national flag carrier the Nepal Airlines Corporation (NAC) has been contributing in economic development of the nation. On the other hand, it reaches to most inaccessible places although it hardly touches the break even. Around 1965 AD, there was a huge import of fuels and other cargo materials through NAC in the period of blockade .

As such it been trying to boost the national economy as well as social economic endeavor. NAC has been contributing significantly towards national development as well as economic development and advancement of country. NAC plays a vital role in the socio-economic development and trade and tourism of the country. It has been providing tourism activities and is playing a major role in opening up of remote and isolated areas of the country. NAC has rendered rescue services at times of natural calamities like earthquakes, flood, landslide, famine etc.

Major benefit generated by the airlines covers the area of national revenue, foreign exchange earnings, employment opportunities and the economical air transport services within the country. Mission and objectives of the NAC NAC was established with a view to develop the air transport services in Nepal. The airlines have contributed a lot in the upliftment of economic state of the country. Like other organization, NAC also have some objectives. They can be discussed as follows: 1. To provide economical air transport services within and outside the country. 2.

To provide diversifying air transport services and to uplift and develop the economic condition of Nepal. 3. To have a continuous development of air transport in Nepal. 4. To promote tourism activities and open up remote isolated areas. 5. To ensure optimum profitability while offering services at economical fares as far as possible. 6. To maintain its role as the nation sole flag carrier. 7. To facilitate its customers by making regular flights to all the major destinations in the world. 8. To manage air transport services inside and outside the country in a safe, economical and professional manner.

Services provided by NAC 1. NAC has joined major cities of Nepal and most of the major cities of the world by providing faster traveling facilities. 2. NAC provides air travel facilities to the general public at reasonable prices. 3. It contributes to the economic development of the nation. 4. Flights to remote mountainous regions have made life easier for the people there. 5. It has backed other organization like insurance companies, banks, travel agencies, hotel etc. 6. It regularly organizes charity functions like blood donations. 7. It contributes to national tourism sector. Department and their function of NAC

NAC is one of the biggest and reputed airlines in Nepal. It has been serving Nepal’s people, economy and visitors since forth-nine years. Few airlines have faced such challenges, few have grown so fast and few have contributed more to their country’s growth. Each department has its own function and importance. Each and every department is interrelated and interdependent and all departments have some objectives i. e. to achieve the goal of the corporation outlined by government. ? Customer service department: This is an important department of NAC, which handles all the function related with PR.

It deals with all the issues related to the Public facade of the corporation. ? Engineering Department: This department mainly deals with repair and maintenance of aircraft, make periodical maintenance plan, repair of spare parts, replacement of aircraft parts and accessories. ? Marketing Department: This is an important department of NAC, which handles all the function related with marketing. Fares and ticketing is the major function of this department. ? Finance Department: This department covers overall financial activities of the organization.

This department prepares all the financial statement of NAC like Balance Sheet, Profit Statement and it also does the financial and budgeting control. ? Corporate Department: The major function of this department is to prepare annual reports and control the revenue and expenses of the organization. This department handles the function like purchase, lease of aircraft, fleet valuation, making annual operation plan etc. ? Personnel and General Service department: This department is the combination of personnel and general service department.

Personnel Department is for human resource development, manpower planning, and recordkeeping. Their function is to select and train adequate personnel in the organization and General Service department provides the general equipment and other materials. ? Operational Department: This department deals with the flight operation of the airlines. This department looks over captain crew operation and services given by cabin crew in aircraft. The main function of this department is crew scheduling, orienting and training the cabin crew and arranging flight simulation training for safe flight operation. Statement of Problem

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