Another budget airline suspended in Nepal

June 30th, 2008 - 2:02 pm ICT by IANS  

By Sudeshna Sarkar
Kathmandu, June 30 (IANS) Only five months after the launch of a much-hyped joint venture budget airline with Middle East carrier Air Arabia, Nepali domestic partner Yeti Airlines has announced the suspension of the new project from next month. Nepal’s first low-cost international joint venture FlyYeti will stop its Nepal operations from July 16 due to the political uncertainty prevailing in the Himalayan nation and difficult operating conditions.

A press statement issued by FlyYeti said the prevailing adverse situation in Nepal had affected its ability to renew its current aircraft lease agreement, which is subject to the approval of the Civil Aviation Authority of Nepal and expires mid-July.

“The current uncertainty, combined with difficult operating conditions in Nepal and a presently opaque regulatory environment has led the management to decide that it is in the best interest of the company and passengers to temporarily suspend operations,” the statement said.

The joint venture was launched Jan 20, propelled by the growing rush of blue-collared Nepali workers to the Middle East and Malaysia.

Though the company said it would continue to monitor the political and market conditions in Nepal and could resume operations if the situation stabilised, the withdrawal still is a black mark for Nepal’s aviation sector.

In the past, though three domestic airline companies obtained licence to start international flights, two were never able to open their account.

The third, Cosmic Air, caused a fare war when it introduced budget fares abroad, especially to the Indian cities of New Delhi, Kolkata and Varanasi.

However, it became a byword for unreliability and was forced to shut down operations after a string of cancelled flights and irregularities.

Though it announced resumption of flights, it would be a long time before it can regain credibility.

The recent hike in aviation fuel has resulted in a proportionate rise in air fares, hitting budget airlines hard.

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