Air fare drops slightly as NOC decreases the price of Aviation Fuel

Air fare drops slightly as NOC decreases the price of Aviation Fuel

September 21, 2016 – Kathmandu

Following a slight drop in fuel prices levied by Nepal Oil Corporation (NOC), the domestic carriers of Nepal have decreased their air fare a little cheaper. The new slightly dropped airfare was effective since yesterday and this price drop is the third time this year the airlines have cut fuel surcharges to make the airfare lower according the drop in aviation fuel price.

The fuel surcharge added in the fare has been deducted by Rs 53 to Rs 193 depending on the distance of sector. This deduction in airfare can be a relief to passengers who are planning to travel in a domestic carrier for the upcoming major festival of Nepal, Dashain and Tihar. However, it will not be beneficial to the travelers who made advanced booking of their ticket for Dashain festival before yesterday as the decrement came too late.

Buddha Air - Aviation Nepal
Buddha Air, a domestic carrier at Domestic Ramp

NOC sold the aviation fuel to the operators in Rs 94 per liter there by decreasing Rs 5 per liter with a profit of Rs 12.41 for NOC. The airlines then made a cut on fuel surcharge as per the agreement made between Civil Aviation Authority of Nepal (CAAN) and Airlines Operators Association of Nepal (AOAN) about the need of decrement in surcharge when the fuel price drop exceeds Rs 4 per liter.

On July 4, last year the airliners deducted the surcharges by Rs 115 to Rs 384 when NOC deducted the price of Aviation Fuel by Rs 10 making it Rs 99 per liter.

Data analysis shows that domestic carriers welcomed 1.36 million passengers in 2015, the figure was 1.45 million the year before. Travelers figure has been declining constantly since 2012 which was in peak during 2008 around when people were forced to choose air travel due to continuous road transport interruptions and competitive market.

Yeti Airlines - Aviation Nepal
Yeti Airlines a domestic carrier at Domestic Ramp

The travelers figure showed growth of 13 percent in 2008 that further increased to 33 percent in 2009 as fares were competitive in competition. And the passenger movement increased 12.83 percent in 2010 thereafter the growth rate started dropping in 2011 and has shown a negative figure since 2012.

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