Airlines, hotels feel the heat of protest against ‘minimum cost system’

The ongoing protest over the decision of Minister of State for Labour and Employment (MoLE) Tek Bahadur Gurung to enforce ‘minimum cost system’ for migrant workers is taking toll on other businesses like aviation, hotels and medical centers, among others.

Many airlines, mostly those linking Gulf countries and Malaysia with Kathmandu, are mulling over reducing flight frequency as their occupancy is taking a dip as foreign employment firms have stopped processing recruitment of the aspiring migrant workers since Wednesday.

Saroj Kumar Kasaju, chairman of the Board of Airlines Representatives of Nepal (BARN), told Republica that occupancy of airlines flight to Gulf countries and Malaysia has been severely affected in the past two or three days. “As migrant workers used to make up major chunk of passengers of these airlines, they are seeing flow of passengers falling. This is affecting their business,” he added.

BARN has also warned that its member airlines will be forced to cut flight frequencies if the current situation persists longer. “If the situation does not improve very soon, all international airlines would be forced to review their frequencies and services in and out of Nepal,” reads a statement issued by BARN on Monday.
Kasaju, who is also a director at Commercial Department of Nepal Airlines Corporation (NAC), said that the occupancy of airlines flying to Kuala Lumpur and Doha has dropped drastically. “Occupancy of flights to Kuala Lumpur has fallen to 40 percent. Similarly, occupancy of flight to Dubai has dropped to around 50 percent,” he said, adding, “Reduction in number of flights is inevitable if the situation doesn’t improve.”

Bharat Kumar Shrestha, president of Airlines Operators Committee of Nepal, agreed with Kasaju. “Airlines should have occupancy of at least 60 percent to be in break-even. Most of the airlines are having occupancy below that level in the past two or three days,” added Shrestha. “Airlines will have no option but to reduce flight frequency if the foreign employment firms do not resume processing recruitment process of migrant workers.”
According to Shrestha, Oman Airlines is mulling over bringing down frequency of flights to one flight per day from existing daily two flights to Muscat. “We had only 54 passengers on Monday compared to an average of 120 passengers in every flight. Clearly the confrontation between the government and foreign employment firms will hit the aviation business severely,” he warned.

Shrestha also said Air Arabia and Fly Dubai are also reducing their flight frequency. Representatives of these airlines, however, could not be reached for comment.

Meanwhile, budget hotels in Kathmandu that largely depends on migrant workers are also bearing the brunt of the protest. Hotels mainly around Gongabu, Kalanki, Bagbazar and Sinamangal are observing decline in occupancy over the past three-four days. “The fall in the number of migrant workers has already affected our business. Room occupancy has already gone down by 30 percent. Our hotel will become empty if the dispute is not resolved soon,” Yama Bahadur Shrestha, proprieter of New Motherland Guest House, Bagbazaar, told Republica.

Biswo Prakash Subedi, under secretary of Department of Foreign Employment (DoFE), said the department has not issued more than 200 work permits brought by the foreign employment firms since Wednesday. It had been issuing around 1,200 work permits per day before recruiting firms launched their protest.

Source: Republica