Yeti to buy ATR aircraft under fleet renewal plan

Yeti to buy ATR aircraft under fleet renewal plan

Nepali private carrier Yeti Airlines is in the final stages of inducting two ATR 72-500 turboprops into its fleet as part of its cost-cutting and operational consolidation programme.

It plans to take delivery of two 74-seater ATR 72-500, the most fuel efficient aircraft in its category, by mid-2017. A number of 52-seater ATR 42-500 turboprops will join the fleet by mid-2018, the airline said.
“We are currently studying the performance and economic viability of these aircraft,” said Bhim Raj Rai, ground handling and media manager at Yeti Airlines. The carrier has not revealed its fleet renewal investment plan.
Yeti will be the second operator of the aircraft type in the country after Buddha Air. It plans to use them to support its domestic network and provide enhanced connectivity on trunk and short-haul routes.
The ATR 72 will fly on routes like Bhadrapur, Biratnagar, Dhangadhi, Nepalgunj and Bhairahawa while the ATR 42 will serve Janakpur, Tumlingtar, Bharatpur and Mountain sectors.
Rai said that the ATR 72 would replace its 29-seater Jetstream 41s on trunk routes and that the
smaller planes would be phased out gradually.
“We have planned to induct aircraft from the ATR family as part of our cost-cutting and operational consolidation programme,” he said. “It’s also our objective to progressively renew our fleet with more fuel-efficient and higher capacity aircraft in the highly competitive domestic market.”
Yeti Airlines was established in 1998. It currently possesses seven Jetstream 41s and serves 10 destinations.

Cutthroat Competition
The domestic airline industry is likely to see a shakeup in terms of airfare with Shree Airlines announcing plans to begin fixed-wing operations with a 50-seater Bombardier Canadair Regional Jet (CRJ-200) and Yeti revealing its strategy to replace its fleet with bigger aircraft.
As the number of planes in the air and the number of airlines in the market expands, fierce competition for a piece of the pie can be predicted among three major domestic airlines—Buddha Air, Yeti and Shree.
“A progressive fleet renewal policy and entry of new players in the market is good for the travel and tourism industry, but they should also assess past examples of how several airlines have collapsed,” said former tourism secretary Yagna Prasad Gautam.
“Obviously, it was due to unhealthy competition among the operators. It may be good for passengers, but it also creates pressure on airline profitability. Therefore, operators should consider three basic indicators—safe, regular and affordable—for a sustainable future,” he said. “And to consider these indicators, a big level of investment is required.”
Experts said that due to a rising Nepali middle class and poor road conditions in the country, domestic air traffic demand was likely to swell in the future.
Nepal’s domestic air passenger movement continued to shrink for four straight years, dropping 5.96 percent in 2015. According to the data of Tribhuvan International Airport (TIA), domestic carriers received 86,510 less flyers last year. These airlines carried 1.36 million passengers in 2015 against 1.45 million the year before.
Passenger movement has been on a constant decline since 2012, marking a departure from the robust growth rates seen since 2008 when airlines were flying high due to competitive airfares and constant protests and road blockades that forced travellers to take to the air.
Airlines saw a heady growth of 13 percent in 2008 which jumped to 33 percent in 2009 as they cut
fares amid stiff competition. Although passenger movement increased 12.83 percent in 2010, the growth rate started dropping in 2011 and has shown a negative growth since 2012.

Airport Stress
With the planned induction of relatively bigger aircraft in the domestic market as well as in international operations, Nepal’s sole international airport is likely to be strained further in terms of parking space and capacity to handle new types of aircraft.
The domestic market is likely to see nearly a dozen new aircraft by 2018. A like number of large jets are set to arrive with Nepal Airlines and Himalaya Airlines planning to spread their wings.
“We see challenging days ahead,” said Rajan Pokhrel, deputy director general of the Civil Aviation Authority of Nepal. All carriers have concentrated their operations at TIA.
“As the construction of international airports in Pokhara and Bhairahawa will take some time, the expansion projects are likely to create much pressure on TIA,” he said. “We cannot stop the growth of the industry, but we do have an alternative—tell airlines to establish their bases outside Kathmandu,” Pokhrel said.
Airlines said that the space crunch at TIA could be eased if they were allowed to make airport to airport connectivity. For example, airlines could operate flights between Biratnagar and Bhairahawa instead of having all flights originate in Kathmandu.

Source: The Kathmandu Post