Nepal nears the dawn of the Visit Nepal Year (VNY) 2020. Travel traders, hoteliers, and airlines engage themselves to add new values in their products to appeal and delight 2020-travelers. VNY teams prepare to offer milestone programs to celebrate the campaign. Government of Nepal engages the Nepal Tourism Board and VNY committees in this campaign.
Over the last months, stakeholders have engaged in discourses with the governmental bodies. They have discussed ways and means to best celebrate VNY 2020 campaign. They have discussed obstacles and outlets. Meanwhile, the trade and industry have called the government for policy redressal for ATF pricing in parity with the international market without any delay.
Like any consumer decision, travel decision is a function of economic rationale and behavioral aspect of a traveler. Setting aside behavioral aspect, for the traveler, what does it matter the most ? Economic cost and utility. In most of the travels, air fare is a big cost factor. In air fare calculations, fuel cost is the biggest input cost – in the range of up to 40% of the direct operating cost. Unfortunately, Nepal sells the most expensive aviation turbine fuel (ATF) in the world !! In August, the selling price of ATF in TIA was US$ 1,050 per kilo liter vis-à-vis less than US$ 700 per kilo liter in Delhi and Dhaka airports. ATF prices in Kuala Lumpur and most of the middle east airports are about the half of TIA price. TIA ATF price is more than double of the average international market price. August ATF price US$ 1,050 per kilo liter continues into September.
High ATF cost is a deterrent for international airlines to operate in and out of the airport. Keeping the ATF cost in parity with international market will be an appeal factor for foreign airlines to start new services into TIA and for existing ones to increase frequency of flights. New services and additional frequencies will open a broad gateway for more arrivals.
On the other hand, the ATF cost parity will attractively lower cost of flights resulting in lower air fares. Lower air fares will lower cost of travel. Lower travel cost, VNY promotion, new products, and new value creations will also result in more arrivals.
Correcting ATF pricing policy of the government of Nepal is the need of the hour – in the particular context of VNY 2020 and arrival targets. Industry sources have expressed a strong hope that government will seize this opportune time for a timely decision in this matter.