TIA’s reduced flight hours could stall economic growth

Nepal: How big will the impact be as Nepal’s major international airport closes for ten hours starting Friday?

 

photo: TKP

Economists say it’s too early to quantify, but the losses for the Nepali economy will be huge.

Nepal’s economic momentum has slowed down since the late September floods, and the government’s decision to close the key airport could stifle growth.

“It will be a big setback for the country’s ailing economy as it will hit tourism and business activities, including transport, hotels, restaurants, telecommunication and other sectors,” said Bishwambhar Pyakurel, a noted economist.

Pyakurel called it a deliberate “restriction” imposed by the government, despite it having many alternatives to carry out construction at the airport.

Tickets prices are soaring, with most destinations, including Nepal’s labour markets, witnessing a fourfold price rise due to a widening gap between supply and demand.

A notice to airmen, popularly known as NOTAM, issued by the Civil Aviation Authority of Nepal, states that the airport will be closed from 10pm to 8am from Friday for five months, until March 31, to expand the taxiways.

The airport is currently closed from 2am to 6am.

Two parallel taxiway projects are ongoing at the Tribhuvan International Airport in Kathmandu. The extension of the parallel taxiway was initially planned in 2009.

Travel trade entrepreneurs said the civil aviation body’s mismanagement could shave off at least Rs50 billion in airline and tourism industry revenues, even as the government struggles with revenue generation.

The outlooks for 2024-2025 of the World Bank, the Asian Development Bank, and the International Monetary Fund forecast economic recovery on the basis of improved tourist arrivals in Nepal.

Growth in food, transport, and accommodation sectors have been better than expected even as other economic indicators lag.

In September, the Asian Development Bank revised Nepal’s economic growth forecast upward to 4.9 percent for the current fiscal year beginning mid-July, based on projected agricultural and electricity output growth and buoyant tourist arrivals.

The National Statistics Office’s annual account estimated that accommodation and food service activities, which are linked to tourism, would see a robust growth of 21.84 percent, the highest among 18 economic compositions in the Nepali economy, in the last fiscal year ended mid-July.

According to the respective ministries, the late monsoon floods and landslides affected agriculture and electricity output, and now tourism has received a big jolt.

It will be more painful for domestic airlines as winter will bring more fog and pollution, curtailing flight frequencies.

“It’s an unplanned construction,” said Pyakurel. “Today, time is money. For trading, business and leisure, coming to Nepal will be a big challenge,” he said, adding that the airfares are so high that tourists and businessmen will think twice before flying. Hoteliers say that due to high ticket prices, key events planned in Kathmandu have either been postponed or cancelled.

As part of the improvement plan, a 1,140-metre-long parallel taxiway is being built on the runway’s southern side, or the Koteshwar end. This will connect the existing international apron to the end of runway 02.

Similarly, another 450-metre-long parallel taxiway is being built at the northern end of the runway.

Considering the planned infrastructure, the maximum runway capacity will see 42 aircraft movements per hour in mixed-mode operation, enabling 187,000 aircraft movements per year from the 128,449 flight movements last year.

In 2023, the Kathmandu airport recorded 8.7 million passengers—4.54 million international air travellers and 4.15 million domestic ones, according to statistics of the Tribhuvan International Airport.

Similarly, in terms of flight movement, the airport handled 128,449 flight movements—31,460 flights by international airlines and 96,989 by domestic carriers.

Travel trade entrepreneurs say the ill-planned construction would take way too long, extending until another peak tourism season in spring (March).

“These will be painful months for travel trade entrepreneurs as the plan is being implemented in the peak tourism season. We, however, cannot oppose the airport’s infrastructure development,” said Sagar Pandey, president of the Trekking Agencies Association of Nepal.

“On different occasions, we have suggested that the government and the civil aviation body find alternatives to such a long closure, such as incentivising airlines to fly from Bhairahawa and Pokhara international airports.”

However, international airlines are hesitant to connect to the new airports, which have remained idle for months due to the technical and financial issues of flying to them 

Pandey said they might lose at least 40 percent 

of trekkers this year considering the flight cancellations.

Nepal Tourism Board has revised its 2024 tourist arrival forecast to 1.1 million from the projected 1.3 million. As of October, Nepal has received 900,000 tourists.

Some entrepreneurs say that five hours of construction time, as it used to be, was appropriate, but insiders suspect that a 10-hour closure would force many airlines to divert to Bhairahawa.

For instance, on October 27, the Civil Aviation Authority of Nepal (CAAN) took action against a Thai AirAsia flight, refusing to allow it to land at Kathmandu airport.

Media reports show that the flight was later permitted. However, after the plane landed, authorities temporarily suspended the airline and its general sales agent. Later the restrictions were lifted on the “condition” that the airline would fly from Bhairahawa as well. Airline officials say the “punitive measure” was not the aviation regulator’s first action.

On October 30, 2022, the CAAN cancelled Nepal Airlines’ scheduled flight to Delhi as punishment for defying instructions to move some of its international services to the newly-built Bhairahawa airport.

Nepal Airlines’ jet remained on the ground, and more than 500 passengers were affected by the last-minute cancellation.

“I would like to seriously draw the attention of the government that Tribhuvan International Airport is being closed for 10 hours daily from November 8 to March 31. It cannot be considered normal to close an international airport for 10 hours to build structures. Earlier, during the rehabilitation of the main runway, the airport was closed only for 5/7 hours at night,” lawmaker Udaya Shumsher Rana wrote on X on October 29.

“It is clear that closing the Kathmandu airport means diverting flights to Pokhara and Bhairahawa to show that those two airports are fine. There are technical reasons behind international airlines not being ready to fly to these two airports. Undoubtedly, the Civil Aviation Authority leadership is trying to hide its weaknesses by closing the Kathmandu airport for 10 hours.”

Rana argued that if this decision is not revised, Nepal’s global image and tourism business would suffer.

The airport closure will also hit domestic flights. Buddha Air, Nepal’s largest domestic carrier, currently operates 180 daily flights. As the airline must reduce its flights to 135, there will be a substantial drop in its revenue and government’s taxes.

Some other domestic airlines have complained to the regulator that flight allocation is not proportionate under the new arrangement.

After years of continuous negotiation and bargaining efforts last year, the COP28 summit in Dubai ended with a comprehensive agreement to operationalise the loss and damage fund for climate change-affected countries.

The World Bank is presumed to host the loss and damage fund in conformation to the agreement at COP29 and simultaneously a competent board shall shape policies, structures, and governance to operationalise the fund.

This fund is designed to support vulnerable countries dealing with the impacts of climate change that surpass human adaptability, such as loss of livelihood due to rising sea levels and salinity intrusion or loss of lives, homes, and other infrastructure due to extreme floods and cyclones.

It is essential to understand the nuances and dynamics of loss and damage at the micro level from the local community perspectives for successful implementation of the COP29 agenda.

Bangladesh is the poster child for climate change holding the seventh position on the Global Climate Risk Index 2021. The southern region of Bangladesh, which lies in the coastal belt, is highly susceptible to various rapid-onset hazards including cyclones, coastal erosion, and seasonal flooding, as declared by Mamun Hawladar from Sonnasi village, Khaulia Union, Morrelganj, Bagerhat.

Mamun informs that the area faces two to three cyclones annually and a minimum of one tidal inundation per month during monsoon.

Frequent and intense cyclones and floods produce recurring losses and damages in the agriculture related sectors. He further stated that during June of this year, Cyclone Remal flooded and washed away the autumn rice crops. Mamun lost Tk 45,000 at that time and the recent seasonal floods destroyed his winter rice crops as well.

Besides rapid-onset hazards, slow-onset hazards like salinity intrusion, sea level rise, and global warming are extensively present in coastal Bangladesh. Particularly, due to climate change-induced sea level rise and frequent inundation, salinity has been intruding into the soil and water in coastal Bangladesh at a higher rate than earlier.

Abul Hossain, one of the salinity-affected farmers from the Khaulia Union, Morrelganj, stated that “In our community, salinity increases largely during mid-February to mid-June (Phalgun, Chaitra, Baisakh, and Jaishtha in Bengali calendar months).”

Hossain additionally recollects that “During my childhood, I saw my parents used to harvest two times a year, but now we cannot yield crops even once a year due to salinity intrusion. We encounter recurring losses and damages in crop production every year. Salinity intrusion damages paddy fields, seedbeds, and vegetable gardens. This year we could not yield any rice and vegetables.”

Likewise, aquaculture practices and livestock rearing are also under threat due to salinity intrusion. Hossain further divulged that due to salinity intrusion a significant decrease in the populace of fish in the ponds has been noted.

Livestock has also been suffering from more diseases. Unfortunately, losses and damages incurred by slow onset events as such are not well recognised in the current loss and damage discourses and frameworks. To recapitulate, rapid and slow onset climatic events both produce recurring loss and damage in the affected communities concurrently.

There are minimum existing adaptation initiatives and they fall short of adapting to current and imminent climate change impacts due to the increasing frequency and intensity of climatic events. Further, financial constraints due to shrinking funding, pose hurdles in the adaptation process.

Consequently, existing adaptation gaps leave unavoidable long-term loss and damage in affected communities, further affecting food security, health and nutrition of the affected communities. While some economic and financial damages are repairable to an extent, the shadows of certain loss and damages are irreparable and persist generationally.

This loss and damage cycle requires holistic, integrated, and continuous climate financing urgently from local, national, and international government and non-government actors.

Amid the COP29, most affected communities conclude to put forth their demands to world leaders. Affected communities urge all stakeholders to unify in efforts to build on the momentum and commit to a coherent and collective action plan to address loss and damages in vulnerable countries and regions.

First, leaders must come to COP29 prepared to scale up financial pledges to the fund to address climatic change induced loss and damage effectively and efficiently.

Second, concerned stakeholders must unify to formulate and strengthen policies, mechanisms, and governance to ensure compensation and reparation for current and past losses and damages, incurred by both rapid and slow onset climatic events.

Third, considering the principles of distributive justice, equity-based sectoral financing is urgent in the most affected sectors rather than single-sector financing.

Fourth, there must be strengthening of inter-sectoral coordination mechanisms at the regional and local levels for operationalising the loss and damage fund and governance.

Lastly, it is urgent to facilitate collaborative research, create data-driven evidence on loss and damage at the community and national level, and accordingly integrate advocacy efforts for viable environment, climate justice, and climate finance from various sources at various levels.

 

-In Association with ANN