Malaysia Airlines - Orient Aviation

COMMUTER AVIATION
Yeti scaling new heights
By Charles Anderson
Eight years ago Yeti Airlines
began business operating just
two Twin Otters, flying from
Kathmandu to remote areas
of Nepal. There was nothing
special about another fledgling carrier
arriving at the short take-off and landing
(STOL) airports peppered around the
mountainous country, apart perhaps from
its name. Many small domestic operators
have tried their luck over the last 10 years,
with many failing to survive.
Now Yeti has a 10-strong fleet, split
evenly between Twin Otters
and newly-acquired Jetstream
41s, flying on trunk routes
as well as to out-of-the-way
destinations. It claims 55%
to 60% of domestic market
share and the carrier has just
won permission to expand
overseas.
Executive director, Bijaya
Shrestha, told local media Yeti
could start flying on some of
the routes designated by the
government – Bangkok, Seoul,
Sharjah, Lhasa and Butan
– within a year. But general
manager, Umesh Chandar Rai,
was more circumspect when he
talked to Orient Aviation.
“The groundwork has started, but the
project is in the preliminary stages and
not much can be stated at the moment,” he
said. Rai’s caution is understandable. Three
Nepali airlines have launched international
services in recent years, only to withdraw
them and one other failed to begin within the
stipulated timeframe.
Yeti, however, is not planning to go
it alone. The carrier is looking to form a
joint venture with an overseas partner that
can inject capital and expertise to make the
expansion work, said Rai.
Outside airlines are increasing services to
Kathmandu, but Yeti was the only operator
to respond to the Nepal government’s
latest push to find an established domestic
company – it must have been flying for five
38 ORIENT AVIATION JULY/AUGUST 2007
years – ready to join national carrier, Nepal
Airlines, in offering overseas services run
by Nepalis.
Troubled Nepal Airlines, which dropped
the “Royal” from its name after Nepal’s
king lost his powers last year, is asking for
approval from its government owners to
modernise its fleet of two B757s and seven
Twin Otters. Meanwhile, it is seeking to lease
another B757 from August for its New Delhi,
Bangkok, Kuala Lumpur, Dubai and Hong
Kong services.
While Yeti moves cautiously in that
direction, it has been quicker off the mark in
increasing domestic services after a shakeout
Yeti Airlines: spending $1 million on safety and navigational
upgrades for mountain flying
in 2004, which saw a number of operators
go under when the Maoist insurgency cut
tourist arrivals that led to over-capacity on
main routes. Yeti took the chance to fill the
gap when the ensuing bankruptcies in turn
led to a shortage of seats.
“We were basically a STOL operator
ferrying passengers and food stuffs into
remote areas which had no access to
roads,” said Rai. “But in 2004 we saw the
opportunity to expand into the non-STOL
market by moving to fill the void.
“We acquired three Saab 340Bs on lease
and quickly became a major player in this
segment of the domestic market. Later it
was felt the Jetstream 41 was more suited to
these sectors – hot and high with short flight
times.” Four were acquired last year and a
fifth arrived in late April.
“The strategy is to base our schedules
on four Jetstream 41s and use the fifth as
a backup to ensure delays due to technical
snags or weather conditions are kept to a
minimum,” said Rai
Yeti has three main domestic rivals,
including Nepal Airlines. Thanks to this
and to ongoing instability, Rai doesn’t see
further expansion in the near future.
Meanwhile, Yeti has the dangers of flying
in Nepal to contend with. It has lost two Twin
Otters, one in 2004 and the other in 2006,
resulting in a total of nine deaths, through
crashes in remote areas. Now it is spending
US$1 million installing up-todate
navigational and safety
avionics on its turboprops.
“Previously it was considered
unnecessary and economically
unfeasible for Twin Otters to be
equipped with such expensive and
advanced avionics, but we think
it is the answer to eliminating
the risks inherent in flying in the
mountains of Nepal,” said Rai,
who pointed out Nepal’s four
other Twin Otter operators have
all suffered fatal accidents due to
controlled flight into terrain.
“STOL operations in these
remote and mountainous
areas do represent a challenge,
especially as the support from
air traffic controllers on the ground is almost
negligible,” he said. “The Twin Otter is widely
recognised as the best for such operations
and maintenance of these aircraft has never
been an issue. It is largely an operational
challenge.”
Yeti is owned and funded by brothers
Lhakpa Sonam Sherpa and Ang Tshiring
Sherpa. Rai said because of the difficulties
inherent in running a publicly traded company
in Nepal, it is likely to stay private.
He doesn’t see that as a problem.
“Important decisions are made after seeking
opinions from the relevant people within
the company,” he said. “This has helped in
arriving at the right ones. Most other airlines
in Nepal have been run by one individual,
like a personal fiefdom.”