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Nepal Investment Summit 2017

Airport

  • Sector Overview

  • Opportunities

Sector Overview

Airports in Nepal have come a long way since the first landing of a Beechcraft in Gauchar Airport in 1949. The 48 airports interspersed throughout the country provide connectivity in a country with mountainous terrain and an underdeveloped road network. However, despite this progress, Nepal’s airport sector faces multiple challenges in terms of cost, safety and service. Out of the 48 airports, only 11 have paved runways and are operable year-round and only 15 are served by regular scheduled commercial flights. The majority of Nepal’s airports require significant investment to upgrade them to modern standards.

Tribhuwan International Airport (TIA), Nepal’s only international airport, currently handles approximately 3.2 million international and 1.5 million domestic passengers per year. The airport is served by 26 international carriers offering direct connections to 23 destinations in Asia and Europe. Additionally, 34 domestic carriers offer scheduled flights to 14 regional airports, as well as mountain flights. A surge in labour traffic and increased economic activity in the Indo-China region at the turn of the millennium have manifested in double-digit increases in international traffic, putting a strain on TIA’s infrastructure (physical and service delivery). As a result, the Government of Nepal has undertaken several initiatives to improve airside and landside infrastructure.

Two new airports at Pokhara and Bhairawaha are scheduled to commence international operations in the coming years. Conveniently located at major tourist destinations, they are expected to alleviate some of the congestion at TIA. In addition, the geographical constraints of the proximal airspace at TIA and its solitary runway render the development of a new airport in the capital necessary within the next decade. The Government of Nepal has identified Nijgadh, in Bara, which is approximately 75 kilometres from Kathmandu, for the development a new international airport.

The development of world-class airport infrastructure would enhance Nepal’s connectivity with the rest of the world and accelerate economic development. It would also improve Nepal’s marketability as a tourist destination, thereby increasing tourism revenue, which would help fund the infrastructure required at regional airports.

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Opportunities

Growth in air travellers

  • Nepal has experienced double digit growth in international air traffic since the turn of the century and the number of tourists is expected to increase in the coming years. 
  • Approximately 1,700 Nepalis travel abroad every day for work, mainly to Malaysia, Qatar, UAE, Kuwait and Saudi Arabia. 
     

Geo-strategic advantages

  • Nepal is strategically located between India and China offering the possibility to develop hub/transit airports.
  • As Nepal is a landlocked country with limited road networks, airplanes are a convenient way of transporting cargo and agricultural produce, as well as high value products. 
     

Construction of new airports and management and operation of existing airports

  • The Government of Nepal plans to construct a new international airport in Nijgadh, Bara, which is about 75 kilometres south of Kathmandu. 
  • The government is also considering public-private partnerships in the management and operation of existing airports, which presents opportunities for the expansion of non-aeronautical services (such as airport taxis, duty free shops, parking management, eateries, and recreational and hospitality facilities).

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