CAAN’s income declines by 43 percent; Rs 41.1 billion allocated for current FY

Kathmandu / Aug 8: The earnings of the Civil Aviation Authority of Nepal (CAAN) saw a sharp decline of 43 percent in the last fiscal year 2019/20.

Passenger service charge (PSC), landing, parking, navigation and rent, among others, are the main regular sources of income for CAAN. However, with the suspension of scheduled flights to and from the Tribhuvan International Airport (TIA), Nepal’s sole international airport, CAAN’s income has declined. According to the annual progress report of CAAN for the fiscal year 2019/20, the authority had projected to earn Rs 10.54 billion but secured only Rs 5.96 billion in the last fiscal year. CAAN had planned to collect Rs 8.33 billion from regular earnings and Rs 2.21 billion from airport development charge but it collected only Rs 4.61 billion and Rs 1.34 billion, respectively. As the air service remains closed since the country went into lockdown on March 24, CAAN has been unable to collect the expected revenue from TIA.

Meanwhile, CAAN has allocated Rs 41.1 billion for the current fiscal year 2020/21, whereas the budget for last fiscal year was Rs 46.96 billion. The flow of air passengers in countries that imposed lockdowns for a long period like Nepal is likely to be affected further. CAAN’s expenditure is Rs 19.51 billion against the allocated budget of Rs 46.96 billion.

According to the report, the number of international passengers in the first six months of 2020 decreased by 61 percent and the number of domestic passengers by 55 percent as compared to the data collected a year before. The authority has projected that the number of passengers will go down by 80 percent in 2020.

The authority has projected that the airlines’ earnings will go down by Rs 6 billion in the current fiscal year. Likewise, International Civil Aviation Organization (ICAO) has projected that the number of international air passengers will go down to 38 to 70 percent and domestic passengers 28 to 50 percent in the Asia Pacific region in 2020.

The construction of development projects that are being carried out with funds from CAAN’s earnings has been affected due to COVID-19. CAAN has stated that the development and upgradation programs of domestic airports have been hampered by the COVID-19 pandemic. However, big projects that are being constructed with the direct assistance from the government have not been affected.