Buddha Air Pvt. Ltd. Company profile for the year 2009

company profile

Buddha Air

20 09

www.buddhaair.com

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ith the reinstatement of multiparty democracy in Nepal in 1990 and the subsequent liberalization of the economy, the private sector was encouraged to invest in public infrastructure and services. Retired Supreme Court Justice Surendra Bahadur Basnet realized the need and growing demand for mass public transport in Nepal. Buddha Air Pvt. Ltd was established in October 1997 with the objective of giving the people a safe and reliable air transport service. From the very beginning passenger safety was placed in the highest priority. This core value has helped the company earn the trust of millions who have flown with Buddha Air.

company summary Name of the Company

Buddha Air Year of Establishment

11.10.1997 Executive Chairman

Surendra Bahadur Basnet Managing Director

Birendra Bahadur Basnet Type of Business

Domestic Flight Operator No. of Aircraft

Seven Type of Aircraft

Pressurized Beech 1900D (4) ATR 42-320 (3) No. of Sector Destinations

1. Kathmandu 2. Everest Experience 3. Bhadrapur 4. Bhairahawa 5. Biratnagar 6. Pokhara 7. Nepalgunj 8. Janakpur 9. Simara 10. Bharatpur 11. Dhangadi

The Highest Safety Record in 2009 page

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introducing ATR 42-320

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product of the aircraft manufacturers AÊrospatiale of France (now EADS) and Aeritalia (now Alenia Aeronautica) of Italy, the ATR 42-320 is one of the world’s most popular aircrafts to be used by commercial airline operators. The ATR 42-320 is the second development of the ATR 42.

It draws from in-service experience of about 700 ATR aircrafts flying worldwide, with average dispatch reliability in excess of 99.6%. It uses Pratt and Whitney Canada PW121

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engines offering a cruise speed of 250 knots, a fast climb from 1,500 ft to 17,000 ft in less than 10 min, outstanding take-off and single engine performance maintained even in hot and high condition. It has excellent short-field performance and step approach capability.

The ATR 42- 320 makes optimal use of advanced technologies providing fuel-efficient aircrafts to minimize environmental impacts by the growing aviation industry. Highly efficient even while operating at lower

speeds, the aircrafts contribute to a small fraction of aircraft attributable emissions. They operate at low altitudes, have no effect on the ozone layer and upper atmosphere, and provide optimized capacity, to adapt frequencies to the regional airlines requirements. Materials, procedures and technologies used to produce ATR aircrafts are constantly improved and monitored to minimize environmental impact across the entire life cycle.

On 300 Nautical Mile sector, the ATR 42-320 features less

The ATR 42-320 provides passengers with an on-board comfort and services comparable to the jetliner

fuel consumption, lower engine maintenance costs. The aircraft is more efficient than regional jet aircrafts on short-haul routes: it emits about 20% less CO2 per passenger-km than new-generation jets and up to three times less CO2 than older ones.

The ATR 42-320 offers a combination of high overall performance and comfort unmatched in its class, while keeping cost efficiency competitive. The ATR 42320 secondary structure is extensively

made of corrosion-resistant composite material. Generous operational weights adapted to new regulatory standards provide the ATR 42-320 with a maximum range of 840 Nm or an out and return trip of 370 Nm without refueling, both at full passenger payload. Short and narrow runways, hot and high airports, demanding airfields are the daily environment for ATR 42-320 worldwide.

The ATR 42-320 provides passengers with an on-board

comfort and services comparable to the jetliner. It has a high cruise ceiling of about 7,000 m (21,000 ft) with inherent stability and can operate in a maximum altitude of 25,000ft. It features large overhead bins including a handrail to facilitate passengers and crew movement along the cabin and has more windows than rows of seats for optimized views, individual reading lights and cabin attendant call system along with quiet, comfortable and spacious cabins. page

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engineering DEPARTMENT

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uddha Air’s engineering department is one of the largest and strongest in the entire airline industry in Nepal with 16 engineers, 29 technicians and 36 corporate staff and serves as the backbone of the company entrusted with the responsibility to maintain each aircraft in an airworthy condition as stipulated by the Civil Aviation Authority of Nepal (CAAN) and the aircraft operators manuals provided by the manufacturer. All engineers are provided periodical refresher by aircraft manufacturers

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and type rated there. A new hangar will also be soon constructed.

For assured effectiveness the department is subdivided into Maintenance, Maintenance Planning, Workshop, Quality Assurance, Technical Records, Library, Procurement and Stores. CAAN, Hawker Beechcraft, Pratt and Whitney Canada, COSCAP, and ATR regularly carry out audits.

Our total spare inventory including workshop amounts to US $ 3.5 Million.

m.i.s.

DEPARTMENT

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he Management Information System division grew out of the need to face the challenges faced by a modern corporate house. The division is responsible for developing, operating and maintaining technology, software, and databases for planning and monitoring departmental and overall performance as well as generating, compiling and disseminating required information for the management to make decisions.

The entire system runs on eleven different modules to ensure regular availability of information, continuous development and full utilization of businesses

for formulating strategies and policies and include: Finance and Budget Control, Revenue Accounting, Local Reservation, Comparative Market Research, Personal and Payroll, Human Resource, General Inventory, Operation and Crew Planning, Engineering Inventory, Engineering Planning, and Royal Club Frequent Flier. With the entire desk staff having access to modern, fast and updated computer systems, information vital to run daily operation successfully is at the touch of the fingertips, enabling mangers to take the correct decisions and have it implemented effectively.

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operation DEPARTMENT

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B

uddha Air started its operation with one Beechcraft 1900D, six commanders, six co pilots flying out to five destinations within Nepal.

Today the company has four Beechcraft 1900D, three ATR 42 and employs 92 staff members in the Operations Department thus eliminating over fatigue of pilots, one of the major causes of aviation accidents all over the world. All commanders have logged in at least 4000 flight hours in the Beechcraft and over 10,000 hours in total. The company has also established and obtained approval of Beechcraft 1900 type rating training of the flight crew members and

flight dispatcher from the Civil Aviation Authority of Nepal with the objective of keeping the crew updated in respect to the aircrafts.

All type rating and upgrading is done at the aircraft manufacturer certified six axis simulator in New York and Bangkok.

All type rating and upgrading is done at the aircraft manufacturer certified six axis simulator in New York and Bangkok. We also have a stringent policy of an annual refresher simulator training at Flight Safety International, La Guardia, New York and ATR’s six axis simulator in Bangkok. All Buddha Air crew members have instrument rating endorsed in their license while cockpit and cabin crew members are provided refresher courses on safety aspects of the flight and in providing a comfortable flying experience to passengers. Our five flight dispatchers hold licenses from the civil aviation authorities of Thailand and Nepal.

marketing DEPARTMENT

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uddha Air is today the leader in domestic civil aviation and everest experience flights.

Surviving today’s cut throat competition would not have been possible without the 124 staff dedicated to the marketing department.

Buddha Air marketing department has worked hard to ensure that passengers get the best of service and welcomes feedbacks which are looked upon very attentively. We also regularly interact with tour and travel operators with the objective of making travel as safe, reliable, and comfortable as possible. Our in house trimester publication Buddha Yatra is in its third year with 15000 copies of every issue being distributed around. Yatra also contains a feedback questionnaire, and passenger feedback is promptly acted upon.

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Details of Direct & Indirect Tax Period from 1997/98 to 2008/09

finance DEPARTMENT

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T

he Buddha Air finance department has withstood the test of time developing and implementing financial policies, strategies, plans and programs, preparing annual revenue and expenditure budgets based on cost analysis, developing financial performance indicators, monitoring, analyzing and reporting financial status and information, collecting sales and handling cash and bank transactions, handling all payments as per the financial policies and rules, maintaining accounts of revenues and expenditures, preparing all required financial statements, including final accounts, checking sales revenues and control cash value documents of sales outlets, assessing and settling tax obligations and assist in conducting internal audit.

The finance department is divided into the Revenue and Expense division managed by a staff of 32. Each division works with its own accounting software keeping the rest of the management and staff on its toes encouraging them to work even harder to give the best.

Starting with an initial investment of more than USD 8 million which the company was able to payoff in six years, Buddha Air today is worth over USD 13 million.

In 2007 – 2008 it earned a total revenue of over USD 7 million. The projected income for 2008 – 2009 is expected to cross USD 10 million. For the last 12 years of operation, Buddha Air has enjoyed a healthy net profit.

Buddha Air’s clean and transparent audit records enabled it to receive a loan from the International Finance Corporation of the World Bank for the purchase of two of the three new ATR 42-320.

human res.

DEPARTMENT Department/Station Finance

No. Of Employees

35

MIS

9

Human Resource

5

Security Division

11

Engineering

82

Operations

92

Marketing

124

General Service Department

49

Out Stations

94

Total

501

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uddha Air has total staff strength of more than 500 making it amongst the top employers in the country, therefore its Human Resource Department’s primary concerns has been to plan and manage human resource functions, to ensure regular availability, continuous development and full utilization of necessary human resources to get effective results from staff while keeping them motivated.

To productively manage Human Resource Buddha Air introduced Staff Performance Management System (SPMS) on October 2004. SPMS is a scientific and just evaluation procedure that provides an effective management framework for quality human resource

performance contributing to the achievement of organizational goals. It aims to help employees plan, achieve and sustain good performance and further enhance it by supporting and developing employees while aligning their performance with business and functional goals of the company.

SPMS also assess training and development needs of employees and plans for their growth and development.

Periodic trainings and refresher classes are also conducted as per the consolidated training program developed by the company.

Our newly established non-political Independent Employee’s Union is totally dedicated for the betterment of the employees and the company.

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safety MEASURES

S WEATHER RADAR SHOWING THE WEATHER AHEAD

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afety is the highest priority for Buddha Air. No compromise is made on the aircraft’s maintenance. We are proud to say that we have no history of any mishaps or aviation insurance claim

from the inception of operation.

Every aircraft in the fleet is thoroughly inspected meticulously every day as per the Standard Operating Procedure mentioned by the Nepalese Civil Airworthiness

Requirement and the Aircraft Operators Maintenance Manual provided by the manufacturers. The Beech craft 1900D and the ATR 42 – 320 both have their own unique inspection procedure. Qualified and certified aircraft maintenance engineers with many years of experience from the company’s Engineering Department carry out a detailed daily safety inspection check.

Buddha Air is the only private flight operator in Nepal to install the Aircraft Data Acquisition System (ADAS) device in all its aircrafts in addition to the regular Cockpit Voice Recorder and the Flight Data Recorder. ADAS provides engine and airframe electronic operational data which is downloaded each day. This provides an early warning system for the prior operation that exceeded the permissible range; the cockpit display indicates when an automatic trend sample is taken; and allows them to quickly take a manual sample at any time for engines. For the maintenance personnel this provides data collection, storage and analysis tool to monitor the overall health of the aircraft. For the management the device enables the documentation of incidents of operation outside permissible limits and is useful in spotting patterns of misuse. It can provide downloadable data for reports for individual flights or a complete history of the aircraft covering all operational incidents and the maintenance action taken in response.

The FDR onboard the aircraft records many different operating conditions of the flight. By regulation newly manufactured aircrafts must monitor at least eighty eight important parameters such as time, altitude, airspeed, heading, and aircraft attitude. FDRs can also record the status of more than 1000 other in-flight characteristics that can aid in investigations. The items monitored can be anything from flap positioning to auto pilot mode or even smoke alarms.

With the data retrieved from the FDR, the Safety Board can generate a computer animated video reconstruction of the flight. The investigator can then visualize the aircraft’s altitude, instrument readings, power settings and other characteristics of the flight. We also have the only laboratory in Nepal with the special equipment to read the data. The device is a tracking system that uses state of the art technology to record each and every action of the aircraft. This data is downloaded every day and immediately sent to be reviewed by the flight safety committee and to the aircraft manufacturer Pratt and Whitney in Canada under the Flight Management Plan. The analysis enables us to see whether there have been any mistakes and gives an opportunity to prevent the same from repeating the same. Any part that has gone beyond the normal level mentioned by the Manufacturers Manual for Safety Inspection is immediately replaced with a new one and sent to the Repair Center.

Flight safety is about keeping both the aircraft and the crew that operates it in top shape. Pilots and engineers are sent on regular training programs directly to the manufacturing companies. Our Beech Craft crew go through the Pilot Proficiency Check Training and receive their trainings from Flight Safety International in New York while the ATR crew receives their training from

France. All our engineers are trained in the Raytheon Maintenance Training Center, Flight Safety International, Wichita, USA, Pratt and Whitney Canada and the Singapore Training Center. In addition our technicians, engineers, flight operation officers, are sent on regular trainings to Bangkok Civil Aviation Training Center in Thailand.

Buddha Air is the only airline operator in Nepal qualified to carry out NDT requirements. All maintenance is done in our very own workshop.

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NUPTSE

Buddha Air offers a panoramic view of the Himalayas in just one hour everest EXPERIENCE

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T

he Himalaya is the youngest yet highest mountain range in the world and forms a natural border for Nepal in the northern front. For Nepalese these mountains are the sacred abode of the gods but they also continue to captivate millions around the world due to their sheer majesty.

Of the fourteen peaks higher than 8000 meters, eight are in Nepal. Although there is no denying that hiking around the hills is much worth the effort, this we have to confess is not for everyone, due to the physical and time requirements.

Buddha Air’s Everest Experience is meant especially for those who don’t

want to leave Nepal without touching the sacred and majestic Himalaya.

To get the best of the weather conditions mountain flights take place early in the morning. Buddha Air’s Everest Experience is not something you want to miss.

Upon receiving the green signal from the air traffic controller, the commander and co-pilot of the Beechcraft 1900D, the safest plane operating in the domestic sector, start the engines to take you on the ride of your life. The flight heads north east. The emerald green or golden paddy fields below start giving way to green sub alpine forests and then the barren rocks.

The first ones to come to view are the peaks straight north of Kathmandu Valley known as Shisha Pangma which is actually located in Tibet. Then come a series of several smaller peaks beginning with Dorje Lakpa (6966m) located on the eastern edge of Langtang National Park, followed by Phurbi Ghyachu (6637m) on its right, the 5970m Choba Bhamare, Gauri Shankar (7134m) named after Lord Shiva and his consort, Melungtse (7181m) all part of the Rolwaling range.

For most distinguishing one peak from another doesn’t come easy. But Everest is something else.

Known simply as Peak XV until 1856,

MT. EVEREST LHOTSE

the Great Trigonometric Survey of India established the first published the height of Everest. As Nepal and Tibet were both closed to foreigners the British Surveyor General of India at that time named it Everest after Sir George Everest who measured its height and pinpointed its location. The local names of the worlds highest peak though pay tribute to her majesty; the Nepali name Sagarmatha means “mother of the skies” while the Tibetan name Chomolongma means ‘mother of the universe”. In 1999 Everest was found to have grown by at least six inches

since the last survey bringing its total height to 8850m.

Those who trek up to the Everest Base Camp located at height of 5380m may proudly state that they have been there but viewing the Himalaya from onboard a mountain flight is another experience altogether. What would on the ground take days of travel can be easily viewed in a matter of minutes

and from within the safety and comfort of the Beechcraft 1900D. One of the most distinct features perhaps is the receding snowlines and the glaciers, proof of climate change and global warming. As the flight begins to head back to Kathmandu one cannot but help contemplate that we have but one earth and we must all work towards preserving its natural beauty for our children.

We have dedicated our Beechcraft 1900D fleet specially for the Everest Experience flights, therefore we guarantee completion of these flights except if Mt Everest is covered by clouds.

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buddha INITIATIVE

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s a corporate entity committed to serving the needs of society, Buddha Air firmly believes that charity begins at home. The company regularly provides millions in donation to various causes, but this for us is not the end of what many companies define as corporate social responsibility. Our understanding is that for any progressive transformation to be brought about in society there has to be fundamental changes in the economy. Buddha Air believes that corporate houses have a special responsibility in introducing creative innovations to uplift society.

With the growth of the company Buddha Air began identifying sectors where we could make substantial impact and came to the conclusion that for society to progress the rural masses must be taken into consideration.

In 2000 Buddha Air started an agricultural extension program as a pilot project in Morang district. The program was initiated with the objective of helping small scale local farmers gain access to market as well as increase their productivity by introducing innovative technology to them.

With assistance of Buddha Air the farmers were able to

increase their production output by applying appropriate fertilizer management, updated technology and better seeds.

Buddha Air funded the seed money to start Smallholder Agribusiness Support (SABS) in Tankesinwari and Hattimuda VDC of Morang district in east Nepal with the objective of helping to reduce the debt burden of farmers. 14 farmer groups associated with SABS then came together to form the Tankisinwari Agro-commodity Marketing Cooperative Ltd registered under the Cooperative Act of Nepal. The Cooperative provides loans to needy farmers who are members of the cooperative at the start of each plantation season at an interest of 12% per annum, much less than the 60% interest charged by the middlemen. The farmers now have an option of preserving their products with the cooperative and selling it for a profit at the right time which can be several months later. 2005 was the first successful season of product banking for paddy when farmers were able to get twice as much due to the higher yield, savings in interest, and better prices.

However for Buddha Air this was just a small step towards the bigger goal. With the growth of the company

we have accepted our greater responsibility and have begun initiatives that will benefit the more extended communities with its grass root focus. We are proud to state that as part of our measure to give back to society Buddha Air has begun the process of planning to establish the Rural Development Bank that will focus on product banking and be involved in supporting each step of the agriculture extension program.

At Buddha Air we also realize that unless our employees benefit from their services the company itself will not be able to serve the greater purpose. Our employee pay scale is at par and in fact higher than that of most other

corporate houses and government agencies. To enhance employee benefits Buddha Air staff will be provided shares in the conceptualized Rural Development Bank, although a majority of the shares in the bank will remain with the concerned sector of the general public.

Buddha Air reiterates that the company shall remain committed to the growth of the nation and shall continue serving the needs of society through our dedicated and reliable services.

We shall continue to provide necessary interjections in needy sectors and look forward to seeing a prosperous Nepali society.

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We will be adding an ATR 72-500 to further reduce the fares for Nepalese passengers. The ATR 72 is a 68 passenger seater aircraft.

Ten Rupees from every ticket purchased from fiscal year 2009/10 will be contributed to Buddha Air’s Social Initiative.

The total amount is estimated to be Rs 5 Million per annum as the passenger upliftment is expected to be 500,000 at the very conservative estimate. page

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Buddha Air is renewing its Aviation Insurance for the 11th consecutive year in a row with zero claim

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Buddha Air Head Office: P.O.Box 2167. Kathmandu, Nepal, Telephone: 977-1-5521015, Fax: 977-1-5537726, Email: buddhaair@buddhaair.com City Sales Office Hattisar: Telephone: 977-1-4437025, 4437677, Fax: 977-1-4436033