Buddha Air Pvt. Ltd. Company profile for the year 2010

2010 COMPANY PROFILE 2 0 1 0

ATR-72-500

BEECH 1900 D

ATR-42-320

Buddha Air www.buddhaair.com

Since 1997 With the reinstatement of multi-party democracy in Nepal in 1990 and the subsequent liberalization of the economy, the private sector was encouraged to invest in public infrastructure and services.

Against this backdrop, retired Supreme Court (SC) justice Surendra Bahadur Basnet realized the need and growing demand for mass public transport in Nepal.

And the result is Buddha

Air Pvt. Ltd. The airline, established in October 1997 with the objective of giving people a safe and reliable air transport service and went on evolving in the subsequent years. Now it is the leading airline in the country. From the very beginning passenger safety was placed in the highest priority. This core value has helped Buddha Air earn the trust of millions who have flown with it.

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

International/ Domestic Flight Operator No. of Aircraft

Eight

Type of Aircraft

Pressurized Beech 1900D (4) ATR 42-320 (3) ATR 72-500 (1) No. of International Sector Destinations

1. Kathmandu 2. Bhutan - Paro (from 23 August 2010) 3. India (from 16 September 2010)

a. Kolkata

b. Lucknow

c. Patna No. of domestiC Sector Destinations

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1. Kathmandu 2. Everest Experience 3. Bhadrapur 4. Bhairahawa 5. Biratnagar 6. Pokhara 7. Nepalgunj 8. Janakpur 9. Simara 10. Bharatpur 11. Dhangadhi 12. Tumlingtar (after the runway is asphalted)

AIRCRAFTS

ATR-72 ATR 72 was developed from ATR 42 in order to increase the seating capacity from 47 to 72. With the addition of the ATR 72, Buddha Air has now four ATRs including three ATR 42 and four 1900D Beechcrafts in its fleet.

Buddha Air is very proud of the fact that the ATR Company leased out ATR 72 to the airline. It is due mainly to the impeccable image of Buddha Air and the vision of its management to drive the airline business on the right track. It must be recalled that Nepali airlines had already lost their credibility with the ATR Company, but Buddha Air’s track record and vision won the confidence of the aircraft manufacturer.

If things go as planned, Buddha Air will import two ATR-72 aircrafts, by the end of 2011.

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ATR 42

Buddha Air entered service in 1997 with one Beechcraft 1900D, and now it has four such airplanes, among others. It is the latest version of the world famous Beechcraft 1900 series, and over 400 such planes are currently in operation worldwide. It is also a choice of the American Aircraft Pilot’s Association.

Manufactured by the USbased Raytheon Aircraft Company (now Hawker Beechcraft), the 18-seater aircraft is safe, comfortable and reliable. Powered by two Pratt & Whitney PT6A67D turboprop engines, Beechcraft 1900D is regarded as one of the best airplanes of the world.

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Beech 1900 D

In a strategic move to adapt in the face of a rapidly evolving competitive landscape, Buddha Air bought two ATR 42-320 aircrafts with USD 10 million loan from the International Finance Corporation (IFC), a member of the World Bank Group. The airline started operating these 47-seater aircrafts from September, 2008 with a remarkable success and added another such aircraft within a year. The twinturboprop aircraft, built in France and Italy by ATR Company, is safe, comfortable, and environmentfriendly. The ATR Company began manufacturing ATR 42s in 1985, and well over 900 such planes are currently in service with more than 65 airlines worldwide. The lowoperating cost of these aircrafts has enabled Buddha Air to issue the low cost B-class air tickets for Nepali passengers.

marketing

B

uddha Air is the fastest evolving airline in Nepal. It is the leading airline in domestic civil aviation and conducts the best Mt Everest sight-seeing flights. Making headway through the cutthroat competition of Nepal’s civil aviation sector would have been impossible

without the dedicated employees of the Marketing Department. The department ensures that passengers get the best services possible and frequently interacts with tour and travel operators to enhance the services. It is also equally concerned with making travels safe, reliable and comfortable.

Our in-house trimester publication Buddha Yatra is in its fourth year with 15,000 copies of every issue being distributed around. Yatra also contains a feedback questionnaire, and passenger feedback is promptly acted upon.

Airlines Market Share Comparison

6.28% 13.02%

Guna Air

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

Agni Air

43.74%

Buddha Air Yeti Air

36.95%

2009-2010

Agni Air

Yeti Air

(only Buddha Air

Guna Air

operating sector)

Number of Flights Comparison (1997-2010) 23835 19788

23021

21199

23764

22198

21018

14433

9476

11210

10674

7582 3916 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10

Total Passenger Comparison (1997-2010) 600,000 500,000 4000,00 300,000 200,000 100,000

97/98

98/99

99/00

00/01

01/02

02/03

03/04

04/05

05/06

06/07

07/08

08/09

09/10

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E-ticketing In a move to catch up with the pace of time, Buddha Air has begun issuing e-tickets to Nepali passengers. It is through F1 Soft International’s website e-sewa that you can buy e-tickets. F1 Soft International transfers the money you have paid to buy your tickets to Buddha Air. This new service has made the purchasing of tickets easier for our tech-savvy customers. Now travel agencies are also able to issue tickets online as per their agreement with Buddha Air. Similarly, General Sales Agent will be handling the selling of tickets in Bhutan and various Indian cities.

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Royal Club In 2002, Buddha air launched its frequent flyer program, the Royal Club, which rewards passengers with mileage points every time they fly. When accumulated, these points can be redeemed for free tickets, holiday packages or shopping. We are the first to introduce this program in the country. We launched the Platinum Membership Program in 2005. This special group receives more benefits than the ordinary members do. We are proud to have 77,000 Royal Club gold card members and 4,250 Platinum members.

We run the largest frequent flyer program in the country. In August 2007 we launched the part-milesplus-part-cash scheme for our valued members; it offers more flexibility in payment by allowing members to redeem their reward by paying cash in part.

77,000 Royal Club Gold Card members

4,250 Platinum Members.

engineering

O

ur Engineering Department is one of the largest in the country with 16 engineers, 29 technicians, and 36 corporate staffs.

The Engineering Department, which is the backbone of the company, is entrusted with the task of maintaining each aircraft in an airworthy condition. All engineers are provided periodic refresher training by aircraft manufacturers. For assured effectiveness,

the department is subdivided into Maintenance, Maintenance Planning, Workshop, Quality Assurance, Technical Records, Library, and Procurement and Stores. Besides we also have a very good storage of spare parts. Officials from The CAAN, Hawker Beechcraft, Pratt and Whitney Canada, COSCAP and ATR frequently visit the department to ensure that all is well.

Buddha Air’s ATR and Beech aircraft are powered by Pratt & Whitney Canada engines. Under our supervision, they have an impeccable maintenance and safety record, not only in Nepal but across the South Asia region. n Mr. Vellu Venu

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Regional Sales Manager Pratt & Whitney Canada

OPERATION uddha Air began with one 1900D Beechcraft, six commanders and six copilots operating flights in five destinations in Nepal. Today it has evolved into the leading airline in the country. The Airline has now 100 employees in its Operation Department, thus eliminating hectic schedules of pilots and technicians, which is one of the major causes of accidents all over the world.

All commanders have logged in at least 3000 flight hours in the Beechcrafts and

over 10,000 hours in total. The airline also sends its pilots and technicians abroad for various types of refresher training in aircraft designated six axis simulators. Pilots flying Beechcrafts are sent to New York every year for weeklong flight simulation refresher training, while those flying ATRs are sent to Malaysia and Bangkok every six months for the same. Similarly, dispatchers are also sent to Bangkok every year for a 10-day-long training to renew their licenses.

Buddha Air has been classified as a very safe operator and we have provided the ATR-72 on lease purchase option. This is a very rare opportunity given only to highly rated operators who have structured and periodic audit, engineering and operations management monitored by us. n Mr.

Jean-Luc Establie

Sales Director, ATR Company

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safety measures

B

uddha Air places its highest priority on the safety of its flights and that’s the reason why we have no record of aviation insurance claim since the airline was launched in 1997.

To keep the flights safe, our engineers inspect each aircraft thoroughly everyday as per the Standard Operating Procedure, Nepalese Civil Airworthiness Requirement and the Aircraft Operators Maintenance Manuals.

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 Cockpit Voice Recorder (CVR) and the Flight Data Recorder (FDR).

ADAS provides an early warning if the aircraft is in danger. The FDR records conditions of the flight. The device records each and every action conducted in the aircraft. The data are also sent to the Pratt and Whitney, Canada for analyses. We have a good storage of spare parts and our well-trained technicians conduct the maintenance work.

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As flight safety is our top priority, pilots and engineers are frequently sent abroad for refreshertraining page

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A proposed design of Buddha Air Hangar

hanGaR

I

n yet another significant move, Buddha Air is constructing its own hangar within the premises of Tribhuvan International Airport, which covers over 25,000 sq ft, will be constructed with the state-of-art technology. The closed door hangar, which is of international standard, is very important from the point of

view of aircraft safety. The shifting of the operation department within the area will enhance better coordination among the departments. Now all the maintenance works will be done during night time. This will increase the utilization of each aircraft by 15 days every year. In total, the hangar will enhance the utilization of Buddha Air's aircrafts by more than 100 days. The total construction cost of the hangar is Rs 10 million.

Hangar will increase the utilizationofeach aircraftby15days every year page

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internationalfligHts

I

t is a great leap forward.

Buddha Air is poised to launch flights from Nepal to seven Indian cities and Paro of Bhutan. Under the first phase of our program, we will operate to four international destinations including Paro of Bhutan and Lucknow, Kolkatta, and Patna of India by 2010.

Under the second phase, we will begin flights to Indian cities of

Banaras, Guwahati, Dehradun and Delhi by the end of 2011.

Commercial flights to Indian cities are likely to begin from September and to Bhutan from August-end. The international flights are sure to bring in more tourists to Nepal and greatly contribute to turn the Visit Nepal 2011 into a grand success.

human resource

B

uddha Air is one of the top employers in the country with more than 550 staff members.

So the primary objective of the Human Resource Department (HRD) is to plan and manage human

resources with equal opportunities and without nepotism. It ensures their regular attendance, works for capacity development, and motivates them to work hard for the betterment of the organization.

Staff Strength S. No.

Department/Division

Total

Executive

Manager

Officer

Supporting

Attendant

Finance

-

3

2

8

-

13

Revenue

-

4

5

11

-

20

2

MIS

-

3

1

8

-

12

3

HRD

-

1

4

4

10

19

Technical

4

12

11

31

-

58

Corporate

1

-

2

4

23

30

Stores & purchase

1

1

2

3

1

8

Air Crew

3

18

22

-

-

43

Cabin Crew

-

1

2

28

-

31

Flight Operation

1

1

4

9

3

18

Corporate

-

1

5

1

-

7

Airport

-

2

5

30

34

71

Cargo & PR

-

-

1

10

7

18

City Sales

-

1

4

6

1

12

Sundhara

-

-

3

1

4

Jawalakhel

-

-

1

3

-

4

Reservations

-

1

3

14

-

18

Biratnagar

-

1

1

11

11

24

Pokhara

-

1

2

3

7

13

Bhairahawa

-

1

2

2

7

12

Nepalgunj

-

-

1

4

5

10

Bhadrapur

-

1

1

4

7

13

Janakpur

-

-

1

4

5

10

Simara

-

-

1

4

5

10

Bharatpur

-

-

1

3

4

8

Dhangadhi

-

-

1

3

4

8

G.S.D

-

-

3

1

5

9

Transport

-

-

1

3

39

43

Catering

-

-

1

3

4

10

53

216

182

550

1

4

5

6

7

Engineering

Operations

Marketing

General Service

Total >>

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BAND

89

In 2004, Buddha Air introduced Staff Performance Management System (SPMS) to manage human resources in a productive manner. We also send our management level staff members to Kathmandu University (KU) for professional and academic courses to enhance their working performances.

Currently nine of our employees are receiving 14-week Diploma in Management (DipM) courses. The department is also planning to set up a separate unit to continuously monitor the performance of the employees.

Primaryobjectiveof theHumanResource Department(HRD)is toplanandmanage humanresourceswith equalopportunities andwithoutnepotism

finance & Revenue

T

he Finance Department at Buddha Air has come a long way developing and implementing financial policies, strategies, plans and programs, preparing annual budgets, monitoring, analyzing and reporting financial status and information.

We have a separate department to collect revenues.

Starting with an initial investment of around USD eight million which the company paid off in six years, Buddha Air today is worth over USD 10 million.

Since its inception in 1997, Buddha Air has enjoyed a healthy net profit.

Buddha Air’s professional and transparent financial system enabled it to receive loan from the International Finance Corporation, a wing of the World Bank Group, for the purchase of two ATR 42320 aircrafts.

REVENUE COMPARISON Period from 1997/98 to 2009/10 2000000000 1600000000

Details of Direct & Indirect Tax

1200000000

Period from 2005/06 to 2009/10

147,193,838

800000000 400000000

107,737,953 79,555,268

95,674,197

Indirect Tax

(CUSTOM, VAT & TDS)

direct Tax (CORP.)

40,484,484

48,898,108 31,210,868 26,342,963

7,936,608 05/06

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06/07

07/08

08/09

09/09

(provisional)

0

97-98 98-99 99-00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10

Management information system (MIS)

B

uddha Air has developed its Management Information System (MIS) for collecting, organizing, analyzing and disseminating information for the planning of its business operations. The whole effort of the MIS is concentrated on achieving the goals set by the management.

It is not an easy task given the status of information technology in our country and the requirement of investment and above all the lack of qualified manpower.

Overcoming these hurdles, Buddha Air’s MIS has been successful in creating a very sound and transparent system.

Buddha Initiatives

B

uddha Air is very concerned about its corporate social responsibility (CSR) and has been conducting various programs for the welfare of local communities for the last few years. An approach for CSR that is becoming more widely accepted is communitybased development in which corporations work with local communities to better themselves. In its new program, Buddha Air has decided to

donate over Rs 1.5 million to Dangihat VDC of Morang district every year for health and education from 2010. On April 24, a 40-member medical team, financed by Buddha air, conducted a one-day health camp in the VDC and distributed medicines. Some 1,200 locals benefitted from the health camp, which cost over five hundred thousand rupees.

everest experience

B

uddha Air offers you the best mountain flight service of the world. Within minutes you take off from Kathmandu Airport, the snow-clad Himalayas, which the locals regard as the sacred abodes of gods, are just outside your window. Wait a few minutes more and you will see Mt. Everest, the highest peak of the world.

Flying at the altitudes of approximately 7,500 to 8,500 meters, passengers get closeup views of the Himalayas. Our Everest

sight-seeing flight gives you the joys of flying past nine majestic peaks of the world and that will be the joy to be cherished forever. Having flown around 400,000 passengers to the Himalayas for the last 12 years, we can safely say we operate the best mountain flight in the world. Flights so satisfying that one of our passengers commented: “I did not climb Mt Everest but I touched it with my heart.�

TouchMtEverest with your heart

UNION

For the first time since its inception, Buddha Airline has now an elected body of the Independent Workers’ Union. The management has regarded the union as an integral part of the airline and congratulated the newly elected union body. The union actively bargained with the management while taking the recent decision to hike the salary of the employees by 25 to 30 percent. union officials

President :

Senior Vice-President :

Vice-President :

General Secretary :

Ram Prasad Bhusal Babita Manandhar Chhapanna Lal Rajbhansi Prakash Kayastha

Secretary :

Kamal Raj Lamichhane

Treasurer :

Ramesh Prasad Ghimire Members Binita Thapa Baital Bhagat Tharu Saroj Dutta Pandey

Bhakta Bahadur Basnet Dipesh K.C Pankaj K.C page

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Ranjana Bhandari

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