Interview with Sugat Ratna Kansakar, M.D, Nepal Air Corporation

Q.No.1 What is Management according to you?

Answer: There are two aspects in Management. First is Management and the second is Leadership. When you reach higher posts like departmental chief, section chief, or even Chief Executive Officer, leadership becomes more important. The higher you go in posts, leadership aspects become more necessary than the managerial aspects. I think, in Nepal, people have the wrong notion that leadership and management are one and the same, which is absolutely wrong.

Q.No.2 Is there any difference between management we learn in our syllabus and in the real world?

Answer: Theoretical knowledge is always important. The application of those theories in practical life is the real challenge. The practice becomes difficult if you have poor theoretical knowledge in the field. So, you have to read books to understand all the technicalities and principles of management. In universities like Oxford and Harvard, the researches on the techniques of management are still ongoing. The researchers believe that there is still space for improvement in the field of management. Even though some theories or principles are developed from practice, most of the researches are theoretical instead of practical. Thus, there could be some gaps in theory and practice. But, the theoretical aspect provides the guideline for practice. The actual implementation of those theories in real life is the biggest challenge.

Q.No.3 NAC is the first and leading airlines of Nepal. How do you look at the growth of NAC over the years?

Answer: Right now, the total business volume of aviation within Nepal originating from the sole international airport, i.e. the Tribhuvan International Airport, is around Rs.100 billion. Out of that, Nepal Airlines' share just rounds up to 10%. And, 90% of that business volume is still with the foreign airlines. So, the scope for expansion of Nepal Airlines is tremendous. Our main focus for now is to increase the gross revenue. All the changes and improvements in management will be fruitless unless we increase our gross revenue. To be able to increase gross revenue, we have to be able to increase the sales volume. But we don’t have the product or the service, in our case, to sell. In order to increase the sales volume, we need to keep adding the number of aircrafts.

Q.No.4 NAC has been constantly criticized on various grounds. Where do you think the things go wrong?

Answer: In my view, there are two reasons behind this. The first is that the management of NAC is not perfect. There are certain weaknesses, especially in the public relation part. And, the second reason is the fact that all over the world aviation sector is considered as the second most glamorous industry after cinema. And, glamour is always followed by controversies and too much of media pressure. There are problems in other public companies as well. But the complaints are rarely heard. But, in our industry, we even get criticized that our hostesses are not smiling properly. We get media coverage for such issues as well. That is the reason we are always in the news. And, that has led the general people to think if Nepal Airlines is the worst there is. But, we are also doing equally well.

Q.No.5 What were the challenges/hardships NAC was facing when you joined NAC as MD, and how did you overcome/tackle it?

Answer: I didn’t focus much on the management side. I gave less priority to the management side and more priority to the leadership side to motivate my 1400 staff, to motivate my directors, and to motivate my DMD. Back then, many believed that it would be better not to buy anymore aircrafts as it would mean problems from the anti-corruption agencies and others as well. So, back then, the biggest challenge for me was convincing them that we have to increase gross revenue. And, in order to increase the gross revenue, we should have more products to sell. And, to increase that, we need to buy aircrafts. Finally, I was able to convince them, and we can now actually see some positive results.

Q.No.6 Time and again, we get news of plane and helicopter crash in various parts of Nepal. What do you think are the reasons behind this? What measures should be adopted to avoid and reduce this?

Answer: Nepal has the most difficult land structure in the world with all the hills and mountains. That makes aviation automatically dangerous in Nepal. We cannot do anything about the land structure. The only thing we can do is to improve the pilots’ skills, and also improve the safety skills and technology. And in that matter, we can proudly say that Nepal has some of the most skilled pilots in the world.

Q.No.7 At the time of such competition, what is NAC’s position in reference with other airlines, and what competitive weapons NAC possesses to stand out in the market?

Answer: One of the major weapons is the branding of NAC. Our branding is considered to be one of the best in South Asia. Along with that, we, being 100% government office, have earned the goodwill and customer faith, i.e. at the end of the day, NAC will not cheat the passengers on air fare and safety. Safety is related with the lives of the passengers. Safety is the most important factor in the aviation industry. Profit is not the major motive of NAC. We are not after profit, but are here to provide services to all 30 million owners of NAC.

Q.No.8 Many private airlines are growing in Nepal. What do you think about the prospects for the new airlines in the aviation industry, or is the aviation market saturated?

Answer: With open sky policy the only constraint is going to be the congestion in TIA which will ease by 30% after the establishment of Pokhara and Bhairawa Airports. So, after 2 or 3 years, new airline companies may come up. And, due to the technology and competition, and also the gradual growth in per capita income, the prospects of investment in airline industry are sure to rise. In the past years, air travel used to be a luxury. But, the customers are increasing as air travel is a lot time-saving. Thus, the prospects are pretty big, and the biggest aviation growth is still to happen.

Q.No.9 How is NAC going to transform its management in light of all expansions and its history of severe mismanagement and government interference?

Answer:  My view, in this regard, is quite different. I don’t think I have ever faced any kind of government interference. A minister or a prime minister suggesting me something can’t be taken as interference. I have never seen a minster who instructs you to go slow on the project, and tell you not to do good things, not to increase profit, and not to increase the gross revenue. It is the job of project director, the CEO, and the bureaucrats that we move fast. I have never met a minister who has ever told me not to buy an aircraft, or not to go for swift improvement, or something like that. So, I think, political interference is only an excuse for non-performance.

Q.No.10 What are your views regarding the privatization of public companies? Do you think it will give a productive virtue?

Answer: The debate of privatization has been going on for more than 30 years now, especially in developing countries. But in Nepal, it never actually happened. And, privatization is not the only solution. Privatization has both pros and cons. If the GON is actually bold enough to do real privatization, at least 51% shares should be handed to the private sector. However, in the sector like aviation, no business house is equipped to buy even 10-15% shares of Nepal Airlines, which may mean we might have to depend on foreign airlines, which is out of context. My views on this is not to debate, but face the reality and move forward to catch up with the competitors.

Q.No.11 Where can we see NAC in 10 years?

Answer: We are going with the view of buying 1 aircraft per year. So, in 10 years we will probably have 10-15 aircrafts. After the period of 10 years, we should be able to have direct flight to New-York, Sydney and other European countries. This will put a great impact on economy as the direct flights will import the money directly to our country.

Q.No.11 What are the issues of Nepalese bureaucracy?

Answer: Problem is not with the Nepalese bureaucracy, but the procedures inside it- laws, rules, and regulations need to be changed drastically. This “tippani” culture needs to be abolished and the processes should be shortened. We need to start enjoying action rather than the process. The top governance needs to be responsible, and should address the issues of why we are not growing in double digit like other countries.                       

Q.No.12 Do you have any suggestion on how our civil service can be improved and how you would implement them?

Answer: Currently, people are only talking about the problems/symptoms. Everybody is talking about the micro-issues while nobody has analyzed the problem. In my opinion, the government of our country should perform some sort of root cause analysis. Actions should be taken to change the present law drastically and rewrite every act, rules and regulations. We need to be action-oriented, and focus on increasing the growth rate and creating jobs in the country.

Q.No.13 Your message to the youth?

Answer: Firstly, the mindset of “Nepal ma estai hunxa” should be totally changed. And you should be more optimistic as there are lots of scopes in Nepal, and the opportunities are ever growing.



Interviewers: Sujan Shrestha, Yogesh Ghimire, Saurav Raj Manandhar and Kishore Khadka.

Writers: Trisha Dali, Femona Shrestha, Kajal Jha, Prasansha Bariya and Manju Bajracharya

Editor: Pratibha Rimal

Editor-in-Chief: Edna Shrestha

Note: This interview originally appeared in the print magazine, Management Vision-an opinion based magazine of business and entrepreneurship prepared by the BBA students of People’s Campus.