Buddha Air Pvt. Ltd. Company profile for the year 2012

Buddha Air

www.buddhaair.com

COMPANY

PROFILE

c o m pa n y

summary

Buddha’s Conception

The demand for air services in Nepal grew following the restoration of multiparty democracy in 1990. The economic liberalization laid the foundation for new investments resulting in the growth of the service sector and infrastructure development. Amidst this rapidly changing socio-economic condition, former Supreme Court Justice Surendra Bahadur Basnet identified a new opportunity for investment in transportation and subsequently founded Buddha Air in 1997.

Buddha Air Year of Operation

11.10.1997 Executive Chairman

Surendra Bahadur Basnet Managing Director

Birendra Bahadur Basnet Type of Business

International/ Domestic Schedule Flight Operator No. of AircraftS

NINE TypeS of AircraftS

Beech 1900D (3) ATR 42-320 (3) ATR 72-500 (3)

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D E S T I NAT I ON

A I R C RA F T

Kathmandu

Mt. Everest

Pokhara

Biratnagar

Dhangadhi

Nepalgunj

Tumlingtar

Bharatpur

MAP Fishtail & Annapurna

Dhangadhi

Pokhara

Surkhet

January 2013

KATHMANDU

Mt. Everest

Nepalgunj Bhairahawa

Tumlingtar Bharatpur Simara Paro, Bhutan

Janakpur

Chartered Flights

Biratnagar Varanasi, India

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Bhadrapur

Janakpur

Surkhet

January 2013

Beech 1900 D It is on the choice list of the American Aircraft Pilot's Association. Manufactured by the US-based Hawker Beechcraft, this 18-seater is safe, comfortable and reliable. Powered by two powerful Pratt & Whitney PT6A-67D turboprop engines, Beechcraft 1900D is widely accepted as one of the best airplanes of the world.

Bhairahawa

Varanasi, India

ATR-42 Adapting to the rapidly evolving competitive market, Buddha Air bought two ATR 42-320, 47-seater aircrafts under US $ 10 million loan from the International Finance Corporation (IFC), a member of the World Bank Group.

These aircrafts have enabled Buddha Air to issue low-price tickets for Nepali passengers.

Bhadrapur

Paro, Bhutan Chartered Flights

ATR-72 ATR 72, enhanced from ATR 42 to increase the seating capacity from 47 to 72, is widely appreciated as one of the best regional aircrafts of the world. Buddha Air currently has two ATR 72s and is operating one more ATR 72

by September, 2012. Along with safety, the aircraft is popular for its cost-effective operation and environment friendly features.

Simara

s a l es &

m a r k e ti n g

B

uddha Air is the leading airline operator of the country with total market share of 54 percent and is targetting to increae it to 70 percent. Our marketing department with dedicated employees deserves credit for the success.

Total Passengers Comparison 2011-2012 (projected data based on 8.5 months actual data) 800,000 700,000 600,000 500,000 4000,00 300,000 200,000 100,000 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

10/11

11/12

Airlines Market Share Comparison 2011-2012 (projected data based on 8.5 months actual data)

4.93% Guna Air

10.50% Agni Air

30.64%

Yeti Airlines

53.93% Buddha Air

The success of our frequent flyer program is another reason to cherish. The club membership has been a strong medium to directly reach our regular passengers by rewarding them mileage points which can be accumulated for free tickets, holiday packages or even for shopping. We are proud to be the first airline of the country to launch such program.

98,790 Royal Club Gold Card members

6,275 Platinum Members.

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(Buddha Air operated sectors only)

23835

Number of Flights Comparison

23021

22198

23764

22341 21785

21018

21199 19788

2011-2012

(projected data based on 8.5 months actual data) 10674

14433

11210

9476 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

10/11

11/12

We are targetting 70% of total market share in 2012/13

Hangar

O

ur state-of-the-art closed door hangar is in operation since last year.

The world class hangar has helped our Technical and Operations Department for better coordination and communication. A huge amount of Nepali currency has also been saved as we no longer need to go abroad for maintenance.

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Inauguration of the hangar by Former Tourism and Civil Aviation Minister Lokendra Bista Magar.

SAFETY MEASURES

Managing Director Birendra Bahadur Basnet and Chief Executive Officer of ATR Filippo Bagnato signing agreement to purchase third ATR 72-500.

ATION

CIFIC HANGAR SPE

ar expands over an ng ha e th n, io ill m cost of US $ 2.5 re feet. l Built at a 00 squa h area of almost 37,0 a very few in Sout t gs on am d an al ep lity of its kind in N l Only faci Asia.

320 or Boeing 737. us rb Ai e at od m m to acco and base l Capacity , technical stores ps ho ks or w s ha Floor l Ground ce office. an en artment along maint d Operations Dep an l ca ni ch Te es r featur room. l First Floo and central server om ro g tin ee m e meeting a with nteen features on each for ca se ou -h in an ry Floor with d one libra l Second for 45 persons an om ro s as cl a , t. room chnical Departmen Operations and Te

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Buddha Air is Prime Client of International Finance Corporation (IFC) – World Bank Group in Nepal with a total loan portfolio of US$ 16.9 million. The first phase started in September 2008

Exchange of Agreement with Aaron Tang, General Manager of Canada based Pratt & Whitney - engine manufacturer.

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o p e r ati o n Buddha Air is the only private airline in Nepal to send all its ATR & B1900D cockpit crews refresher trainings at dedicated six axis full motion simulators as per CAAN requirements. This cost comes around US$ 600,000 annually as of date.

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

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

Regional Sales Manager Pratt & Whitney Canada

t e ch n ic a l

Safety Measures - IOSA

Technical Department has been audited by Civil Aviation Authority of Nepal (CAAN) with assistance from South Asia Regional Initiative (SARI/COSCAP) representatives for the development of its Exposition Manual and maintenance facility in line with part 145 Maintenance Organization equivalent to European Aviation Safety Agency 145 Maintenance Organization.

Six axis full motion flight simulator training

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Enhancing the measures for flight safety, we are in the final stage for International Air Transport Association (IATA) Operation Safety Audit-IOSA. We have signed the agreement with IOSA auditor ICF SH&E, one of the eight IATA designated auditors. The airline is starting IOSA pre-audit evaluation on July 15, 2012 at a cost of more than US$ 90,0000. With this, Buddha Air will be the first Airline from Nepal to be IOSA compliant.

IOSA has 900 standards to be audited in the operation area which includes: l Corporate Organization and Management l Flight Operations l Operational Control and Flight Dispatch l Aircraft Technical and Maintenance l Cabin Operations l Aircraft Ground Handling l Cargo Operations l Operational Security

We have also started the process of ISO9001 audit and we will be compliant by the end of 2012. Buddha Air will start ISO14001 audit after completing IOSA and ISO9001.

HRD

B

uddha Air is a leading employer in the country with around 650 staff members. Our Human Resource Department plans and manages human resources with equal opportunities without nepotism and favoritism.

Besides, we also invest in the capacity development of the employees, offering them necessary training. HRD plans to set up a separate unit in near future to continuously monitor the performance of employees.

Revenue Corporate Office 18 TIA 2 Finance Corporate Office 10 MIS Engineering 4 Corporate Office 10 Sinamangal 1

Marketing Corporate TIA Cargo Public Relation City Sales Sundhara Sales Jawalakhel Sales Reservation

126

Outstation Varanasi 1

15 pu r

ra ad

Operations Air Crew 62 Cabin Crew 43 Flight Operation 24

6

w

a

12

nj 13

Nepalgu

Bh

678

9

0

ur 1

akp

Jan

Total Staff

Pokhara 14

Outstation Bh ai ra h

Simara 10

Engineering Technical 70 Corporate 38 Stores & Purchase 8

ar 2

tnag

Bira

di

ga

an ur 9

Tum

Dh

lingt ar 6

Surkhet 1

Bharatp

5 87 12 6 13 4 5 19

HRD Human Resource 9 Payroll 2 Security 13

Emergency Response Plan

Buddha Air has an Emergency Response Committee that is automatically activated in case of accidents, curfews, political unrest etc. Now we are in the process of extending the scope of work to include natural disasters like earthquakes etc. and how we can immediately be ready to response, such as emergency upliftment with our fleet of aircrafts etc. Once the procedure is in place Buddha Air will coordinate with governmental and non-governmental organizations for further interface. page

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F I NANC E &

Details of Direct & Indirect Tax

RE V ENUE

W

ith increasing trust of our valued customers, we are enjoying a sustained growth in our revenue.

Established with an initial investment of $ 8 million, the airline now has the assets worth $ 44 million. Our total projected revenue of FY 2011/12 (projected data based on 8.5 months actual data) is Rs. 3,10,37,82,356 compared to Rs. 2,51,70,75,652 in last fiscal year (2010/11). Likewise, our direct tax contribution was Rs. 17,80,63,646 and we paid the indirect tax of Rs. 4,33,16,289 (upto 31 March 2012).

Period from 2005/06 to 2011 / UPTO 31 March 2012

2,50,00,000 Indirect Tax

(CUSTOM, VAT & TDS)

direct Tax

2,00,00,000

14,71,93,838

1,50,00,000

9,56,74,197

1,00,00,000

6,54,55,000

5,79,14,317

4,65,00,000

3,12,10,868

4,33,16,289 2,63,42,963

63,80,445 79,36,608 05-06

06-07

07-08

08-09

REVENUE COMPARISON

(in NPR)

2011-2012 (projected data based on 8.5 months actual data)

3103782356 2192320921 1543255853

07/08

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4,88,98,108

4,04,84,484

5,00,00,000

04-05

12

10,77,37,953

7,95,55,268

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Buddha Air is not simply an employer but also is one of the highest tax payers of the country

17,80,63,646

15,90,41,802

(CORP.)

08/09

2517075652 2017829931

09/10

10/11

11/12

09-10

10-11

11-12

B

C SR uddha Air has always prioritized its corporate social responsibility. We have been donating over Rs 1.5 million to Dangihat VDC of Morang district every year.

Under the first phase, five schools and a police station were supported with assistance for infrastructure development in Dangihat. The activities included establishment of libraries, science labs and construction of boundary walls, gates apart from purchasing land for school. Similarly under the second phase, 17 toilets were constructed for the local community. Our future CSR plan is to support mechanisation of farming in Sunsari, Morang & Jhapa districts of Nepal.

Future plan Future plan

n The airline has consolidated expansion on the pressurized turboprop requirement of

Nepal and will now focus on enhancement for the next couple of years, that will help in establishing a complete Quality Management Systems (QMS).

n The core focus of Buddha Air is to provide the best service and generate profit for the

company and its employees.

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EVEREST

E X PER I EN C E

W

e offer the best mountain flight with the close-up views of nine majestic peaks of the world, flying at an altitude of around 7,500 to 8,500 meter.

After a few minutes of take off from Kathmandu, the breath-taking panorama of the snow-clad Himalayan range, which the locals say is the sacred abode of gods, is 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 25,000 feet with Himalayan range at your side, you will earn the moment to treasure forever. We have flown 4,76,982 passengers in the last 15 years. Flights are so satisfying that one of our passengers commented: “I did not climb Mt Everest, but I touched it with my heart�.

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I did not climb Mt Everest, but I touched it with my heart A mountain flight passenger page

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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, Kathmandu, Telephone: 977-1-4437025, 4437677, Fax: 977-1-4436033