REPUBLICA

KATHMANDU, Jan 8: Gulf Air, the national carrier of Bahrain, is terminating all flights to Kathmandu effective from March 25 citing “commercial reasons”. The airlines is also cutting down its flights from 14 to five a week effective from Friday, prior to permanently shutting down its Kathmandu operations.

The announcement comes a month after the airlines announced termination of Copenhagen and Rome routes.

The airlines, which flies to 41 destinations in 30 countries across Africa, Asia and Europe, is also shutting down Colombo and Dhaka operations from February 11 and March 4, respectively.

A Gulf Air statement posted on its website stated it was terminating flights to Kathmandu for commercial reasons and the last date of operation from Bahrain to Kathmandu was March 24.

“Gulf Air recognizes the inconvenience this may cause and apologizes to passengers affected by the closure,” the statement added.

The airlines is downsizing its operation, as a part of its restructuring plan and to reduce losses. Bahrain-based Gulf Daily Newspaper stated that the airlines was prepared to reduce its losses from Bahrain Dinar 95 million to 58 million a year by 2017.

President Travel, General Sales Agent of Gulf Air for Nepal, however, said flights to Kathmandu were terminated because of high ground handling charge and double taxation.

Siddhartha Bikram Thapa, operation director of President Group of Companies, said a request was made to Nepal Airlines Corporation to reduce the ground handling charge.

“The air traffic growth between Bahrain and Kathamndu is good and the airlines is ready to resume operation on condition the ground handling charges go down,” Thapa said.

Even though Valued Added Tax (VAT) Act provisions VAT exemption on air transportation services, Inland Revenue Department has been collecting 13 percent VAT from international airline companies for the last one year. Foreign airlines operating flights to Nepal have long been requesting the government to waive VAT on ground handling services, but the call has not been heeded so far.