Nepali Entrepreneur Birendra Basnet from Buddha Air reveals his story

Originally posted in the discussion thread here in Entrepreneurs for Nepal forumsJoin its free group here in Facebook!

Here is a short transcript of the interaction with Birendra Bahadur Basnet, Managing Director of the very successful, and the one of the most reliable Airline in Nepal,  Buddha Air. This happened on 25th November, 2010 as part of the Last Thursdays event co-organized by “Entrepreneurs for Nepal.”

My family background is basically in agriculture and in that respect, I am a first generation entrepreneur (outside of agriculture). The reason behind opening Buddha Air was the creation of wealth. Fourteen years ago, when we were establishing Buddha Air, we didn’t have any equity and hence we started with debt finance. Looking back, the determination that we had fourteen years ago, was the key for the establishment of Buddha Air. Being a middle class family, opening up an airline company was a joke for everybody else. Even our own family made fun of us. They mocked, We didn’t have five thousand rupees in our pocket but we were forwarding a project worth three hundred million rupees. There were many factors which made it possible though, especially our strategic planning and action for the company. Some major values Buddha Air represents is diligence, integrity and honesty. We have been practicing these three values very seriously.


Another important thing we do is respecting and facilitating our staff. We have around six hundred staff and they are our major strength. If we do not help our staff and respect our team members, we cannot be profitable. There is a union in Buddha Air but it is not political. Though the union is there, we are free to take actions in the matters of human resource management and we can even fire the workers in necessary conditions. The union understands that if any of the staff makes a mistake, it will hamper the entire team. Another important thing is we have a transparent account and we pay all the taxes. Let me also tell you that I don’t know anyone from the tax office and this kind of transparency is highly valued by our staff. Let me share with you a situation, during one of our lowest time. In 2001, the aviation industry wasn’t doing great. There was an extremely unhealthy competition in aviation sector and to make matter worse, we were in dire financial state. We then called all our staff together and decided to cut thirty percent of our salaries, just so we can sustain the company. Understanding the situation, everyone was ready to cut down on their salaries. In the end, we didn’t have to cut the salary but the incident demonstrated our ability to handle even that type of situation. In the other hand, we have been able to prove our profits as well and have provided bonus to all our staff members.


Institutionally, the organization has grown immensely and now we also have an institutional fund. However, one of my proud moments was that when the government called me to pay 10% of all my income so far in the voluntary disclosure of income source (VDIS). Due to the transparency we maintained, I was able to reply saying if they wanted 10%, they would have to return 15% of the 25% of our income we have already paid for all those years as taxes. The main importance of transparency accountancy is that we can diversify from the legal savings we have made which is also one of our greatest achievements In my view, one of our major strength is that we focused in only one business. Organizations like IFC and World Bank has told us in 2009 that there are only five airlines companies in the world that have generated net profit and one of them is Buddha Air. And the main reason behind it is core competency. It’s been fourteen years and yet we are only focused in one part of the sector. We have also always focused on the good governance that is required in any organization. There is a huge cash flow generated in the aviation industry and now the turnover of domestic aviation industry is around six billion. Hence there are various tempting opportunities to diversify the work but we would not want to drift from our core competencies. Strategic decisions of Buddha Air are first our total focus was on our loan reduction and exposure reduction. We have paid billions of rupees of loan and what it does is that it creates a track record. We can always ask for the pre-paid loan. Every entrepreneur should be very critical about the loan and loan reduction is one of the major factors. Secondly, we never compromise on quality or safety. Every year we spend hundreds of millions of rupees to train our staff. Our pilots go to America, Bangkok etc. for simulations and our engineers go for training every year. We have a huge amount of spare parts and we have not compromised a bit in training our staff. Besides this, it is also important for the staff to feel the sense of belongings.


Buddha Air is the property of more than five hundred staff member. Another strategy is we generally try to figure out the anticipated problem and we try to list out the solution before the problem occurs. Finally, what we pay attention to is innovation. We do not follow others because if we had followed others, Buddha Air wouldn’t have existed in the first place.

More Questions & Answers with Birendra Basnet here!

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