Buddha Airw w w . b u d d h a a i r . c o m

PROFILECOMPANY

The demand for air services in Nepal grew following the restoration of multi-party 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/ DomesticSchedule flight operator

no. of AircrAftS

nine

tYpeS of AircrAftS

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

Buddha’s Conception

co m pa n y

3page

s u m m a ry

4page

ATR-72ATR 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.

Beech 1900 DIt 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.

ATR-42Adapting 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.

Dhangadhi

Nepalgunj

BhairahawaBharatpur

SimaraJanakpur

Biratnagar Bhadrapur

Tumlingtar

Mt. EverestKATHMANDU

PokharaSurkhetJanuary 2013

Paro, Bhutan

Varanasi, India

MAP

Fishtail & Annapurna

Chartered Flights

D ES T I n aT I o na I rC r a F T

Kathmandu PokharaMt. Everest Biratnagar BhairahawaJanakpur SimaraBhadrapur

Dhangadhi TumlingtarNepalgunj Bharatpur SurkhetJanuary 2013

Varanasi, India Paro, BhutanChartered Flights

Sa l ES &m a r k e T I n g

Airlines Market Share Comparison2011-2012 (projected data based on 8.5 months actual data)

Buddha 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.

53.93%Buddha Air 30.64%

Yeti Airlines

10.50%Agni Air

4.93%Guna Air

(Buddha Air operated sectors only)

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.

98,790RoyAl Club Gold

CARd MeMbeRs

6,275PlAtinuM MeMbeRs.

Number of Flights Comparison2011-2012(projected data based on 8.5 months actual data) 14433

21018

23764

3916

7582

22198

9476

2302123835

10674

21199

19788

11210

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

2234121785

11/12Total Passengers Comparison2011-2012 (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

000/0199/00 01/02 03/0402/03 04/05 06/0705/06 07/08 09/1008/0998/9997/98 10/11

We are targetting

70% of total market share

in 2012/13

6page

11/12

Our 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.

Sa F E T y m Ea S U R ES

11page

H a n g a r

Managing Director Birendra Bahadur Basnet and Chief Executive Officer of ATR Filippo Bagnato signing agreement to purchase third ATR 72-500. Exchange of Agreement with Aaron Tang,

General Manager of Canada based Pratt & Whitney - engine manufacturer.

HANGAR SPECIFICATION

l Built at a cost of US $ 2.5 million, the hangar expands over an

area of almost 37,000 square feet.

l Only facility of its kind in Nepal and amongst a very few in South

Asia.

l Capacity to accommodate Airbus 320 or Boeing 737.

l Ground Floor has workshops, technical stores and base

maintenance office.

l First Floor features Technical and Operations Department along

with a meeting room and central server room.

l Second Floor with an in-house canteen features one m

eeting

room, a class room for 45 persons and one library each for

Operations and Technical Department.

8page

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

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

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’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 VenuRegional Sales ManagerPratt & Whitney Canada

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 EstablieSales Director, ATR Company

Buddha 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.

o p e r aT I o n

SAfeTy MeASuReS - IOSA

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:

lCorporate Organization and ManagementlFlight OperationslOperational Control and Flight DispatchlAircraft Technical and MaintenancelCabin OperationslAircraft Ground HandlinglCargo OperationslOperational 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.

H r D

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T eC H n I C a l

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 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.

e m e rg e n C y r es p o n s e p l a n

Total Staff

678

FinanceCorporate Office 10Engineering 4

RevenueCorporate Office 18TIA 2

MISCorporate Office 10Sinamangal 1

HRDHuman Resource 9Payroll 2Security 13

EngineeringTechnical 70Corporate 38Stores & Purchase 8

OperationsAir Crew 62Cabin Crew 43Flight Operation 24

MarketingCorporate 5TIA 87Cargo 12Public Relation 6City Sales 13Sundhara Sales 4Jawalakhel Sales 5Reservation 19

Outstation 126

Biratnagar 26

Pokhara 14Bhairahwa 12

Nepalgunj 13

Bhadra

pur 15

Janakpur 10

Simara 10

Bharatpur 9

Dhangadi 9

Surkhet 1

Tum

lingt

ar 6

Varanasi 1

OuTSTATION

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.

INDIRECT TAx(CUSTOM, VAT & TDS)

DIRECT TAx(CORP.)

2,63,42,963

3,12,10,868

4,04,84,484

79,36,608

04-05 05-06 06-07 07-08 08-09 09-10 10-11

Details of Direct & inDirect taxPeriod from 2005/06 to 2011 / UPto 31 March 2012

63,80,445

4,88,98,108 4,65,00,000

5,79,14,317 6,54,55,000

7,95,55,268

9,56,74,197 10,77,37,953

15,90,41,802

14,71,93,838

5,00,00,000

2,50,00,000

2,00,00,000

1,50,00,000

1,00,00,000

0

11-12

4,33,16,289

17,80,63,646With 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).

C s r

Buddha Air is not simply an employer but also is one of

the highest tax payers of the

country

F I n a n c E & r e V e n u e

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F u T u r e p l a nF u T u r e p l a n

Buddha 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.

reVenUe coMParison2011-2012 (projected data based on 8.5 months actual data)

1543255853

21923209212017829931

2517075652

3103782356

07/08 08/09 09/10

(in nPr)

10/11 11/12

E V E R ES Te X p e r I e n C e

We 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”.

I did not climb Mt

Everest, but I touched it

with my heart

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A MOUNTAIN FLIGHT PASSENGER

Head Office: P.O.Box 2167, Kathmandu, Nepal, Telephone: 977-1-5521015, Fax: 977-1-5537726 Email: buddhaair@buddhaair.comCity Sales Office Hattisar, Kathmandu, Telephone: 977-1-4437025, 4437677, Fax: 977-1-4436033

Buddha Air