NAC decides to bring remaining Chinese aircraft

Published On: November 16, 2016 01:10 AM NPT By: Susheel Bhattarai  | @sushbhattarai

Two aircraft coming in three months
KATHMANDU, Nov 16: Nepal Airlines Corporation (NAC) has decided to bring the remaining four aircraft from China even though it is incurring huge loss from the two Chinese aircraft in its fleet.

The national flag carrier took the decision to this effect on the direction of the Ministry of Culture Tourism and Civil Aviation. It plans to bring two aircraft - one Modern Ark MA 60 and one Harbin Y-12E, in the first phase. MA 60 is a 56-seater aircraft, while Y-12E can fly 18 people.

A highly placed source at the NAC told Republica that they had no option but to bring the Chinese aircraft.

NAC decided to bring two aircraft immediately as it has the required manpower to operate these aircraft. “We will bring the two remaining aircraft after arranging required number of pilots and engineers,” the source added.

Nepal and China had sign a loan and grant agreement to bring six aircraft - two MA 60s and four Y-12E aircraft - in November 13. As per the agreement, China gave Rs 2.94 billion in grants and Rs 3.72 billion in soft loans to purchase six aircraft. The interest rate for soft loan has been fixed at 1.5 percent.

NAC took delivery of MA 60 in April, 2014, while the Y12-E joined its fleet seven months later. But the aircraft made loss as their operating costs was far higher than what they earned. NAC earned only Rs 141 million from MA 60 in the first year of operation, while its expenditure was Rs 405 million. Similarly, Y-12E earned Rs 12.2 million in the first nine months of its operation, compared to its operating cost of Rs 67.5 million.  

NAC officials have said that operation of more aircraft will help to win people's trust and help the carrier to increase its market share in the domestic market. 

It has been learnt that NAC executives were initially against the plan to bring more Chinese aircraft. But they had to relent after the tourism ministry piled pressure on the management.

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