KATHMANDU, Aug 15: The national flag-carrier, Nepal Airlines Corporation (NAC), is currently facing a severe crisis. Out of its 12 aircraft, none are operating domestic flights, while only three are in use for international flights. One large aircraft, an A330, was sent to Italy for maintenance with an expected return time of 30 days, but it has been stuck there for over 50 days. It is estimated that it will take two more weeks for it to return to Nepal.
"If this situation persists, the organization will have no aircraft left in a year," a staff member from the Ministry of Culture, Tourism, and Civil Aviation told Republica on condition of anonymity. "The corporation is on the brink of dissolution, unable to repay its debts."
The decline of the NAC began with political interference after 1990. During the tenure of former prime minister Pushpa Kamal Dahal, the acquisition of six Chinese aircraft for the NAC (one of which crashed in Nepalgunj, leaving five) led to its further decline when these planes were left grounded. None of these Chinese aircraft have flown since 2018 and are parked at the Tribhuvan International Airport. The annual insurance and parking fees for these aircraft exceed Rs 200 million.
One of the corporation's Twin Otter aircraft has been idle and unmaintained for 10 years. Two other Twin Otters, which were operating domestic services, have been out of service for a week. Since then, no domestic flights have been operating. Among the four large aircraft used for international flights, one has been sent to Italy for maintenance. Currently, three Boeing aircraft are barely managing international flights. However, the flight schedule is completely disrupted, with flights to destinations like Narita in Japan and New Delhi in India being canceled.
Political interference and bureaucratic inefficiency have contributed to the current state of the NAC. established in 1958, two years before the Thai government airline Thai Airways, the NAC now operates only three aircraft. On July 2, a five-member ministerial committee was formed to investigate the situation regarding the dispatch of two Airbus A320 and A330 aircraft for maintenance to Israel and Italy, respectively.
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A recent report from a committee chaired by former director general of the Civil Aviation Authority of Nepal (CAAN), Tri Ratna Manandhar, has attempted to assess the internal issues within the NAC. The report highlights that, based on the investigation, the maintenance and inspection of these two aircraft were carried out without fully adhering to regulatory procedural provisions and other applicable procurement laws.
The aircraft were flown from Dubai to Italy without approval from the regulatory body, the CAAN. The aircraft were sent to Italy for inspection without the CAAN's knowledge and were left parked without being assigned to an Approved Maintenance Organization (AMO). Due to this irresponsible conduct, the CAAN has suspended Executive Chairman Yubaraj Adhikari from his position as the 'Accountable Manager.'
Since then, there has been a lack of coordination between the NAC and the CAAN due to the absence of responsible officials. Adhikari has been handling only internal office tasks at the NAC. The licenses of Captain Maheshwar Man Dangol and Captain Raman Ghimire, who flew the aircraft from Dubai to Italy, have been suspended. Additionally, Captain Deepu Jwarachan, who was stopped from working as the NAC's Operations Director during the investigation, has now returned to his position. The NAC's Chief Maintenance Officer (CMO), Manager Gyan Bahadur Kunwar, has also been suspended from his duties.
According to the report submitted to Minister Badri Pandey by the investigation committee, there has been a pattern of preparing a list and schedule of aircraft engine or parts' average lifespan, replacement, or maintenance requirements only at the last moment. The report notes that the list of tasks that need to be completed within a time frame is either not prepared on time, or if prepared, is not implemented. Consequently, work is rushed at the last minute, leading to procedural errors and the potential for mismanagement.
The report states, "It is extreme mismanagement and negligence for the corporation not to have thought about or planned for the possibility of engine failure after nearly seven years of aircraft operation, and to fail to ensure the availability of standby engines." It also mentions that the Executive Chairman Yubaraj Adhikari lacks knowledge of aviation policies, rules, and directives from the CAAN.
The report also notes that the aircraft sent to Israel remained grounded there for 149 days. It mentions that due to the lack of a standby engine arrangement, there was no contingency plan for addressing engine issues. During the investigation, some employees reported receiving undue pressure from senior management (Executive Chairman Adhikari), threats of action if they did not comply, and subsequent punitive measures if they did not follow orders. The report states that Chairman Adhikari provided irresponsible responses regarding these deficiencies.
The report states, "When inquired with the executive head, there was an attempt to deflect responsibility by claiming that ‘I have been giving timely instructions to the relevant departments.’" It also states, "Lower-level staff have been shifting blame to higher management for mistakes caused by coercion from senior levels." Despite being an organization that should advance robustly in organizational, professional, and technical aspects to compete with international airlines, the report mentions that the leadership of the NAC has been weakened by political influence, interference, and party affiliations, leading to a decline in the corporation's reputation, as reported during discussions with the staff.
According to the report, unnecessary delays in the engine repairs of the A320 (9N-AKX) sent to Israel have led to an estimated loss of over Rs 1 billion for the NAC. The report states, "While only the paperwork processes were completed, no concrete results were achieved. Overall, neither the executive head nor the relevant departmental heads appear to have been seriously accountable for this situation."
The report also discusses how the NAC’s market is shrinking, its financial condition is deteriorating, and skilled personnel are leaving due to current weaknesses. Citing the Auditor General’s report, which notes that the corporation has been running at a loss each year with expenditures exceeding income, the investigation committee has prepared its report.
The NAC has taken a loan of Rs 34 billion. Due to its inability to repay the interest on time, the liability has increased to Rs 49 billion. In the three years since the Executive Director assumed office, the NAC has only managed to repay about Rs 5 billion of the over Rs 10 billion liability that was due.
The report studied by the new Minister Pandey is awaiting implementation by the NAC's staff. The current government’s approach to solving the NAC’s problems remains a matter of anticipation. The NAC’s Executive Director claims that the officers and other staff themselves are delaying the work and blaming him for that.
