PM rules out bailout for loss-making NAC (with video)

Published On: July 2, 2019 06:00 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, July 2: Prime Minister KP Oli has said the government will not inject funds in the crisis-ridden Nepal Airlines Corporation (NAC) under the existing circumstances.

Speaking at the 61st-anniversary function of the national flag carrier in the capital, Prime Minister Oli said that the government was not going to make any more investment in the crisis-ridden airline company until it improves its performance.

“In the current situation, the government cannot inject any money. Without good management and operation, I don't think the situation will improve only by doling out funds,” he said, putting reform of the NAC as a precondition for providing any more funds to the airline company.

The statement by prime minister comes following recent requests by the NAC to the government to provide a bailout of Rs 20 billion.

“We have not been able to effectively manage and operate our planes. If we are unable to improve things then let's bring a strategic partner,” said Prime Minister Oli, referring to the NAC's failure to earn profit from the recently procured two wide-body aircraft.

The airline company currently has two wide-body and two narrow-body aircraft in operation. They fly to seven countries including India, Malaysia and Qatar.

Although the NAC purchased two wide-body Airbus A330 jets last year, it has not been able to find new destinations. Against the expectations that the new flights will help in the turnaround of the loss-making company, it is struggling to increase flights and destinations.

It even postponed its earlier plan to fly to Osaka of Japan from the first week of July, citing poor ticket bookings.

Oli also questioned the NAC management's competence to run the company. “All private airlines are doing well, but government-owned airline is making losses. Is it because we are incompetent?” he questioned.

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