KATHMANDU, March 26: Seven companies have expressed interest in leasing two Airbus narrow-body aircraft to the national flag-carrier Nepal Airlines Corporation (NAC) for international flights. The NAC is seeking to lease Airbus A320-200 series aircraft with a capacity of 158 seats.
The NAC had also studied and asked for a proposal on the issue of leasing two narrow-body aircraft with the same capacity as their current fleet. NAC Spokesperson Ramesh Paudel said that seven companies had applied by last Friday, the last day of the deadline for application.
Paudel says that it is not possible to disclose the names of the companies that have submitted their applications. He said that disclosing the names of the applying companies at this stage could create undue pressure.
The NAC will now evaluate the proposals submitted by these companies. It will take about a month to evaluate the technical proposals of all the companies and look at the financial proposals to reach the final decision, he said.
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The NAC will lease two narrow-body aircraft by selecting the company that is suitable both technically and financially.
The sub-committee formed under the coordination of Kishor Pradhan, a member of the board of directors of the NAC, completed the study and submitted a report to the NAC on how wet lease (aircraft rental with captain, engineer and air hostess) can be adopted.
On the basis of the same response, the NAC called for public proposals for leasing two narrow-body aircraft.
According to the NAC, within three months, preparations have been made to lease 2 narrow-body aircraft and fly them, and the proposal has been made accordingly.
The aircraft brought by the NAC will be able to expand flight operations to the current profitable destinations - Malaysia, Delhi, Saudi Arabia, United Arab Emirates (UAE). The NAC is also planning to focus on long-distance destinations such as Japan and Australia with its widebody fleet.
According to the NAC, it is estimated that taking an aircraft on wet lease will cost at least 3,000 dollars per hour. It is mentioned in the suggestions made earlier by the study committee that the NAC can earn profits by renting at that rate.
According to the NAC, the 158-seat narrow-body aircraft currently earns Rs 7 billion annually, with annual expenditures amounting to Rs 6 billion. The data of the last fiscal year 2022/23 shows that the NAC earned a profit of Rs 950 million annually just by flying two narrow-body aircraft.
According to the NAC, its narrow-body aircraft are flying at a profit. As it can earn more than Rs 1 billion annually, it is said that the NAC will be able to earn profits by expanding the flights to the current destinations.
In the current fiscal year 2023/24, the NAC is estimated to earn more than Rs 9 billion from two narrow-body aircraft, according to the NAC.
The NAC will spend about 8 billion rupees of this income on flights. After such expenses, the NAC claims that the annual profit will be more than Rs 1.3 billion solely by flying narrow-body aircraft. It is mentioned in the business plan prepared by the NAC that after the next 5 years, a profit of Rs 1.69 billion can be made only through narrow-body aircraft operations.
