Finance ministry approves negotiations with Lufthansa Consulting

The proposal on negotiations with Lufthansa Consulting which is set to become a strategic management partner of Nepal Airline Corporation (NAC) has been approved by the Ministry of Finance.

Ministry of Culture, Tourism and Civil Aviation (MoCTCA) had sent a letter to Ministry of Finance with the conclusion that Lufthansa would be suitable for the Strategic partner of NAC. Lufthansa consulting was the only consulting company to provide proposal for the strategic partner as offered by the Ministry of Tourism.

The Finance Ministry has informed MoCTCA to hold talks with the German consulting company if it can enhance the operation and generate benefit for the national flag carrier.

MoCTCA is permitted to proceed further in accordance to the prevailing laws. The Tourism ministry however said that their decision to select German company on legal provision could be reversed by the new government despite the approval in accordance to Public Procurement Act.

Lufthansa had proposed 35 per cent of NAC’s profit in the first year, 40 per cent in second year and 42 per cent in the third year.  Lufthansa has agreed to receive 35-42 per cent of the annual profit as a strategic partner.

Lufthansa consulting will work to find the weakness of NAC for the first four weeks at first phase, in the second phase, the drafting of the corporation will be ready within 5 months and the third phase will see the implementation of the planned work.

Moreover, the company will handle NAC’s engineering department, operation department, finance department and marketing department. However, the ground handling work will not be assigned to Lufthansa.

Although the Ministry has proposed to keep strategic partners for NAC for the next 10 years, Lufthansa proposed only three years in the first phase and two years of partnership will be made in the second phase. Along with the agreement of Ministry of Finance, Ministry of Tourism will send proposal to Council of Ministers for the final decision.

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