The national flag carrier Nepal Airlines Corporation (NAC) is currently facing difficulties to provide salaries to the staffs and run the organization smoothly. The carrier is holding a huge debt after procuring two wide-body A330 aircraft with loan from Employees Provident Fund (EPF) and Citizen Investment Trust (CIT).
Seeing the worsening financial condition of the flag carrier, the government of Nepal is preparing to provide NRs. 3 Billion financial support. Nepal Airlines had requested government to provide NRs. 20 Billion for smooth operation.
NAC had expected NRs. 5 Billion from the government soon for the first phase and remaining NRs. 15 Billion in the next quarter. Ministry of Culture, Tourism and Civil Aviation (MoCTCA) had sought financial intention from the flag carrier.
MoCTCA informed that the ministry was only able to provide NRs. 3 Billion but in the form of loan. Ministry also insisted that after analyzing NAC’s financial position, NRs. 3 Billion could solve their current problem.
NAC’s long-term debt has reached around NRs. 37 Billion and the corporation has loan of more than NRs. 12 Billion from CIT at 10.5 per cent interest. The annual interest of loan only is more than NRs. 3 Billion. The sanctioned loss of the corporation has reached NRs.2.6 Billion.
Previously, the board of directors decided to demand NRs. 20 Billion with the contemporary government of Sher Bahadur Deuba. However, with the change of Government, the Ministry had suggested the corporation to revise the amount. According to the Ministry’s suggestion, the corporation decided to request NRs 5 Billion. The letter was sent to Finance Ministry on the month of May, 2018.
The main source of income is still from Ground handling. NAC has already started preparing to buy 6 new Twin Otters for domestic flights. The Board of Directors had approved the procurement of two narrow body jet Airbus A320neo (new engine option) aircraft also.
Currently. NAC has 2 A330, 2 A320 for operating international flights whereas 4 Y-12e, 2 MA-60 and 2 Twin-otter for conducting domestic flights.