Himalaya Airlines, which has been operating international flights making Kathmandu a hub for three years has lease out one of its Airbus A320-214 series narrow-body aircraft to Bamboo Airways, Vietnamese Airline Company for one year.
The airlines made this decision after failing to carry out business according to the plan.
Vijay Shrestha, Vice president of Himalaya Airlines stated that one out of three Airbus A-320 having 158 seat capacities with the Nepal registration number ‘9N-ALM’ call sign flew to Vietnam on last Friday (May 17).
With the aircraft of Himalaya Airlines, Bamboo Air will operate scheduled flights from Hanoi, capital city of Vietnam to Japan, Korea, Taiwan and 14 domestic sectors of Vietnam.
As per the source, Bamboo Airways will return A320 back to Himalaya Airlines after adding new aircraft to its fleet.
Vice President Shrestha said that the aircraft is leased out for one year on ‘wet-lease’ concept.
Airlines lease aircraft from other airlines for two main reasons: to operate aircraft without the financial burden of buying them, and to provide temporary increase in capacity. Wet-leasing means leasing the aircraft for short term.
In the agreement between two airline companies, it is mentioned that Himalaya Airlines will be responsible for the regular repair and insurance costs of the aircraft.
One year agreement will be renewed in 6/6 month, added Shrestha.
“According to the agreement, Bamboo Airways should pay $1800 (NRs 2 lakhs) to Himalaya Airlines per hour” said the source, “according to this rate, Bamboo Airways should operate 300 hours in a month.”
Previously, Himalaya Airlines decided to lease out the aircraft to Salam Air, Oman. However, Salam Air refused to acquire the aircraft on lease on final discussions. Thus, Himalaya Airlines leased out its aircraft to Bamboo Airways of Vietnam for one year.
According to Shrestha, Himalaya Airlines had asked permission from Civil Aviation Authority of Nepal (CAAN) to lease out two aircraft but CAAN refused to accept the proposal.
According to CAAN’s rules and regulations, an airline company must have a minimum of two aircraft for the company to be in operation. Because of that, the airline leased out only one aircraft as the carrier has three Airbus A320-214 series narrow-body aircraft, Shrestha added.
The sources claimed that the Himalaya, which has not been able to earn profits in business, is facing a problem of increase in the pending dues of various institutions in Nepal.
Currently, the company is facing a loss of around NRs 7 billion, added the source.
Likewise, Himalaya Airlines still has to clear dues worth Rs 200 million to the Civil Aviation Office at Tribhuvan International Airport (TIA) till now.
According to the TIA officials, Himalaya Airlines has made a commitment to clear its dues in installments after receiving payment from Bamboo Airways.
Established in August 2014, the company has been operating commercial flights to Dammam, Doha, Dubai, and Kuala Lumpur and has recently started operating flights to Abu Dhabi as well.
Himalaya Airlines has 51 per cent share of Yeti World Investment and 49 per cent share of Tibet Airlines.