Nepal Airlines Corporation (NAC) has planned to make German company Lufthansa as its strategic partner.
Lufthansa consulting, an aviation and management consulting company has received approval to be Strategic partner of NAC according to the prevailing law of Nepal. Three months ago, Lufthansa had sent the proposal to Ministry of Culture, Tourism and Civil Aviation.
According to Joint Secretary of Ministry of Culture, Tourism and Civil Aviation, Mr. Suresh Acharya said “Ministry of Finance has agreed to join strategic partners in accordance of the law.”
The discussion is in the final phase whether to give or not to the Lufthansa consulting and will be decided by the Council of Ministers, he added.
Ministry of Culture, Tourism and Civil Aviation has sent a letter to Ministry of Finance with the conclusion that Lufthansa would be suitable for the Strategic partners of NAC. Lufthansa consulting was the only consulting company to provide proposal for the strategic partner as offered by the Ministry of Tourism.
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 will receive 68 crore 86 lakh 76 thousands 4 hundreds and 79 for three year strategic partnership fee. Lufthansa has proposed to get 28 million in first and second phase and 33 million in third phase from NAC.
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 of Lufthansa will practice the planned work.
Lufthansa 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.
NAC earns Nrs. 4 billion annually from ground handling and has earned 5 million profits in the current financial year. If the ground handling is not done, there will be more than Nrs.1 billion loss annually.