NAC to bear hefty loss as wet lease agreement remains unconfirmed

Nepal Airlines Corporation (NAC) is expected to encounter hefty loss following the uncertainty of wet lease agreement of one A319 with Bhutan Airlines. Boeing 757 ‘9N-ACB’ has already departed to Singapore for scheduled C-Check that could last for minimum of one and half months so, the corporation in deficiency of aircraft is experiencing pressure in flight operation.

Previously, NAC was in negotiation with Bhutan Airlines to wet lease one Airbus A319 aircraft however; Civil Aviation Authority of Nepal (CAAN) came with a conclusion that the A319 with age of over 15 years is ineligible for leasing. Ministry of Culture, Tourism and Civil Aviation also supported the declaration of CAAN and decided to terminate the wet lease approach of NAC.

Figure: Aircraft Eligibility Requirement as per CAAN

An official from the Ministry said, “Currently, we do not have any documents from NAC regarding wet leasing and it is pretty sure that the wet lease option is cancelled by the corporation.”

NAC received sealed bid through global tender from two companies to wet lease of one A319/A320/A321 aircraft. Bhutan Air and Ukraine’s Star Aviation delivered their interest in providing one of the aircraft to NAC as a wet lease. The bid arrived only after second global tender notice as there was none at the first one. As Ukraine’s Star Aviation approached with hefty wet lease agreement so, NAC preferred Bhutan Airlines.

NAC has been compelled to decrease flight frequencies and also terminate the ticket sales for New Delhi, Kuala Lumpur, Bangalore and Doha. This harsh situation expected to last for two months will create a huge amount of loss for the national flag carrier.

Why did NAC tried to wet lease the A319 aircraft with the age of over 15 years despite knowing the flight regulation of CAAN? This is a serious question for the respective authorities and it is also the urgency to find out the alternatives so that NAC can protect its superiority and minimize losses.


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