NAC profit soaring due to Jet Airways’ flight cancellation

Flag carrier Nepal Airlines Corporation (NAC) has been making profit in flight to neighboring country India after increasing flight in the sector if Kathmandu-Delhi.

The corporation has been operating 14 flights weekly to Indian cities from 11 weekly flights after the Jet Airways, suspended all its flights.

The closure of jet airways has helped corporation to increase flight in the sector as well as flight occupancy has also been reported to be full. The situation has led for increase in profit of the corporation.

The corporation has been making around 40% of profit and wide-body aircraft have also been able to make more than 10 hours flight time as compared to around 7 hours per day in the past.

However, the profit is just mere percent compare to loan of the corporation as the corporation has been in debt since procuring wide-body Airbus aircraft. NAC has loan along with interest for procurement of the wide-body A330 series aircraft and the profit coronation is recent earning is very less so as to clear the debt.

NAC purchased two wide-body A330 aircraft with loan from Employees Provident Fund (EPF) and Citizen Investment Trust (CIT) and has been in trouble as the corporation has been unable to pay interest.

The corporation purchased 4 aircraft at 37.58 billion Rupees and had agreed to pay principal and interest in every 3 months for 15 years.

The corporation took loan so as to clear debt within 60 installments and the corporation has to pay around 804 million rupees in single installment.

NAC has been able to pay 1st installment and has also not fully paid installment of Poush as well. NAC is unable to pay installment of airbus aircraft for month of Chaitra as well. The corporation is preparing to pay installment out of total earning only.

The corporation had previously asked around 20 billion from Government to repay the installment but government had denied. The corporation had again requested around 5 billion and now the government is preparing to provide NRs. 3 Billion financial support.

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.

The corporation has been unable to pay the installment as it is was unable to operate its aircraft according to pre-made plan. Most loss is being incurred from wide-body as the corporation is unable to operate the aircraft in long-haul route and is operating them in same old short destination.

The corporation has also been unable to expand its destination so as to operate in full capacity.

The corporation has been operating flights to Delhi, Bangalore, Bombay, Kuala lumpur, Bangkok, Hong Kong and Doha in international sector with its 4 Airbus aircraft and the corporation can add flights to those sector to increase flight.

Now the corporation is looking to add new destination and the flight to Japan is set to be initiated within couple of months. The flight to Japan is also set to enhance in financial part of the company and will add some more destination thereafter.

NAC currently operates international flights with two Airbus A320s and two Airbus A330s. The corporation has already retired its only left vintage Boeing 757.

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