After facing losses, Nepal Airlines decides to lease out or sell 6 Chinese-made aircraft

ANI
·2-min read
Representative Image
Representative Image

Kathmandu [Nepal], April 6 (ANI): After facing heavy losses, Nepal Airlines has decided to lease out or sell six of its Chinese-made aircraft.

"Out of the two options recommended by the Nepal Finance Ministry--dry lease or outright sale--Nepal Airlines will try the first one," The Kathmandu Post quoted Dim Prasad Poudel, Managing Director of Nepal Airlines, on Sunday as saying.

"We have constituted a committee to determine the lease rate. The panel will submit a report within a week, and we will show it to the board for its go-ahead," he added.

After the board's approval, Nepal Airlines will invite offers from prospective national and international bidders to lease the Chinese planes, said Poudel.

He further stated that "if there are no takers, we will go for the second option--sale. Both options seem difficult, but we don't have any alternative".

Citing the Nepal Airlines officials, The Kathmandu Post reported that the planes will be given on dry lease, which means the owner will provide the aircraft only, without crew or ground staff.

Nepal Airlines has repeatedly said that the Chinese-made planes were causing heavy losses ever since they were acquired between 2014 and 2018 and that it wants to remove them to stop further losses.

The finance ministry, the owner of the planes, gave the green signal to Nepal Airlines last month to lease out or sell the planes.

In July last year, the board of directors of Nepal Airlines unanimously decided to stop flying the Chinese planes as they cost more money to operate than they brought in.

Five months after the decision, in December 2020, the national flag carrier had submitted four options to its line ministry--Civil Aviation Ministry--to get rid of the six inefficient Chinese aircraft in its fleet.

The first option was to ask the aircraft manufacturers to buy back the planes by evaluating their existing worthiness.

The second option presented by the flag carrier was to lease out the planes to interested Nepali operators on either a long-term or a short-term basis.

The third alternative was to auction off the planes through a global competitive bidding process.

The fourth option was to look for Chinese or international companies or banks interested in buying or leasing them. (ANI)