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Nepal Airlines under the debt-trap

Kathmandu, 16 November: Due to lack of professional market planning, the newly purchased wide-body aircrafts have created financial risk to the Nepal Airlines Corporation.

The Airlines, to get rid from the debt-trap, has urged the government for financial support.

Issuing a white paper on Thursday, executive chief of NAC, Madan Kharel said that the Corporation is facing financial crunch to payback its loan and interests as the capital transaction is less than the installment to be paid by the Corporation. He thus said that until operation of professional flights from the two new wide-body aircrafts, the government has to provide financial support.

The Corporation, by creating brokers, has purchased two wide-body aircrafts. The Corporation has already paid 25 billion rupees by taking loan 12 billion rupees each from the Karmachari Sanchaya Kosh and Nagarik Lagani Kosh. The Corporation has to payback above 10 million rupees as interest daily to the two financing institutions.

On the other hand, the two wide-body aircrafts have not been able to fly to the new destinations and currently they are flying to the sectors where the two narrow-body aircrafts are flying. As operation cost of the wide-body aircrafts is high, while flying in the very sectors the narrow-body aircrafts were flying, the Corporation is facing heavy loss.

The Corporation led by Sugatratna Kangsakar had brought the two wide body aircrafts without proper market planning. It makes clear to understand that Kangsakar was concerned only on commission amount to be received from purchase of the new aircrafts and he was less bothered about introducing effective market management.

Under Kangsakar’s leadership, four Chinese aircrafts were grounded, however, the new management has operated five Chinese aircrafts.

Wide-body becomes white elephant:

Operational loss by flying the wide-body aircrafts that faced by the Corporation in 45 days has reached at 491.8 million rupees.  The loss is above 10 million rupees each day.

The Kangsakar led management team had performed negligence while managing necessary pilots to fly the wide-body aircrafts. There are eight captions to fly the wide-body aircrafts. Out of them, there are only two Nepalis and the rest are foreigners. To operate the two aircrafts with full capacity, there is needed more ten captains, 12 co-pilots and four flight instructors.

People’s News Monitoring Service

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