Kathmandu, Oct 2: Nepal Airlines (NA) is struggling with mounting debt, high borrowing costs, a shortage of pilots and engineers, and an inadequate fleet, putting further pressure on the national flag carrier.
Acting General Manager Janak Raj Kalakheti told the House International Relations and Tourism Committee on Friday that five wide-body captains had resigned over poor pay and benefits. Accepting their resignations could make it difficult for the airline to operate its wide-body aircraft, he said.
Foreign airlines offer pilots and engineers substantially better remuneration, making it difficult for Nepal Airlines to retain skilled personnel.
Financial pressure remains another major concern. The airline has borrowed from the Employees Provident Fund and Citizen Investment Trust at interest rates of around 9.5 to 10.5 per cent, compared with prevailing market rates of roughly 4.5 to 5.5 percent.
Kalakheti said interest charged during the COVID-19 period alone added around Rs 7 billion to its debt burden. Lenders have refused to restructure the loans until outstanding dues are cleared, a condition he said the airline cannot meet without government support.
He called for government intervention in debt restructuring and broader corporate reform, noting that recommendations made by several previous reform committees remain largely unimplemented.
Fleet limitations have further weakened the airline’s position. Nepal’s aviation market is estimated at Rs 120 billion to Rs 135 billion annually, but Nepal Airlines generates only around Rs 18 billion in business, representing a market share of about 15 to 16 per cent. Foreign carriers take most of the remaining business.
Kalakheti said expanding the fleet would help Nepal Airlines increase its market share while supporting tourism, employment and related industries.
Aircraft maintenance has also become difficult. Rolls Royce engines on the airline’s wide-body aircraft require mandatory overhaul after 6,000 operating hours, but procurement complications have delayed the work. Potential bidders have raised concerns over the airline’s bank guarantee requirements.
Kalakheti said Nepal Airlines needs practical procurement reforms, fleet expansion, debt restructuring and government backing to overcome its financial and operational problems.
He also argued that domestic services to remote areas should not be assessed solely on profitability, as they provide essential connectivity and should be treated as a public service.
People’s News Monitoring Service
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