Nepal Airlines to sell 5 China-made aircraft unfit to fly

After facing heavy losses, Nepal Airlines has decided to sell five of its Chinese-made aircraft as nobody wants to lease them.

The aircraft spent more time on the ground than in the air, and they were becoming a financial burden on the debt-ridden national flag carrier, reported Nepali publication hamrakura.com. Eight years after acquiring a batch of Chinese planes it had hoped to fly on underserved mountain routes, Nepal Airlines finally decided that it didn't want the albatross around its neck anymore after the direction of the ministry of finance.

In 2012, the corporation advanced the purchase agreement of four Y12E (Y12E) and two MA60 (MA60) aircraft from China. One of these planes is now in a state of non-operation after the accident, while the remaining five are sitting idle in the parking lot of Tribhuvan International Airport.

Besides maintenance issues and lack of spare parts, Nepal Airlines couldn't find pilots to fly the aircraft, and there was no sense in keeping them anymore, reported hamrakura.com.

The deadline for the bids set by Nepal Airlines is October 31. Some top Nepal Airlines officials say they do not expect to see potential lessees.

It is said that the ministry of finance has instructed the corporation to prepare to sell the aircraft to anyone who wants it after not even leasing it from this call, reported hamrakura.com.

After purchasing the Chinese aircraft, it became a headache for the first batch that entered in 2014. Now, as the losses continue to increase, the situation has arisen that these aircraft have to be sold at a loss price.

In November 2012, state flag-carrier Nepal Airlines Corporation (NAC) signed a commercial agreement with the Aviation Industry Corporation of China (AVIC), a Chinese Government undertaking to procure the aircraft.

China at the time had provided the grant and concessional loan assistance of 408 million Chinese Yuan (£51.2 million), equivalent to 6.67 billion Nepali rupees.

Out of the total aid money, a grant worth 180 million yuan (£22.5 million or Nepali rupee 2.94 billion) went to pay for one MA60 and one Y12e aircraft. The other aircraft were bought for 228 million yuan (£28.6 million or Nepali rupee 3.72 billion) with a soft loan provided by China's EXIM Bank.

Soon after their arrival, the NAC board then realized that aircraft cost more to operate than to purchase and bring to Nepal.

In July 2020, the NAC board decided to stop the operation of aircraft and since have been kept at the Tribhuvan International Airport.

Though the planes are out of service due to high-cost operationalisation and being unfit to fly, the ministry of finance has started paying back the interest on the loans for the planes.