Nepal Airlines to Sell Chinese-built Aircraft
Airlines Business / Finance

Nepal Airlines to Sell Chinese-built Aircraft

DALLAS – After failing to lease five of its Chinese-made aircraft, flag carrier Nepal Airlines (RA) wants to sell them to avoid further losses.

In 2014, RA purchased the aircraft to conduct operations on underserved mountain routes, but the plan to fly them to their full capacity went awry—the aircraft spent more time on the ground than airborne.

The types flew to few airports in the Tarai plains and therefore became a financial burden on an airline already engulfed in debt. Following directives from the Ministry of Finance, RA decided to dispose of the aircraft.

In 2012, the airline signed a purchase agreement for four Y12Es and two MA60s, the aircraft in question. Fast forward to the present day: five of these aircraft are grounded at Tribhuvan International Airport (KTM), while the remaining aircraft is out of service due to an accident in 2020.

Nepal Airlines’ Xian MA-60. Photo: Rui Miguel, CC BY-SA 4.0

A Series of Unfortunate Events

At the beginning of the pandemic, one of RA’s Y12e aircraft landed approximately 60 meters short of the runway, skidding to a nearby grassland at Nepalgunj Airport (KEP). The pilot was suspended for “faulty approach” on landing.

The airline struggled to find pilots to fly the aircraft whilst facing maintenance issues and a lack of spare parts, with no income generation as grounded planes earn no cash. After concerns about the performance of the aircraft, the crash, pilot layoffs, increasing expenses, and a grounded fleet, the board of directors made a unanimous decision to cease operations of the 17-seater Y12e and the 56-seater MA60.

Even though the planes were out of operation, the government still had to pay the interest on the loans for the aircraft. Therefore, the option of leasing was introduced, with deadlines for bids set for October 31, 2022. Officials, however, are not optimistic about potential lessees.

Local reports state that the Ministry of Finance instructed RA’s corporation to prepare to sell the aircraft to anyone who wants it after not even leasing it from this call.

With expenses ramping up, the airline expects to sell these unfit aircraft at a loss price.

Featured image: Nepal Airlines’ Harbin Y-12. Photo: Shadman Samee from Dhaka, Bangladesh – 9N-AKV: Nepal Airlines Harbin Y-12E., CC BY-SA 2.0

From residing in the Caribbean, Tarik has developed an interest in studying how developing nations benefit from the presence of the aviation industry through tourism, trade, and other linkages. Based in Jamaica.

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