NEPAL AIRLINES New Destinations

With the signing of the procurement agreement with an American firm, Nepal Airlines has also started to prepare its flight plan for four new routes

Feb. 25, 2017, 5:45 p.m. Published in Magazine Issue: Vol.10, No 13, February 24, 2017 (Falgun 11, 2073)

For the first time in the history of Nepal, Nepal Airlines Corporation, the national flag carrier, is eying to fly Australia soon after it receives its first wide body Airbus aircraft by January 2018. With two wide bodies, Nepal Airlines has plans to add four new routes, including Japan.

Although Nepal is still in the air safety list of the European Commission, Nepal cannot fly to European destinations at the moment. Now the national flag carrier has plans to connect Kathmandu with Seoul in South Korea, Tokyo in Japan, Dammam in Saudi Arabia and Sydney in Australia. It has also announced increasing flight frequencies to key destinations like Kuala Lumpur, Hong Kong and Doha.

“Nepal Airlines will revive its strength and capacity after adding two wide body aircraft. As one of the most profitable routes, we have planned to resume our flights to London as well. What we need to do is to get the clearance for flights to Europe,” said Sugat Ratna Kansakar, managing director of NAC, while addressing a press meet.

Europe is a large tourism destination and there is a possibility to increase the number of visitors from the continent. With more than 5000 rooms added in Kathmandu hotels in the next few years, the success of Nepal’s airlines will be crucial for the country's tourism sector.

“With no direct flight, the Kathmandu-Japan route is the most expensive flight. If we want to increase the number of Japanese tourists, there is the need to resume the flights,” managing director Kansakar said in his first press conference the following signing of the aircraft purchasing agreement.

As Nepal Airlines is planning to fly to Australia, Nepal government has also proposed signing a bilateral air service agreement (ASA) with Australia. The Tourism Ministry has requested the Australian government for an ASA allowing 14 weekly flights with any type of aircraft.

With the demands of flights growing in China, Nepal Airlines is also eying the Chinese market. It has already applied for landing permission at Guangzhou Baiyun International Airport, which is the third busiest airport in China in terms of passenger traffic.

As NAC signed a memorandum of understanding with US-based AAR Corp to buy two Airbus A330-200 long-range jets, the airline will receive its first aircraft by January 2018. The airline has already paid a $1 million ‘commitment fee’ to AAR Corp to formally confirm the order.

According to NAC, it plans to sign a purchase agreement by March. The American aviation support company has quoted an ‘offer price’ of $104.8 million for each jet. However, the ‘contract price’ may be slightly different or could go up to $109 million in the purchase agreement, according to NAC.

Nepal Airlines Corporation (NAC) has started negotiations with the government-owned Employees Provident Fund (EPF) for a loan agreement to purchase two Airbus ‘wide-body’ aircraft as the NAC board has already selected American leasing company — AAR Corporation — as the supplier.

“Financial closure will be achieved by February and the corporation is preparing to sign aircraft purchase contract with the supplier in March. NAC and EPF officials have already started negotiations and EPF has proposed to lend the entire amount of Rs 25 billion required for purchasing the two aircraft at nine per cent interest rate,” said Kansakar.

The Memorandum of Understanding (MoU) with the supplier was signed on January 27 after the AAR Corp was selected among the bidders to supply aircraft on January 14 by the tourism secretary-led board of directors meeting of NAC.

“With the process to purchase aircraft gathering pace, we believe we will have five aircraft in the international fleet by September 2018,” Kansakar stated. Currently, NAC has two narrow-body Airbus aircraft and one narrow-body Boeing aircraft in its international fleet, which has been covering eight destinations.

“As AAR Corp has already placed the order for two A330-200 series aircraft with the manufacturing company, NAC will receive the first aircraft by January 2018,” said MD Kansakar. The supplier has quoted $104.8 million for each aircraft. The rate quoted by the supplier is way below NAC’s estimation of $118 million to $119 million, according to NAC managing director. “These two aircraft are cost-effective and will be delivered within one-and-a-half years.”

With the increase in the number of aircraft, Nepal Airlines can contribute to revive Nepal’s tourism sector, which is badly suffering with stagnant arrival numbers of tourists.


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