NAC Wide-body Order

After a month of delay, Nepal Airlines Corporation NAC has signed a Rs 24b loan agreement with EPF and CIF and ordered wide body aircraft

June 25, 2017, 8:58 a.m. Published in Magazine Issue: VOL. 10, NO. 21, June 23- 2017 (Asadh, 2074)

Although it was delayed by almost a month, following dilly-dally and conspiracy, NAC has sent the money to order two wide bodied Airbus 330 to Nepal. Thanks to tireless efforts, managing director Sugat Ratna Kansakar has made what he has been aspiring for long.

In his long career, MD Sugat Ratna Kansakar has shown that he has the capability to transform organizations. During his tenure as a MD at Nepal Telecom, he even filed a petition against very close relatives of then monarch in modernizing Nepal Telecom System.

Had he surrendered in that case, Nepal’s Telecom would have been left behind far away. Similarly, he was put in prison in his early tenure when he made efforts to bring two narrow body airbuses.

As NAC signed two separate agreements with Employment Provident Fund (EPF) and Citizen Investment Fund, Kansakar’s vision to equip Nepal Airlines with wide body aircraft has finally materialized. As per the agreement, Nepal Airlines will receive Rs. 24 billion as a loan to bring the two wide-body Airbus series.

Nepal Airlines Corporation (NAC) signed an Rs 12-billion -loan -agreement with EPF. As stipulated in the loan agreement, NAC will pay interest to EPF at the annual rate of 9 percent.

As per the agreement, NAC will have to clear the loan within 15 years. The meeting of board of directors (BoD) of NAC had approved a proposal to take loan from CIT and EPC to buy two Airbus A330-200.  It signed loan agreements with EPF and CIT as per the decision of its BoD.

“Transformation is always a difficult process. One needs to have patience and courage. With two new wide body aircraft, Nepal Airlines can now bring more tourists to sustain tourism sector of Nepal,” said Kansakar.

With the approval from Nepal Rastra Bank, NAC has already sent foreign currency equivalent to Rs 8 billion as the first installment to the aircraft supplier company.

NAC has already signed a Memorandum of Understanding (MoU) with AAR Corp to buy two wide-body aircraft at Rs 21.58 billion.

As per the MoU, AAR will have to send the first wide-body to Kathmandu by June 2018 and second aircraft one month later. Earlier, the American company had said that it would send the first aircraft within mid-December 2017 and another within mid-March 2018.

NAC will clear the payment to the US firm in two installments. It will send Rs 13.34 billion in the second installment. The national carrier had sent advanced payment of Rs 100 million to AAR on February 15. The wide-body aircraft will have 264 seats in economy class and 16 in business class.

The national flag carrier plans to use both the aircraft for long-haul flights. The first wide-body aircraft will make maiden flight either to Tokyo (Japan) or Seoul (South Korea). The aircraft can fly non-stop for 10 hours.

MD Kansakar has shown that nothing is impossible given the strong support of employees and government officials. Along with this, there is also the need of a strong commitment from organization leaders, like MD Kansakar.

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