Nepal to sell five Chinese airplanes after grounding them two years ago

Nepal Airlines has chosen to sell five of its Chinese-made aircraft after suffering significant losses and finding no buyers.

According to reports, the planes were becoming a financial burden for the national flag carrier, which was already drowning in debt, because they spent more time on the ground than in the air. Nepal Airlines eventually decided it didn’t want the albatross around its neck after the directive of the Ministry of Finance eight years after purchasing a batch of Chinese aircraft it had hoped to fly on underserved mountain routes.

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In addition to problems with maintenance and a shortage of replacement parts, Nepal Airlines was unable to locate pilots to operate the aircraft, therefore it was pointless to keep them. Nepal Airlines has set a deadline of October 31 for bids. Top Nepal Airlines executives claim they don’t anticipate seeing possible lessors.

After purchasing the Chinese aircraft, the first batch that entered in 2014 experienced difficulties. The need to sell these aircraft at a loss price has now arisen as a result of the losses continuing to escalate. At the time, China gave a grant and offered a concessional loan in the amount of 408 million Chinese Yuan, which is equal to 6.67 billion Nepali rupees.

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A grant totaling 180 million yuan (or 2.94 billion Nepali rupees) of the overall aid funds was used to purchase one MA60 and one Y12e aircraft. With a soft loan from China’s EXIM Bank, the other planes were purchased for 228 million yuan (3.72 billion Nepali rupees). Soon after their arrival, the NAC board recognized that operating an aircraft was more expensive than buying and bringing one to Nepal.

The NAC board decided to stop operating the aircraft in July 2020, and they have since been stored at Tribhuwan International Airport. The Ministry of Finance has started paying back the interest on the loans for the planes even though they are no longer in use due to expensive operationalization and being unfit for fly.

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