Monday, February 11, 2013

Cabinet allows Nepal Airlines to revive Airbus pact

The cabinet today directed the ailing national flag carrier to revive the shleved agreement with Airbus to purchase two aircraft.
The Supreme Court’s has on April 24, 2012, decided that the order to cancel the purchase decision of Public Accounts Committee (PAC) on December 28, 2009, was an absolute interference in Nepal Airlines’ internal matters and it does not hold any legal base.
After the Supreme Court verdict, the Ministry of Tourism and CivilAviation had asked the government to remove all the legal hurdles to allow NAC revive the old deal with Airbus.
The government has already agreed to provide guarantee for the purchase of two aircraft from Airbus for the Nepal Airlines Corporation (NAC) that is fast losing its market due to lack of aircraft.
The NAC board, on October 26, 2009, had decided to purchase one narrow body A320-200 and one wide body A330-200 aircraft from Airbus.
However, now-defunct PAC had directed the government to cancel the deal.
On August 1, 2012, the cabinet had approved a proposal submitted by the ministry to allow the ailing airline to buy two jets.
Last November Airbus officials visited NAC and informed that the European company is ready to provide the NAC two aircraft but the price might go a little higher due to increased cost from the price they had agreed three years ago while aligning an agreement.
Airbus had quoted $41.28 million for an A320-200 (narrow body) aircraft and $92.84 million for A330-200 (wide body) aircraft on November 6, 2009.
Started on July 1, 1958 as Royal Nepal Airlines Corporation (RNAC), the current NAC has been left with two age-old Boeings for the international operations.
The airlines that has huge army of staff but has currently operating two 20-year old Boeing and four twin otter – though it had seven twin otter and one avro once – raising its operation cost.
Nepal Airlines has Rs 300 million authorised capital but it has Rs 162.30 million paid up capital and the government has pumped in Rs 217 million to make its total capital of Rs 379.30 million, which is too little to run an aviation company.
Due to regular political bickering and mismanagement, the state owned airlines has been incurring a loss of Rs 180 million annually, though it has expected to earn Rs  600 million from ground handling of 125 flights – per week – of 13 international airlines in the current fiscal year. Ground handling that is a major source of income for NAC could also be made more competitive for increased income with technical up-gradation.

1 comment:

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