Monday, June 3, 2013

Nepal Airlines Corporation to sign loan agreement with Employment Provident Fund

Nepal Airlines Corporation (NAC) is planning to sign Rs 9.80 billion loan agreement with Employees Provident Fund (EPF) to purchase two aircraft from Airbus.
The NAC and EPF will sign loan agreement soon, according to EPF administrator Krishna Prasad Acharya. “Though, the interest rate has not been finalised yet, it could be around 12 per cent.”  
Once the loan agreement is signed, the NAC will sign purchase agreement with the Airbus as the Finance Ministry has already approved and guaranteed the loan.
The ailing national flag carrier has planned to repay loan in installment that will be fixed once it states operating aircraft from 2015.
However, without its organisational reform, the corporation that has been operating with only one aircraft in the international route – though it has two Boeing 747s – and domestic route, could not fly back to black, let alone to green.
According to the Memorandum of Understanding (MoU) between NAC and Airbus, the Airbus will deliver one of the two A320-200 aircraft in February 2015, and the other will arrive in March. It has paid $500,000 commitment fee to Airbus according to the agreement signed between them on April 6.
The corporation – that is in urgent need of aircraft – needs $150 million to purchase the aircraft, though the actual price of the aircraft will be confirmed only after delivery.
The Airbus has promised to deliver aircraft by 2015. Airbus had quoted $41.28 million for a narrow-body aircraft and $92.84 million for a wide-body aircraft in the 2009 deal. However, the initial deal has already been revised and agreed to add the factory price as the price has been increased in the last five years.
NAC’s share of total tourist market has dropped to all-time low of 2.3 per cent last year. It slipped to the 14th spot among the 29 international carriers serving flying to Nepal.

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